Exhibit 10.3  EXECUTION COPY  COLLATERAL MANAGEMENT
AGREEMENT This Collateral
Management Agreement, dated as of August 8, 2007 (this Agreement), is
entered into by and between GRAMERCY REAL ESTATE CDO 2007-1, LTD., an exempted
company incorporated with limited liability under the laws of the Cayman
Islands (together with successors and assigns permitted hereunder, the Issuer), and GKK
MANAGER LLC, a limited liability company organized under the laws of the State
of Delaware (together with its successors and assigns, the Collateral Manager).  Capitalized terms used herein but not
otherwise defined herein shall have the respective meanings ascribed thereto in
the Indenture, dated as of August 8, 2007 (the Indenture), by and among the Issuer, Gramercy Real
Estate CDO 2007-1 LLC, as co-issuer (the Co-Issuer), Wells Fargo Bank, National
Association, as trustee (in such capacity, the Trustee), paying agent, calculation agent,
transfer agent, custodial securities intermediary, backup advancing agent and notes
registrar, and GKK Liquidity LLC, as advancing agent. WHEREAS, the Issuer
desires to engage the Collateral Manager to provide the services described
herein and the Collateral Manager desires to provide such services; NOW, THEREFORE, in
consideration of the mutual covenants and agreements set forth herein, the
parties hereto hereby agree as follows: 1.             Management Services.  The Collateral Manager is hereby appointed as
the Issuers exclusive agent to provide the Issuer with certain services in
relation to the Assets specified herein and in the Indenture.  Accordingly, the Collateral Manager accepts
such appointment and shall provide the Issuer with the following services (in
accordance with all applicable requirements of the Indenture, the CDO Servicing
Agreement and this Agreement, including, without limitation, the Collateral
Manager Servicing Standard, as applicable, and without regard to any conflicts
of interest): (a)           determining specific
Collateral Debt Securities to be purchased or Collateral Debt Securities to be
sold and the timing of such purchases and sales, in each case, as permitted by
the Indenture; (b)           determining specific
Eligible Investments to be purchased or sold and the timing of such purchases
and sales, in each case, as permitted by the Indenture; (c)           effecting or
directing the purchase of Collateral Debt Securities and Eligible Investments,
effecting or directing the sale of Collateral Debt Securities and Eligible
Investments, and directing the investment or reinvestment of proceeds therefrom,
in each case as permitted by the Indenture; (d)           negotiating with the
issuers of Collateral Debt Securities as to proposed modifications or waivers
of the documentation governing such Collateral Debt Securities as permitted
under the Indenture;


(e)           subject to the
applicable provisions of the Asset Servicing Agreement, taking action, or
advising the Trustee with respect to actions to be taken, with respect to the
Issuers exercise of any rights (including, without limitation, voting rights,
tender rights and rights arising in connection with the bankruptcy or
insolvency of an issuer or the consensual or non-judicial restructuring
of the debt or equity of an issuer) or remedies in connection with the
Collateral Debt Securities and Eligible Investments, as provided in the related
Underlying Instruments, including in connection with an Offer or a default, and
participating in the committees or other groups formed by creditors of an
issuer, or taking any other action with respect to Collateral Debt Securities
and Eligible Investments which the Collateral Manager determines in the
reasonable exercise of the Collateral Managers business judgment is in the
best interests of the Noteholders in accordance with, and as permitted by, the
terms of the Indenture, any servicing agreement and this Agreement; (f)            consulting with the
Rating Agencies at such times as may be reasonably requested by the Rating
Agencies and providing the Rating Agencies with any information reasonably
requested in connection with the Rating Agencies maintenance of their ratings
of the Notes and their assigning credit indicators to prospective Collateral
Debt Securities, if applicable; (g)           determining whether
specific Collateral Debt Securities are Credit Risk Securities, Defaulted Securities,
Written Down Securities or Spread Appreciated Securities and determining
whether such Collateral Debt Securities, and any other Collateral Debt
Securities that are permitted or required to be sold pursuant to the Indenture,
should be sold, and directing the Trustee to effect a disposition of any such
Collateral Debt Securities, subject to, and in accordance with the terms and
conditions of the Indenture; (h)           (i) monitoring the
Assets on an ongoing basis and (ii) providing or causing to be provided to the
Issuer and/or the other applicable parties specified in the Indenture all
reports, schedules and certificates which relate to the Assets and which the
Issuer is required to prepare and deliver under the Indenture, which are not
prepared and delivered by the Trustee, on behalf of the Issuer, under the
Indenture, in the form and containing all information required thereby
(including, in the case of the Monthly Reports and the Notes Valuation Reports,
providing the information to the Trustee as specified in Sections 10.9(c) and
10.9(e) of the Indenture in sufficient time for the Trustee to prepare the
Monthly Report and the Notes Valuation Report) and, if applicable, in
sufficient time for the Issuer to review such required reports and schedules
and to deliver them to the parties entitled thereto under the Indenture; (i)            managing the
Issuers Collateral Debt Securities and Eligible Investments in accordance with
the Indenture, including the limitations relating to the Eligibility Criteria,
the Coverage Tests, the Collateral Quality Tests, the Replenishment Criteria
and the other requirements of the Indenture and this Agreement, and, subject to
the Asset Servicing Agreement, taking any action that the Collateral Manager
deems appropriate and consistent with the Indenture, the Collateral Manager
Servicing Standard and the standard of care set forth herein with respect to
any portion of the Assets that does not constitute Collateral Debt Securities
or Eligible Investments as required or permitted by the Indenture;  2


(j)            monitoring all
Hedge Agreements and determining whether and when the Issuer should exercise
any rights available under any Hedge Agreement, and causing the Issuer to enter
into additional or replacement Hedge Agreements or terminating (in part or in
whole) existing Hedge Agreements, in each case, in accordance with the
Indenture and the terms of such Hedge Agreements; (k)           providing
notification promptly, in writing, to the Trustee and the Issuer upon receiving
actual notice that a Collateral Debt Security is subject to an Offer or has
become a Defaulted Security, a Written Down Security or a Credit Risk Security; (l)            providing
notification promptly, in writing, to the Trustee and the Issuer upon becoming
actually aware of a Default or an Event of Default under the Indenture; (m)          determining (subject
to the Indenture) whether, in light of the composition of Collateral Debt
Securities, general market conditions and other factors considered pertinent by
the Collateral Manager, investments of Replenishment Proceeds in additional
Collateral Debt Securities in the foreseeable future would, at any time during
the Replenishment Period, either be impractical or not beneficial to the Issuer
and the Holders of the Preferred Shares; (n)           if the Collateral
Manager elects to amortize the Notes pursuant to and in accordance with Section
9.7 of the Indenture, providing notification, in writing, to the Trustee, the
Issuer, the Co-Issuer, the Class A-2 Note Insurer and each Hedge Counterparty
of (A) such election and (B) the amount of such proceeds that will be used to
so amortize the Notes; (o)           taking reasonable
action on behalf of the Issuer to effect any Optional Redemption, any Tax
Redemption, any Auction Call Redemption or any Clean-up Call in accordance with
the Indenture; (p)           on the Stated
Maturity of the Notes, or in connection with any Optional Redemption, any Tax
Redemption, any Auction Call Redemption or any Clean-up Call, liquidating any
remaining Hedge Agreements in accordance with the terms thereof and the
Indenture; (q)           monitoring the
ratings of the Collateral Debt Securities and the Issuers compliance with the
covenants by the Issuer in the Indenture; (r)            assisting the
Issuer in (i) taking any action in order to effect and/or maintain the
listing of any of the Notes on the Irish Stock Exchange, (ii) obtaining
any waiver from the Irish Stock Exchange or (iii) providing other
information related to the Issuer that is reasonably available to the Collateral
Manager, in each case, when specifically requested by the Irish Stock Exchange; (s)           complying with such
other duties and responsibilities as may be specifically required of the
Collateral Manager by the Indenture or this Agreement; (t)            complying in all
material respects with the Investment Advisers Act of 1940, as amended (the Advisers Act), with
respect to the Issuer;  3


(u)           in order to render
the Securities eligible for resale pursuant to Rule 144A under the Securities
Act, while any of such Securities remain outstanding, making available, upon
request, to any Holder or prospective purchaser of such Securities, additional
information regarding the Issuer and the Assets if such information is
reasonably available to the Collateral Manager and constitutes Rule 144A
Information required to be furnished by the Issuer pursuant to Section 7.13 of
the Indenture, unless the Issuer furnishes information to the United States
Securities and Exchange Commission (the Commission) pursuant to Section 13 or Section
15(d) of the Exchange Act; (v)           upon reasonable
request, assisting the Trustee or the Issuer with respect to such actions to be
taken after the Closing Date, as is necessary to maintain the clearing and
transfer of the Notes through DTC and Euroclear; (w)          in accordance with
the Collateral Manager Servicing Standard, enforcing the rights of the Issuer
as holder of the Collateral Debt Securities, including, without limitation,
taking such action as is necessary to enforce the Issuers rights with respect
to remedies related to breaches of representations, warranties or covenants in
the Underlying Instruments for the benefit of the Issuer; (x)            determining (for
purposes of the Collateral Quality Tests) whether Underlying Mortgaged
Properties located in the State of California are located in the southern
region or the northern region of the State of California; (y)           designating Eligible
Investments for sale at auction in connection with an Auction Call Redemption;
and (z)            electing the applicable scenario to
use in connection with the Moodys Test Matrix, the S&P Test Matrix and the
Fitch Test Matrix. In furtherance of the
foregoing, the Issuer hereby appoints the Collateral Manager the Issuers true
and lawful agent and attorney-in-fact, with full power of substitution and full
authority in the Issuers name, place and stead and without any necessary
further approval of the Issuer, in connection with the performance of the
Collateral Managers duties provided for in this Agreement, including the
following powers:  (i) in accordance
with the terms and conditions of the Indenture and this Agreement, to buy,
sell, exchange, convert and otherwise trade Collateral Debt Securities and
Eligible Investments and (ii) to execute (under hand, under seal or as a
deed) and deliver all necessary and appropriate documents and instruments on
behalf of the Issuer to the extent necessary or appropriate to perform the
services referred to in (a) through (y) above of this Section 1 and under
the Indenture.  The foregoing power of
attorney is a continuing power, coupled with an interest, and shall remain in
full force and effect until revoked by the Issuer in writing by virtue of the
termination of this Agreement pursuant to Section 12 hereof or an
assignment of this Agreement pursuant to Section 17 hereof; provided
that any such revocation shall not affect any transaction initiated prior to
such revocation.  Nevertheless, if so
requested by the Collateral Manager, a purchaser of a Collateral Debt Security
or Eligible Investment or a Hedge Counterparty, the Issuer shall ratify and
confirm any such sale or other disposition by executing and delivering to the
Collateral Manager, such purchaser or such Hedge Counterparty  4


all proper bills
of sale, assignments, releases and other instruments as may be designated in
any such request. The Collateral Manager
does not hereby guarantee that sufficient funds will be available on each
Payment Date to satisfy any such payment obligations.  The Collateral Manager shall perform its
obligations hereunder and under the Indenture with reasonable care and in good
faith, using a degree of skill and attention no less than that which it
(a) exercises with respect to comparable assets that it manages for itself
and (b) exercises with respect to comparable assets that it manages for
others, and in a manner consistent with the practices and procedures then in
effect followed by reasonable and prudent institutional managers of national
standing relating to assets of the nature and character of the Assets, except
as expressly provided in this Agreement or in the Indenture.  In addition, the Collateral Manager shall use
commercially reasonable efforts to ensure that directions to the Trustee with
respect to the purchase of Eligible Investments are made by the Collateral
Manager only if, in the Collateral Managers commercially reasonable judgment
at the time of such direction, payment at settlement in respect of any such purchase
could be made without any breach or violation of, or default under, the terms
of the Indenture or this Agreement.  The
Collateral Manager shall comply with and perform all the duties and functions
that have been specifically delegated to the Collateral Manager under the
Indenture.  The Collateral Manager shall
be bound to follow any amendment, supplement or modification to the Indenture
of which it has received written notice at least ten (10) Business Days prior
to the execution and delivery thereof by the parties thereto; provided, however,
that, with respect to any amendment, supplement, modification or waiver to the
Indenture which may affect the Collateral Manager, the Collateral Manager shall
not be bound thereby (and the Issuer agrees that it shall not permit any such
amendment, supplement, modification or waiver to become effective) unless the
Collateral Manager has been given prior written notice thereof and gives its
written consent thereto (which consent shall not be unreasonably withheld) to the
Trustee and the Issuer prior to the effectiveness thereof. The Collateral Manager
shall take all actions reasonably requested by the Trustee to facilitate the
perfection of the Trustees security interest in the Assets pursuant to the
Indenture. Notwithstanding anything
contained herein to the contrary, (i) any cash advance the Collateral Manager
makes with respect to cure payments and actions taken in connection therewith
and (ii) any voting, consent, consultation or control rights exercised by the Collateral
Manager with respect to a Collateral Debt Security that is a B Note,
Participation or junior interest in a Mezzanine Loan, in each case, shall be
subject to the applicable provisions of the Asset Servicing Agreement. 2.             Delegation of Duties.  The Collateral Manager may delegate to third
parties (including its Affiliates), which it shall select with reasonable care,
and employ third parties to execute any or all of the duties assigned to the
Collateral Manager hereunder; provided, however, that (i) the
Collateral Manager shall not be relieved of any of its duties or obligations
hereunder as a result of such delegation to or employment of third parties,
(ii) the Collateral Manager shall be solely responsible for the fees and
expenses payable to any such third party, except as set forth in Section 6
hereof and (iii) such delegation does not constitute an assignment under
the Advisers Act.  5


3.             Purchase and
Sale Transactions; Brokerage. (a)           The Collateral
Manager shall seek to obtain the best overall terms for all orders placed with
respect to the Assets, considering all reasonable circumstances, including, if
applicable, the conditions or terms of early redemption of the Securities, it
being understood that the Collateral Manager has no obligation to obtain the
lowest prices available.  Subject to the
foregoing objective, the Collateral Manager may take into consideration all
factors the Collateral Manager reasonably determines to be relevant, including,
without limitation, timing, general relevant trends and research and other
brokerage services and support equipment and services related thereto furnished
to the Collateral Manager or its Affiliates by brokers and dealers in
compliance with Section 28(e) of the Exchange Act or, if Section 28(e) of
the Exchange Act is not applicable, in accordance with the provisions set forth
herein.  Such services may be used in
connection with the other advisory activities or investment operations of the
Collateral Manager and/or its Affiliates. 
In addition, the Collateral Manager may take into account available
prices, rates of brokerage commissions and size and difficulty of the order, in
addition to other relevant factors (such as, without limitation, execution
capabilities, reliability (based on total trading rather than individual
trading), integrity, financial condition in general, execution and operational
capabilities of competing brokers and/or dealers, and the value of the ongoing
relationship with such brokers and/or dealers), without having to demonstrate
that such factors are of a direct benefit to the Issuer in any specific
transaction.  The Issuer acknowledges and
agrees that (i) the determination by the Collateral Manager of any benefit to
the Issuer is subjective and represents the Collateral Managers evaluation at
the time that the Issuer will be benefited by relatively better purchase or
sales prices, lower brokerage commissions and beneficial timing of transactions
or a combination of any of these and/or other factors and (ii) the Collateral
Manager shall be fully protected with respect to any such determination to the
extent the Collateral Manager acts in good faith, and in accordance with the
Collateral Manager Servicing Standard and in accordance with the standard of
care set forth in Section 1 hereof, and without gross negligence, willful
misconduct or reckless disregard of the obligations of the Issuer hereunder or
under the terms of the Indenture. The Collateral Manager
may aggregate sales and purchase orders of securities placed with respect to
the Assets with similar orders being made simultaneously for other accounts
managed by the Collateral Manager or with accounts of the Affiliates of the
Collateral Manager if, in the Collateral Managers sole judgment, exercised in
good faith, such aggregation will not have an adverse effect on the
Issuer.  When any such aggregate sales or
purchase orders occur, the objective of the Collateral Manager (and any of its
Affiliates involved in such transactions) shall be to allocate the executions
among the accounts in a manner fair and equitable to all such accounts and
generally to seek to allocate securities available for investment to all such
accounts pro rata in proportion
to the optimum amount sought by the Collateral Manager for each respective
account.  In connection with the
foregoing, the objective of the Collateral Manager shall be to allocate
investment opportunities and the purchases or sales of instruments in a manner
believed by the Collateral Manager, in good faith, taking into account the
Collateral Managers Servicing Standard and in accordance with the standard of
care set forth in Section 1 hereof, to be fair and equitable. In connection with any
purchase of a portfolio of assets other than securities, the objective of the
Collateral Manager shall be to allocate such assets (and the aggregate purchase  6


price paid for
such assets) among the Collateral Managers clients (including the Issuer) in a
manner believed by the Collateral Manager to be fair and equitable.  The Issuer acknowledges and agrees that the
Collateral Manager shall be fully protected with respect to any such allocation
to the extent the Collateral Manager acts in good faith, taking into account
the Collateral Managers Servicing Standard and in accordance with the standard
of care set forth in Section 1 hereof, and without gross negligence, willful
misconduct or reckless disregard of the obligations of the Issuer hereunder or
under the terms of the Indenture. All purchases and sales
of Eligible Investments and Collateral Debt Securities by the Collateral
Manager on behalf of the Issuer shall be conducted in compliance with all
applicable laws (including, without limitation, Section 206(3) of the Advisers
Act) and the terms of the Indenture. 
After (and excluding) the Closing Date, the Collateral Manager shall
cause any purchase or sale of any Collateral Debt Security or Eligible
Investment to be conducted on an arms-length basis or, if applicable, in
compliance with Section 3(b) hereof.  The
parties hereto acknowledge and agree that all purchases (including, without
limitation, purchases from Affiliates of the Collateral Manager) of Eligible
Investments and Collateral Debt Securities by the Collateral Manager on behalf
of the Issuer on the Closing Date (including, without limitation, all such
purchases from Affiliates of the Collateral Manager) in a manner contemplated
by the final Offering Memorandum, dated August 6, 2007 (the Offering
Memorandum), related to the Classes of Notes offered thereby (or any
supplement thereto) are hereby approved. (b)           The Collateral
Manager, subject to and in accordance with the terms and conditions of the
Indenture, may effect direct trades between the Issuer and the Collateral
Manager or any of its Affiliates acting as principal or agent (any such
transaction, a Related Party Trade); provided, however,
that a Related Party Trade after (and excluding) the Closing Date, other than
Permitted Cash Purchases, sales of property or securities in accordance with
the Origination Agreement and sales of Assets pursuant to an auction in
connection with an Auction Call Redemption or in connection with a redemption
of the Notes pursuant to Article 9 of the Indenture, may be effected only (i)
upon disclosure to and with the prior consent of an advisory committee
containing at least one member independent from the Collateral Manager (whose
affirmative vote shall be required to grant such consent) acting as a surrogate
for, and in the best interest of, the holders of the Securities that has been
appointed from time to time as needed by the Issuer or by the Collateral
Manager following the resignation of any member (the Advisory Committee)
and based on the Advisory Committees determination that such transaction is on
terms substantially as favorable to the Issuer as would be the case if a such
transaction were effected with Persons not so affiliated with the Collateral
Manager or any of its Affiliates, (ii) subject to a requirement that the
purchase price in respect of any Collateral Debt Security acquired by the
Issuer from a Seller pursuant to such a direct trade may not exceed the
Principal Balance thereof, plus accrued and unpaid interest thereon (or, in the
case of a Preferred Equity Security, all accrued and unpaid dividends or other
distributions not attributable to the return of capital by its governing
documents) and (iii) if such purchase or sale, as the case may be, is in
accordance with the terms of the Indenture. 
The Advisory Committee, if any, shall be formed subject to the Advisory
Committee Guidelines attached hereto as Exhibit A (the Advisory
Committee Guidelines).  The Issuer
consents and agrees that, if any transaction relating to the Issuer, including any
transaction effected between the Issuer and the Collateral Manager or its
Affiliates, shall be subject to the disclosure and consent requirements of
Section 206(3) of the Advisers Act, such requirements shall be satisfied with
respect to the Issuer and all Holders of  7


the
Securities if disclosure shall be given to, and consent obtained from, the
Advisory Committee.  For avoidance of
doubt, it is hereby understood and agreed by the parties hereto that no
disclosure to, or consent of, the Advisory Committee shall be required with
respect to Permitted Cash Purchases, sales of property or securities in
accordance with the Origination Agreement and sales of Assets pursuant to an
auction in connection with an Auction Call Redemption or in connection with a
redemption of the Notes pursuant to Article 9 of the Indenture.  Notwithstanding the foregoing, to the extent
such provisions are determined not to satisfy the requirements of the Advisers
Act, the Collateral Manager shall take such actions in connection with any
Related Party Trade as will satisfy the requirements of Section 206(3) of the
Advisers Act. 4.             Representations and Warranties
of the Issuer.  The Issuer represents
and warrants to the Collateral Manager that: (a)           the Issuer
(i) has been duly incorporated and registered as an exempted company and
is validly existing under the laws of the Cayman Islands, (ii) has full
power and authority to own the Issuers assets and the securities proposed to
be owned by the Issuer and included among the Assets and to transact the
business for which the Issuer was incorporated and (iii) is duly qualified
under the laws of each jurisdiction where the Issuers ownership or lease of
property or the conduct of the Issuers business requires or the performance of
the Issuers obligations under this Agreement and the Indenture would require
such qualification, except for failures to be so qualified that would not in
the aggregate have a material adverse effect on the business, operations,
assets or financial condition of the Issuer or the ability of the Issuer to
perform its obligations under, or on the validity or enforceability of, this
Agreement and the Indenture; the Issuer has full power and authority to
execute, deliver and perform the Issuers obligations hereunder and thereunder;
this Agreement and the Indenture have been duly authorized, executed and
delivered by the Issuer and constitute legal, valid and binding agreements
enforceable against the Issuer in accordance with their terms except that the
enforceability thereof may be subject to (a) bankruptcy, insolvency,
reorganization, moratorium, receivership, conservatorship or other similar laws
now or hereafter in effect relating to creditors rights and (b) general principles
of equity (regardless of whether such enforcement is considered in a proceeding
in equity or at law); (b)           no consent,
approval, authorization or order of or declaration or filing with any
government, governmental instrumentality or court or other Person is required
for the performance by the Issuer of its duties hereunder or under the
Indenture, except those that may be required under state securities or blue
sky laws or the applicable laws of any jurisdiction outside of the United
States, and such as have been duly made or obtained; (c)           neither the
execution, delivery and performance of this Agreement or the Indenture nor the
performance by the Issuer of its duties hereunder or under the Indenture
(i) conflicts with or will violate or result in a default under the
Issuers Governing Documents or any material contract or agreement to which the
Issuer is a party or by which it or its assets may be bound, or any law,
decree, order, rule, or regulation applicable to the Issuer of any court or
regulatory, administrative or governmental agency, body or authority or
arbitrator having jurisdiction over the Issuer or its properties, or (other
than as contemplated or permitted by the Indenture) will result in a lien on
any of the property of the Issuer and (ii) would have a material  8


adverse
effect upon the ability of the Issuer to perform its duties under this
Agreement or the Indenture; (d)           the Issuer and its
Affiliates are not in violation of any federal, state or Cayman Islands laws or
regulations, and there is no charge, investigation, action, suit or proceeding
before or by any court or regulatory agency pending or, to the best knowledge
of the Issuer, threatened that, in any case, would have a material adverse
effect upon the ability of the Issuer to perform its duties under this
Agreement or the Indenture; (e)           the Issuer is not an
investment company under the Investment Company Act; and (f)            the assets of the
Issuer do not and will not at any time constitute the assets of any plan
subject to the fiduciary responsibility provisions of ERISA or of any plan
within the meaning of Section 4975(e)(1) of the Code. 5.             Representations and Warranties
of the Collateral Manager.  The
Collateral Manager represents and warrants to the Issuer that: (a)           the Collateral
Manager (i) has been duly organized, is validly existing and is in good
standing under the laws of the State of Delaware, (ii) has full power and
authority to own the Collateral Managers assets and to transact the business
in which it is currently engaged and (iii) is duly qualified and in good
standing under the laws of each jurisdiction where the Collateral Managers
ownership or lease of property or the conduct of the Collateral Managers business
requires, or the performance of this Agreement and the Indenture would require,
such qualification, except for failures to be so qualified that would not in
the aggregate have a material adverse effect on the business, operations,
assets or financial condition of the Collateral Manager or the ability of the
Collateral Manager to perform its obligations under, or on the validity or
enforceability of, this Agreement and the provisions of the Indenture
applicable to the Collateral Manager; the Collateral Manager has full power and
authority to execute, deliver and perform this Agreement and the Collateral
Managers obligations hereunder and the provisions of the Indenture applicable
to the Collateral Manager; this Agreement has been duly authorized, executed
and delivered by the Collateral Manager and constitutes a legal, valid and
binding agreement of the Collateral Manager, enforceable against it in
accordance with the terms hereof, except that the enforceability hereof may be
subject to (a) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors rights and
(b) general principles of equity (regardless of whether such enforcement
is considered in a proceeding in equity or at law); (b)           neither the Collateral
Manager nor any of its Affiliates is in violation of any federal or state
securities law or regulation promulgated thereunder that would have a material
adverse effect upon the ability of the Collateral Manager to perform its duties
under this Agreement or the Indenture, and there is no charge, investigation,
action, suit or proceeding before or by any court or regulatory agency pending
or, to the best knowledge of the Collateral Manager, threatened which could
reasonably be expected to have a material adverse effect upon the ability of
the Collateral Manager to perform its duties under this Agreement or the
Indenture;  9


(c)           neither the
execution and delivery of this Agreement nor the performance by the Collateral
Manager of its duties hereunder or under the Indenture conflicts with or will
violate or result in a breach or violation of any of the terms or provisions
of, or constitutes a default under:  (i)
the limited liability company agreement of the Collateral Manager, (ii) the
terms of any indenture, contract, operating agreement, lease, mortgage, deed of
trust, note agreement or other evidence of indebtedness or other agreement,
obligation, condition, covenant or instrument to which the Collateral Manager
is a party or by which the Collateral Manager is bound, (iii) any law, decree,
order, rule or regulation applicable to the Collateral Manager of any court or
regulatory, administrative or governmental agency, body or authority or
arbitrator having jurisdiction over the Collateral Manager or its properties,
and which would have, in the case of any of (i), (ii) or (iii) of this
subsection (c), either individually or in the aggregate, a material adverse
effect on the business, operations, assets or financial condition of the
Collateral Manager or the ability of the Collateral Manager to perform its
obligations under this Agreement or the Indenture; (d)           no consent,
approval, authorization or order of or declaration or filing with any
government, governmental instrumentality or court or other Person is required
for the performance by the Collateral Manager of its duties hereunder and under
the Indenture, except such as have been duly made or obtained; (e)           the Sections
entitled SummaryThe Collateral Manager and The Collateral Manager in the
Offering Memorandum, as of the date thereof (including as of the date of any
supplement thereto) and as of the Closing Date, do not contain any untrue
statement of a material fact and do not omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; and (f)            the Collateral
Manager is not required to register as an investment adviser under the Advisers
Act. 6.             Expenses.  Both parties hereto acknowledge and agree
that a portion of the gross proceeds received from the issuance and sale of the
Securities will be used to pay certain organizational and structuring fees and
expenses of the Co-Issuers, including the legal fees and expenses of counsel to
the Collateral Manager.  The Collateral
Manager shall pay all expenses and costs incurred by it in the course of
performing its obligations under this Agreement; provided, however,
that the Collateral Manager shall not be liable for, and (subject to the
Priority of Payments set forth in the Indenture and to the extent funds are
available therefor) the Issuer shall be responsible for the payment of,
reasonable expenses and costs (including, without limitation, reasonable travel
expenses) of (i) independent accountants, consultants and other advisers
retained by the Issuer or by the Collateral Manager on behalf of the Issuer in
connection with the services provided by the Collateral Manager hereunder, (ii)
legal advisers retained by the Issuer or by the Collateral Manager on behalf of
the Issuer in connection with the services provided by the Collateral Manager
hereunder and (iii) the Collateral Manager (A) to the extent of reasonable
expenses disbursed or allocated in valuing the Assets, disbursed or allocated
software and technology expenditures relating to the monitoring and
administration of the Assets and any other reasonable expenses incurred by the
Collateral Manager in connection with matters arising in the performance by the
Collateral Manager of its duties under this Agreement  10


and (B) for an allocable
share of the cost of certain credit databases used by the Collateral Manager in
providing services to the Issuer under this Agreement. 7.             Fees.  As compensation for the performance of its
obligations as Collateral Manager hereunder and under the Indenture, the
Collateral Manager shall be entitled to receive (i) a fee, payable
quarterly in arrears on each Payment Date in accordance with the Priority of
Payments, equal to (a) 0.05% per annum of the amount described in clause (i) of
the definition of Net Outstanding Portfolio Balance plus (b) 0.10% per annum of
the sum of the amounts described in clauses (ii) through (iv) of the definition
of Net Outstanding Portfolio Balance (the Senior Collateral Management Fee) and
(ii) an additional fee, payable quarterly in arrears on each Payment Date
in accordance with the Priority of Payments, equal to 0.15% per annum of the
sum of the amounts described in clauses (ii) through (iv) of the definition of
Net Outstanding Portfolio Balance (the Subordinate Collateral Management Fee and,
together with the Senior Collateral Management Fee, the Collateral Management Fee).  Each Collateral Management Fee shall be
calculated for each Interest Accrual Period assuming a 360-day year with twelve
(12) thirty-day months.  The Collateral
Management Fee shall be calculated based on the Net Outstanding Portfolio Balance
as of the first day of the applicable Interest Accrual Period.  If on any Payment Date there are insufficient
funds to pay such fees (and/or any other amounts due and payable to the
Collateral Manager) in full, in accordance with the Priority of Payments, the
amount not so paid shall be deferred and such amounts shall be payable on such
later Payment Date on which funds are available therefor as provided in the
Priority of Payments set forth in the Indenture.  Any accrued and unpaid Senior Collateral Management
Fee that is deferred due to the operation of the Priority of Payments shall
accrue interest at a per annumrate
equal to LIBOR in effect for the applicable Interest Accrual Period computed on
an actual 360-day basis.  Any accrued and
unpaid Subordinate Collateral Management Fee that is deferred due to the
operation of the Priority of Payments shall accrue interest at a per annum rate equal to LIBOR in effect
for the applicable Interest Accrual Period on an actual 360-day basis.  Notwithstanding any other provision hereof,
the aggregate amount of all accrued but unpaid Subordinate Collateral
Management Fee payable on the final Payment Date or, if earlier, following the
winding up of the Issuer shall be equal to the lesser of (a) the nominal amount
thereof and (b) the amount available for payment under the Priority of
Payments.  The Collateral Manager hereby
agrees not to cause the filing of a petition in bankruptcy against the Issuer
for the nonpayment to the Collateral Manager of any amounts due it hereunder
except in accordance with Section 18 hereof and, subject to the provisions
of Section 12, to continue to serve as Collateral Manager.  If this Agreement is terminated pursuant to
Section 12 hereof or otherwise, the accrued fees payable to the Collateral
Manager shall be prorated for any partial periods between the Payment Dates
during which this Agreement was in effect and shall be due and payable on the
first Payment Date following the date of such termination, together with all
expenses payable to the Collateral Manager in accordance with Section 6
hereof, and subject to the provisions of the Indenture and the Priority of
Payments. 8.             Non-Exclusivity.  Nothing herein shall prevent the Collateral
Manager or any of its Affiliates or any of their officers or directors from
engaging in any other businesses or providing investment management, advisory
or any other types of services to any Persons, including the Issuer, the
Trustee and the Noteholders, to the fullest extent permitted by applicable law;
provided, however, that the Collateral Manager may not take any
of the foregoing actions which the Collateral Manager knows or reasonably
should know would require  11


the Issuer or the pool of
Assets to register as an investment company under the Investment Company Act. 9.             Conflicts of Interest. (a)           After (but
excluding) the Closing Date and the sales by Affiliates of the Collateral
Manager of Collateral Debt Securities to the Issuer on the Closing Date (and
except in the case of Permitted Cash Purchases, sales of property or securities
in accordance with the Origination Agreement and sales of Assets pursuant to an
auction in connection with an Auction Call Redemption or in connection with a
redemption of the Notes pursuant to Article 9 of the Indenture), the Collateral
Manager shall not cause the Issuer to enter into any transaction with the
Collateral Manager or any of its Affiliates as principal, unless the applicable
terms and conditions set forth in Section 1 and Section 3(b) are complied with. (b)           The Collateral
Manager shall perform its obligations hereunder in accordance with the
requirements of the Advisers Act and the Indenture.  The Issuer acknowledges that (i) the
Collateral Manager and/or its Affiliates will acquire on the Closing Date 100%
of the Class J Notes, the Class K Notes, the Class L Notes, the Class M Notes,
the Class N Notes, the Class P Notes and the Preferred Shares, (ii) Affiliates
of the Collateral Manager will sell Collateral Debt Securities to the Issuer on
or prior to the Closing Date and (iii) the Collateral Manager, its
Affiliates and funds or accounts for which the Collateral Manager or its
Affiliates acts as investment adviser may at times own Notes of one or more
additional Classes.  After the Closing
Date, the Collateral Manager agrees to provide the Trustee with written notice
upon the acquisition or transfer (after, but excluding, the Closing Date) of
any Collateral Manager Securities. (c)           Nothing herein shall prevent the
Collateral Manager or any of its Affiliates or officers and directors of the
Collateral Manager from engaging in other businesses (including financing,
purchasing, owning, holding, originating or disposing of any assets or
investments), or from rendering services of any kind to the Issuer and its Affiliates,
the Trustee, the Holders or any other Person or entity, whether or not any of
the foregoing may be competitive with the business of the Issuer or the
Co-Issuer so long as the Collateral Manager complies with the standard of care
set forth in Section 1 hereof.  Without
prejudice to the generality of the foregoing, directors, officers, members,
partners, employees and agents of the Collateral Manager, Affiliates of the
Collateral Manager, and the Collateral Manager may so long as the Collateral Manager
complies with the standard of care set forth in Section 1 hereof, subject to
the terms and conditions of the Indenture, among other things: (i)       serve as directors (whether supervisory
or managing), officers, employees, partners, members, managers, agents,
nominees or signatories for the Issuer or any Affiliate thereof, or for any
obligor in respect of any of the Collateral Debt Securities or Eligible
Investments, or any of their respective Affiliates, except to the extent
prohibited by their respective Underlying Instruments, as from time to time
amended; provided that (x) in the reasonable judgment of the
Collateral Manager, such activity will not have a material adverse effect on
the ability of the Issuer or the Trustee to enforce its respective rights with
respect to any Assets and (y) nothing in this paragraph shall be deemed to
limit the duties of the Collateral Manager set forth in Section 1 hereof;  12


(ii)      perform, and receive fees for the performance
of, services of whatever nature rendered to an obligor in respect of any of the
Collateral Debt Securities or Eligible Investments, including acting as master
servicer, sub-servicer or special servicer with respect to any CMBS Securities
or with respect to any commercial mortgage loan constituting or underlying any
Collateral Debt Security; provided that, in the reasonable judgment of
the Collateral Manager, such activity will not have a material adverse effect
on the ability of the Issuer or the Trustee to enforce its respective rights
with respect to any of the Assets; provided, further, with
respect to such services, the Collateral Manager is not acting as an agent for
the Issuer; (iii)     be retained to provide services unrelated
to this Agreement to the Issuer or its Affiliates and be paid therefor; (iv)    be a secured or unsecured creditor of, or
hold an equity interest in, the Issuer, its Affiliates or any obligor of any
Collateral Debt Security or Eligible Investment; provided, however,
that the Collateral Manager may not be such a creditor or hold any of such
interests if, in the opinion of counsel to the Issuer, the existence of such
interest would require registration of the Issuer or the Assts as an
investment company under the Investment Company Act or violate any provisions
of federal or applicable state law or any law, rule or regulation of any
governmental body or agency having jurisdiction over the Issuer; (v)     own equity in or own or make loans to any
issuer of debt securities issued by a real estate investment trust (as defined
in Section 856 of the Code or any successor provision) so long as doing so
would not cause the Collateral Manager to be in violation of its obligations
under this Agreement or the Indenture; (vi)    make, hold or sell an investment in an
issuers securities that may be pari passu,
senior or junior in ranking to a Collateral Debt Security; (vii)   except as otherwise provided in this
Section 9, sell any Collateral Debt Security or Eligible Investment to, or
purchase any Collateral Debt Security from, the Issuer while acting in the
capacity of principal or agent; and (viii)  subject to its obligations in Section 1
hereof to protect the Holders, serve as a member of any creditors board with
respect to any Defaulted Security, Eligible Investment or with respect to any
commercial mortgage loan underlying or constituting any Collateral Debt
Security or the respective borrower for any such commercial mortgage loan. It is understood that the
Collateral Manager and any of its Affiliates may engage in any other business,
whether or not any of the foregoing may be competitive with the business of the
Issuer or the Co-Issuer (including financing, purchasing, owning, holding,
originating or disposing of any assets or investments), and furnish investment
management and advisory services to others, including Persons that may have
investment policies similar to those followed by the Collateral Manager with
respect to the Assets and that may own instruments of the same class, or of the
same type, as the Collateral Debt Securities or other instruments of the
issuers of  13


Collateral Debt
Securities and may manage portfolios similar to the Assets.  The Collateral Manager and its Affiliates
shall be free, in their sole discretion, to make recommendations to others, or
effect transactions on behalf of themselves or for others, which may be the
same as or different from those the Collateral Manager causes the Issuer to
effect with respect to the Assets. The Collateral Manager
and its Affiliates may, and may cause or advise their respective clients to,
invest in assets, investments or instruments that would be appropriate for the
Issuer or the Co-Issuer or as security for the Notes and shall have no duty or
obligation to offer any such asset, investment or instrument to the Issuer or
the Co-Issuer.  Such investments may be
different from those made to or on behalf of the Issuer.  The Collateral Manager, its Affiliates and
their respective clients may have ongoing relationships with Persons whose
instruments are pledged to secure the Notes and may own instruments issued by,
or loans to, issuers of the Collateral Debt Securities or to any borrower or
Affiliate of any borrower on any commercial mortgage loans underlying or
constituting the Collateral Debt Securities or the Eligible Investments.  The Collateral Manager and its Affiliates may
cause or advise their respective clients to invest in instruments that are senior
to, or have interests different from or adverse to, the instruments that are
pledged to secure the Notes. Nothing contained in this
Agreement shall prevent the Collateral Manager or any of its Affiliates from
themselves buying or selling, or from recommending to or directing any other
account to buy or sell, at any time, securities of the same kind or class, or
securities of a different kind or class of the same issuer, as those directed
by the Collateral Manager to be purchased or sold hereunder.  It is understood that, to the extent permitted
by applicable law, the Collateral Manager, its Affiliates, and any member,
manager, officer, director, stockholder or employee of the Collateral Manager
or any such Affiliate or any member of their families or a Person advised by
the Collateral Manager may have an interest in a particular transaction or in
securities of the same kind or class, or securities of a different kind or
class of the same issuer, as those purchased or sold by the Collateral Manager
hereunder.  Subject to applicable law,
the requirements of the Indenture and this Agreement, when the Collateral
Manager is considering purchases or sales for the Issuer and one or more of
such other accounts at the same time, the Collateral Manager shall allocate
available investments or opportunities for sales in its discretion and make
investment recommendations and decisions that may be the same as or different
from those made with respect to the Issuers investments, in accordance with
applicable law and the Collateral Manager Servicing Standard, to the extent
applicable. Subject to the Indenture
and the provisions of this Agreement, the Collateral Manager shall not be
obligated to pursue any specific investment strategy or opportunity that may
arise with respect to the Assets. The Issuer hereby acknowledges
and consents to the various potential and actual conflicts of interests that
may exist with respect to the Collateral Manager as described above; provided,
however, that nothing contained in this Section 9 shall be
construed as altering the duties of the Collateral Manager set forth in this
Agreement or in the Indenture. 10.           Records; Requests for Information;
Confidentiality.  The Collateral
Manager shall maintain appropriate books of account and records relating to
services performed hereunder, and such books of account and records shall be
accessible for inspection by an  14


authorized representative of
the Issuer, the Trustee and the Independent accountants appointed by the Issuer
pursuant to the Indenture at a mutually agreed-upon time during normal business
hours and upon reasonable prior notice; provided that the Collateral
Manager shall not be obligated to provide access to any non-public information
if the Collateral Manager in good faith determines that the disclosure of such
information would violate any applicable law, regulation or contractual
arrangement.  The Collateral Manager
shall promptly forward to the Trustee any information in its possession or
reasonably available to it concerning any Collateral Debt Security, Eligible
Investment or Hedge Agreement that the Trustee reasonably may request as
necessary to enable the Trustee to calculate the Weighted Average Coupon and/or
the Weighted Average Spread (and, to the extent reasonably requested by the
Trustee, shall cooperate with the Trustee in connection with any the making of
any such calculations).  The Collateral
Manager shall follow its customary procedures to keep confidential all
information obtained in connection with the services rendered hereunder and
shall not disclose any such information except (i) with the prior written
consent of the Issuer (which consent shall not be unreasonably withheld),
(ii) such information as the Rating Agencies shall reasonably request in connection
with their rating or evaluation of the Notes and/or the Collateral Manager, as
applicable, (iii) as required by law, regulation, court order or the
rules, regulations, or request of any regulatory or self-regulating
organization, body or official (including any securities exchange on which the
Notes may be listed from time to time) having jurisdiction over the Collateral
Manager or as otherwise required by law or judicial process, (iv) such
information as shall have been publicly disclosed other than in violation of
this Agreement, (v) to its members, officers, directors, and employees,
and to its attorneys, accountants and other professional advisers in
conjunction with the transactions described herein, (vi) such information
as may be necessary or desirable in order for the Collateral Manager to
prepare, publish and distribute to any Person any information relating to the
investment performance of the Assets, (vii) in connection with the
enforcement of the Collateral Managers rights hereunder or in any dispute or
proceeding related hereto, (viii) to the Trustee, (ix) to the extent
required pursuant to any Hedge Agreement of the Issuer and (x) to Holders
and potential purchasers of any of the Securities. Subject to compliance
with the requirements of any law, rule or regulation applicable to the
Collateral Manager, nothing contained herein shall prevent the Collateral
Manager from discussing its activities hereunder in a general way in the normal
course of its business, including, without limitation, general discussions with
other Persons regarding its ability to act as a collateral manager and its past
performance in such capacity.  In
addition, subject to compliance with the requirements of any law, rule or
regulation applicable to the Collateral Manager, with respect to information
that the Collateral Manager obtains or develops regarding the Collateral Debt
Securities or Eligible Investments (including, without limitation, information
regarding ratings, yield, creditworthiness, financial condition and prospects
of any issuer thereof) in connection with the performance of its services
hereunder, nothing in this Section 10 shall prevent the Collateral Manager or
its Affiliates, in the conduct of their respective businesses, from using such
information or disclosing such information to others so long as such other use
does not, in its reasonable judgment, disadvantage the Issuer.  Notwithstanding anything to the contrary
contained in this Agreement, all Persons may disclose to any and all Persons,
without limitation of any kind, the U.S. federal, state and local tax treatment
of the Securities and the Co-Issuers, any fact that may be relevant to
understanding the U.S. federal, state and local tax treatment of the Securities
and the Issuers, and all materials of  15


any kind
(including opinions or other tax analyses) relating to such U.S. federal, state
and local tax treatment and that may be relevant to understanding such tax
treatment. 11.           Term.  This Agreement shall become effective on the
Closing Date and shall continue in full force and effect until the first to
occur of the following:  (a) the
payment in full of the Notes and the termination of the Indenture in accordance
with its terms, (b) the liquidation of the Assets and the final
distribution of the proceeds of such liquidation to the Holders and the Issuer
or (c) the termination of this Agreement pursuant to Section 12
hereof. 12.           Termination.  (a)  The Collateral Manager may be
removed upon at least thirty (30) days (or upon an occurrence of any act or
indictment described in clause (iv) of the definition of cause set forth in
Section 12(b) below, ten (10) days) prior written notice if (A) Holders of at
least 75% by Aggregate Outstanding Amount of each Class of Notes (voting as a
separate Class) and (B) Holders of at least 75% of the Preferred Shares in
issue which have not been redeemed give written notice to the Collateral
Manager, the Issuer, each Hedge Counterparty and the Trustee of such removal
(including in any such calculation any Collateral Manager Securities); provided
that if the Collateral Manager is removed pursuant to this clause (a), any
successor Collateral Manager will not be permitted to be a Holder of or an
Affiliate of any Holder of Securities. 
Notice of any such removal shall be delivered by the Trustee, on behalf
of the Issuer, to the Holders of each Class of Notes, the Holders of the
Preferred Shares, each Rating Agency and each Hedge Counterparty. (b)           This Agreement may
be terminated, and the Collateral Manager may be removed, by the Issuer or the
Trustee for cause, upon thirty (30) days (or upon an occurrence of any act or
indictment described in clause (iv) of the definition of cause set forth in
this Section 12(b) below, ten (10) days) prior written notice by the Issuer, at
the direction of (A) so long as the Class A-1 Notes and/or the Class A-2 Notes
are the Controlling Class, the Holders of at least a majority of the
outstanding principal amount of the Controlling Class and (B) at any other time
(i) the Holders of at least a majority by Aggregate Outstanding Amount of each
Class of Notes (excluding any Collateral Manager Securities), each voting as a
separate Class and (ii) the Holders of at least a Majority of the Preferred Shares
(excluding any Collateral Manager Securities); provided, however,
upon the occurrence of an event described in clause (iii) of this Section
12(b), termination of the Collateral Manager will be automatic and without
advance notice required from the Issuer, the Trustee or any other Person.  Notice of any such removal for cause shall be
delivered by the Trustee, on behalf of the Issuer, to each Rating Agency, each
Hedge Counterparty and the Holders of the Notes and the Preferred Shares.  In no event will the Trustee be required to
determine whether or not cause exists for the removal of the Collateral
Manager.  As used in this Section 12,
cause means any of the following events: (i)       the Collateral Manager (A) willfully
breaches, or takes any action that it knows violates, any provision of this
Agreement or any term of the Indenture applicable to the Collateral Manager
(not including a willful breach or knowing violation that results from a good
faith dispute regarding alternative courses of action or interpretation of
instructions), which breach or action has (or could reasonably be expected to
have) a material adverse effect on the Noteholders and (B) fails to cure such
breach within thirty (30) days after the first to occur of (1) notice of
such failure is given to the Collateral  16


Manager or (2) the
Collateral Manager having actual knowledge of such breach or violation; (ii)      the Collateral Manager breaches in any
material respect any provision of this Agreement or any material terms of the
Indenture applicable to the Collateral Manager and fails to cure such breach
within ninety (90) days after the first to occur of (A) notice of such
failure is given to the Collateral Manager or (B) the Collateral Manager
having actual knowledge of such breach; (iii)     the Collateral Manager (A) ceases to
be able to, or admits in writing the Collateral Managers inability to, pay the
Collateral Managers debts when and as they become due, (B) files, or
consents by answer or otherwise to the filing against the Collateral Manager
of, a petition for relief or reorganization or arrangement or any other
petition in bankruptcy, for liquidation or takes advantage of any bankruptcy,
insolvency, reorganization, moratorium or other similar law of any
jurisdiction, (C) makes an assignment for the benefit of the Collateral
Managers creditors, (D) consents to the appointment of a custodian,
receiver, trustee or other officer with similar powers with respect to the
Collateral Manager or with respect to any substantial part of the Collateral
Managers property or (E) is adjudicated as insolvent or to be liquidated; (iv)    the occurrence of an act by the Collateral
Manager or any of its Affiliates that constitutes fraud or criminal activity in
the performance of its obligations under this Agreement or the indictment of
the Collateral Manager or any of its respective officers or directors for a
criminal offense involving an investment or investment-related business, fraud,
false statements or omissions, wrongful taking of property, bribery, forgery,
counterfeiting or extortion; (v)     the failure of any representation,
warranty, certificate or statement of the Collateral Manager in or pursuant to
this Agreement or the Indenture to be correct in any material respect and
(x) such failure has (or could reasonably be expected to have) a material
adverse effect on the Noteholders, the Issuer or the Co-Issuer and (y) if
such failure can be cured, no correction is made for forty-five (45) days after
the Collateral Manager becomes aware of such failure or receives notice thereof
in writing from the Trustee; (vi)    the occurrence and continuation of any of
the Events of Default described in Sections 5.1(a) or 5.1(b) of the
Indenture; (vii)   so long as the Class A-1 Notes and/or the
Class A-2 Notes are the Controlling Class, the Class A/B Par Value Ratio is
less than 92.00% on any Measurement Date; or (viii)  the Collateral Manager consolidates or
amalgamates with, or merges with or into, or transfers all or substantially all
its assets to, another Person and either (A) at the time of such
consolidation, amalgamation, merger or transfer, the resulting, surviving or
transferee Person fails to or cannot assume all the obligations of the
Collateral Manager under this Agreement or (B) the resulting, surviving or
transferee Person lacks  17


the legal capacity to
perform the obligations of the Collateral Manager hereunder and under the
Indenture. The Collateral Manager
shall notify the Trustee, the Rating Agencies and the Issuer in writing
promptly upon becoming aware of any event that constitutes cause under this
Section 12(b).  In no event shall
the Trustee be obligated to determine if cause exists. (c)           The Collateral Manager
may resign, upon thirty (30) days prior written notice to the Issuer, the
Co-Issuer, the Trustee, each Rating Agency and each Hedge Counterparty; provided,
however, that (i) no such termination or resignation shall be
effective until the date as of which a successor collateral manager shall have
agreed in writing to assume all of the Collateral Managers duties and
obligations pursuant to this Agreement and (ii) the Issuer shall use its
best efforts to appoint a successor collateral manager to assume such duties
and obligations.  Notwithstanding the
notice required above, the Collateral Manager shall have the right to resign
without prior notice if, due to a change in any applicable law or regulation or
interpretation thereof, the performance by the Collateral Manager of its duties
under the Collateral Management Agreement would (i) adversely affect (A)
Gramercy Capital Corp.s status as a REIT, (B) Gramercy Investment Trust IIs
status as a REIT, (C) SL Green Realty Corp.s status as a REIT or (D) the Issuers
status as a qualified REIT subsidiary (within the meaning of Section 856(i)(2)
of the Code) or (ii) constitute a violation of any applicable law or
regulation. (d)           No removal,
termination or resignation of the Collateral Manager or termination of this
Agreement shall be effective unless (x) a successor collateral manager (a
Replacement Manager)
has been appointed by the Issuer and has agreed in writing to assume all of the
Collateral Managers duties and obligations pursuant to this Agreement and (y) written
notification shall have been provided in accordance with Sections 12(a), (b) or
(c), as applicable.  The appointment of
any Replacement Manager shall be subject to satisfaction of the Rating Agency
Condition and each such Replacement Manager (i) shall have demonstrated an
ability to professionally and competently perform duties similar to those
imposed upon the Collateral Manager, (ii) is legally qualified and has the
capacity to act as collateral manager, (iii) by its appointment will not
cause the Issuer, the Co-Issuer or the pool of Assets to, or result in the
Issuer, the Co-Issuer or the pool of Assets becoming, an investment company
under the Investment Company Act, (iv) has accepted its appointment in
writing and (v) by its appointment will not cause the Issuer, the
Co-Issuer or the pool of Assets to become subject to income or withholding tax
that would not have been imposed but for such appointment. (e)           Upon any resignation
or removal of the Collateral Manager while any of the Notes are Outstanding,
(A) so long as the Class A-1 Notes and/or the Class A-2 Notes are the
Controlling Class, the Holders of at least a majority of the outstanding
principal amount of the Controlling Class and (B) at any other time, the
Holders of at least a Majority of the Preferred Shares shall have the right to
instruct the Issuer to appoint an institution identified by such Holders as
Replacement Manager; provided that (i) the Issuer provides to the
Noteholders notice of such appointment and a majority by Aggregate Outstanding
Amount of each Class of Notes (excluding any Collateral Manager Securities),
each voting as a separate Class, does not object to such appointment within
thirty (30) days, (ii) the Rating Agency Condition has been satisfied with
respect to such appointment and (iii) the requirements set forth in Section
12(d)(i) through  18


(v)
above have been satisfied.  If at least a
majority of the Holders of the outstanding principal or notional amount of the
Controlling Class or the Preferred Shares, as the case may be, identify two (2)
institutions for appointment as described in Section 12(d)(i) or Section
12(d)(ii) above and both are objected to as described in clause (i) above, a
majority of the outstanding principal amount or notional amount, as the case
may be, of such Holders shall have the right to appoint any institution not
previously identified by such holders as Replacement Manager (subject to
compliance with the conditions described in Section 12(d)(i) and Section
12(d)(ii) above). (f)            In the event that
the Collateral Manager resigns pursuant to Section 12(c) or is terminated
pursuant to Sections 12(a) or (b) hereof and the Issuer has not appointed
a successor prior to the day following the termination (or resignation) date
specified in such notice, the Collateral Manager will be entitled to propose a
successor and will so appoint such proposed entity as successor thirty (30)
days thereafter, unless the Rating Agency Condition with respect to such
successor has not been satisfied or a majority of any Class of Notes (excluding
any Collateral Manager Securities), each voting as a separate Class, objects to
such appointment within such thirty (30) day period, in which case the
Controlling Class will be entitled to propose a successor and will appoint such
proposed entity as successor thirty (30) days thereafter unless a majority by
Aggregate Outstanding Amount of any other Class of Notes (excluding any
Collateral Manager Securities), each voting as a separate Class, objects to
such appointment within such thirty (30) day period, in each case subject to
the requirements set forth in Section 12(d) above.  In the event a proposed successor Collateral
Manager is not appointed pursuant to the foregoing procedures, the resigning or
removed Collateral Manager may petition any court of competent jurisdiction for
the appointment of a successor collateral manager, which appointment will not
require the consent of, or be subject to the disapproval of, the Issuer, any
Noteholder or any Holder of the Preferred Shares. Notwithstanding any
provision contained in this Agreement, the Indenture or otherwise, so long as
the Collateral Manager continues to perform its obligations hereunder, the
Collateral Management Fee shall continue to accrue for the benefit of the
Collateral Manager until termination of this Agreement under this
Section 12 shall become effective as set forth herein.  In addition, the Collateral Manager shall, subject
to Section 6, be entitled to reimbursement of out-of-pocket expenses
incurred in cooperating with the Replacement Manager, including in connection
with the delivery of any documents or property. 
In the event that the Collateral Manager is removed or resigns and a
Replacement Manager is appointed, such former Collateral Manager nonetheless
shall be entitled to receive payment of all unpaid Collateral Management Fees,
including the Senior Collateral Management Fee and the Subordinated Collateral
Management Fee, accrued through the effective date of the removal or
resignation, to the extent that funds are available for that purpose in
accordance with the Priority of Payments, and such payments shall rank in the
Priority of Payments pari passu
with the Collateral Management Fees due to the Replacement Manager.  In addition, following the removal or
resignation of the Collateral Manager hereunder, the removed or resigning
Collateral Manager shall be granted access to the books of account and records
of the Issuer and the Trustee to the extent such removed or resigning
Collateral Manager deems necessary to confirm the proper payment of any amounts
owing to such removed or resigning Collateral Manager hereunder.  19


(g)           Upon the effective
date of termination of this Agreement, the Collateral Manager shall as soon as
practicable: (i)       deliver to the Issuer (or as the Issuer
may reasonably request) all property and documents of the Trustee or the Issuer
or otherwise relating to the Assets then in the custody of the Collateral
Manager (although the Collateral Manager may keep copies of such documents for
its records); and (ii)      deliver to the Trustee an accounting with
respect to the books and records delivered to the Issuer or the Replacement
Manager appointed pursuant to this Section 12 hereof. The Collateral Manager
shall reasonably assist and cooperate with the Trustee and the Issuer (as
reasonably requested by the Trustee or the Issuer) in the assumption of the
Collateral Managers duties by any Replacement Manager as provided for in this
Agreement, as applicable. 
Notwithstanding such termination, the Collateral Manager shall remain
liable to the extent set forth herein (but subject to Section 13 hereof)
for the Collateral Managers acts or omissions hereunder arising prior to its
termination as Collateral Manager hereunder and for any expenses, losses,
damages, liabilities, demands, charges and claims (including reasonable
attorneys fees) in respect of or arising out of a breach of the
representations and warranties made by it in Section 5 hereof or from any
failure of the Collateral Manager to comply with the provisions of this
Section 12(g). (h)           The Collateral
Manager agrees that, notwithstanding any termination, the Collateral Manager
shall reasonably cooperate in any Proceeding arising in connection with this
Agreement, the Indenture or any of the Assets (excluding any such Proceeding in
which claims are asserted against the Collateral Manager or any Affiliate of
the Collateral Manager) so long as the Collateral Manager shall have been
offered (in its judgment) reasonable security, indemnity or other provision
against the cost, expenses and liabilities that might be incurred in connection
therewith, but, in any event, shall not be required to make any admission or to
take any action against the Collateral Managers own interests or the interests
of other funds and accounts advised by the Collateral Manager. (i)            If this Agreement
is terminated pursuant to Section 12(a), (b) or (c) hereof, such termination shall
be without any further liability or obligation of the Issuer or the Collateral
Manager to the other, except as provided in Sections 6, 7, 12 and 13 and the
last sentence of Section 10 hereof. (j)            Upon expiration of
the applicable notice period with respect to termination specified in
Section 12(e) hereof, all authority and power of the Collateral Manager
under this Agreement and the Indenture, whether with respect to the Assets or
otherwise, shall automatically and without further action by any person or
entity pass to and be vested in the Replacement Manager. 13.           Liability of Collateral Manager.  (a)  The Collateral Manager assumes
no responsibility under this Agreement other than to render the services called
for from the Collateral Manager hereunder and under the Indenture in the manner
prescribed herein and  20


therein.  The Collateral Manager and its Affiliates,
and each of their respective partners, shareholders, members, managers,
officers, directors, employees, agents, accountants and attorneys shall have no
liability to the Noteholders, the Holders of the Preferred Shares, the Trustee,
the Issuer, the Co-Issuer, any Hedge Counterparty, the Initial Purchaser, or
any of their respective Affiliates, partners, shareholders, officers,
directors, employees, agents, accountants and attorneys, or any other Person,
for any error of judgment, mistake of law, or for any claim, loss, liability,
damage, settlement, costs, or other expenses (including reasonable attorneys
fees and court costs) of any nature whatsoever (collectively, Liabilities) that
arise out of or in connection with any act or omissions of the Collateral
Manager in the performance of its duties under this Agreement or the Indenture
or for any decrease in the value of the Collateral Debt Securities or Eligible
Investments, except (i) by reason of acts or omissions constituting bad faith,
willful misconduct or gross negligence in the performance of, or reckless
disregard of, the duties of the Collateral Manager hereunder and under the
terms of the Indenture and (ii) with respect to the information concerning the
Collateral Manager under the headings SummaryThe Collateral Manager and The
Collateral Manager in the Offering Memorandum containing any untrue statement
of material fact or omitting to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading.  The Issuer agrees
that the Collateral Manager shall not be liable for any consequential, special,
exemplary or punitive damages hereunder. 
The acts, failure to act or breaches described in this clause (a) are
collectively referred to for purposes of this Section 13 as Collateral
Manager Breaches. (b)           The Collateral
Manager shall indemnify, defend and hold harmless the Issuer and each of its
partners, shareholders, members, managers, officers, directors, employees,
agents, accountants and attorneys (each, an Issuer Indemnified Party) from and against any claims
that may be made against an Issuer Indemnified Party by third parties and any
damages, losses, claims, liabilities, costs or expenses (including all
reasonable legal and other expenses) which are incurred as a direct consequence
of the Collateral Manager Breaches, except for liability to which such Issuer
Indemnified Party would be subject by reason of willful misconduct, bad faith,
gross negligence in the performance of, or reckless disregard of the
obligations of the Issuer hereunder and under the terms of the Indenture. (c)           The Issuer shall
reimburse, indemnify and hold harmless the Collateral Manager, its members,
managers, directors, officers, stockholders, partners, agents and employees and
any Affiliate of the Collateral Manager and its directors, officers,
stockholders, partners, members, agents, employees, accountants and attorneys
(the Collateral Manager and such other persons collectively, the Collateral Manager Indemnified Parties)
from any and all Liabilities, as are incurred in investigating, preparing,
pursuing or defending any claim, action, proceeding or investigation (whether
or not such Collateral Manager Indemnified Party is a party) caused by, or
arising out of or in connection with this Agreement, the Indenture and the
transactions contemplated hereby and thereby, including the issuance of the
Notes, or any acts or omissions of any Collateral Manager Indemnified Parties
except those that are the result of Collateral Manager Breaches.  Any amounts payable by the Issuer under this
Section 13(c) shall be payable only subject to the Priority of Payments
set forth in the Indenture and to the extent Assets are available therefor.  21


(d)           With respect to any
claim made or threatened against an Issuer Indemnified Party or a Collateral
Manager Indemnified Party (each an Indemnified Party), or compulsory process or
request or other notice of any loss, claim, damage or liability served upon an
Indemnified Party, for which such Indemnified Party is or may be entitled to
indemnification under this Section 13, such Indemnified Party shall (or,
with respect to Indemnified Parties that are directors, managers, officers,
stockholders, members, managers, agents or employees of the Issuer or the
Collateral Manager, the Issuer or the Collateral Manager, as the case may be,
shall cause such Indemnified Party to): (i)       give written notice to the indemnifying
party of such claim within ten (10) Business Days after such Indemnified
Partys receipt of actual notice that such claim is made or threatened, which
notice to the indemnifying party shall specify in reasonable detail the nature
of the claim and the amount (or an estimate of the amount) of the claim; provided,
however, that the failure of any Indemnified Party to provide such
notice to the indemnifying party shall not relieve the indemnifying party of
its obligations under this Section 13 unless the rights or defenses
available to the Indemnified Party are materially prejudiced or otherwise
forfeited by reason of such failure; (ii)      at the indemnifying partys expense,
provide the indemnifying party such information and cooperation with respect to
such claim as the indemnifying party may reasonably require, including making
appropriate personnel available to the indemnifying party at such reasonable
times as the indemnifying party may request; (iii)     at the indemnifying partys expense,
cooperate and take all such steps as the indemnifying party may reasonably
request to preserve and protect any defense to such claim; (iv)    in the event suit is brought with respect to
such claim, upon reasonable prior notice, afford to the indemnifying party the
right, which the indemnifying party may exercise in its sole discretion and at
its expense, to participate in the investigation, defense and settlement of
such claim; (v)     neither incur any material expense to
defend against nor release or settle any such claim or make any admission with
respect thereto (other than routine or incontestable admissions or factual
admissions the failure to make of which would expose such Indemnified Party to
unindemnified liability) nor permit a default or consent to the entry of any
judgment in respect thereof, in each case without the prior written consent of
the indemnifying party; and (vi)    upon reasonable prior notice, afford to the
indemnifying party the right, in such partys sole discretion and at such
partys sole expense, to assume the defense of such claim, including the right
to designate counsel reasonably acceptable to the Indemnified Party and to
control all negotiations, litigation, arbitration, settlements, compromises and
appeals of such claim; provided that, if the indemnifying party assumes
the defense of such claim, it shall not be liable for any fees and expenses of
counsel for any Indemnified Party incurred thereafter in connection with such
claim except that, if such Indemnified Party reasonably determines that counsel
designated by the  22


indemnifying party has a
conflict of interest, such indemnifying party shall pay the reasonable fees and
disbursements of one counsel (in addition to any local counsel) separate from
such indemnifying partys own counsel for all Indemnified Parties in connection
with any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances; and provided,
further, that the indemnifying party shall not have the right, without
the Indemnified Partys written consent, to settle any such claim if, in a case
where the Issuer is the indemnifying party, the Issuer does not make available
(in accordance with the Priority of Payments), in a segregated account
available only for this purpose, the full amount required to pay any amounts
due from the Indemnified Party under such settlement or, in any case, such
settlement (A) arises from or is part of any criminal action, suit or
proceeding, (B) contains a stipulation to, confession of judgment with
respect to, or admission or acknowledgement of, any liability or wrongdoing on
the part of the Indemnified Party, (C) relates to any federal, state or
local tax matters or (D) provides for injunctive relief, or other relief
other than damages, which is binding on the Indemnified Party. (e)           In the event that
any Indemnified Party waives its right to indemnification hereunder, the
indemnifying party shall not be entitled to appoint counsel to represent such
Indemnified Party nor shall the indemnifying party reimburse such Indemnified
Party for any costs of counsel to such Indemnified Party. (f)            Nothing herein
shall in any way constitute a waiver or limitation of any rights that the
Issuer or the Collateral Manager may have under any United States federal or
state securities laws. 14.           Obligations of Collateral Manager.  (a) The Collateral Manager to the extent
required under the Indenture, and on behalf of the Issuer, shall
(i) engage the services of an Independent certified accountant to prepare
any United States federal, state or local income tax or information returns and
any non-United States income tax or information returns that the Issuer
may from time to time be required to file under applicable law (each, a Tax Return),
(ii) deliver, at least thirty (30) days before any applicable due date
upon which penalties and interest would accrue, each Tax Return, properly
completed, to the Company Administrator for signature by an Authorized Officer
of the Issuer and (iii) file or deliver such Tax Return on behalf of the
Issuer within any applicable time limit with any authority or Person as
required under applicable law. (b)           Unless otherwise
required by any provision of the Indenture or this Agreement or by applicable
law, the Collateral Manager shall not take any action which it knows, or acting
with gross negligence, would (a) materially adversely affect the Issuer for
purposes of United States federal or state law or any other law known to the
Collateral Manager to be applicable to the Issuer, (b) not be permitted under
the Issuers Memorandum and Articles of Association or the Co-Issuers limited
liability company agreement, (c) require registration of the Issuer, the
Co-Issuer or the Assets as an investment company under the Investment Company
Act or (d) cause the Issuer to violate the terms of the Indenture, including
any representation or certification to be given by the Issuer thereunder or
pursuant thereto, it being understood that in connection with the foregoing the
Collateral Manager will not be required to  23


make
any independent investigation of any facts or laws not otherwise known to it in
connection with its obligations under this Agreement and the Indenture or the
conduct of its business generally.  The
Collateral Manager will perform its duties under this Agreement and the
Indenture in a manner reasonably intended not to subject the Issuer to U.S.
federal or state income taxation, it being understood that, notwithstanding
anything to the contrary set forth herein or in the Indenture, the Collateral
Manager shall be deemed to have complied with the requirements of the Indenture
and any certifications, certificates or other related documents required
pursuant to the Indenture in connection with not subjecting the Issuer to U.S.
federal or state income taxation, if it satisfies the requirements set forth in
this sentence and will not be liable to the Trustee, the Holders of the Notes,
the Co-Issuers, the Co-Issuers creditors or any other Person as a result of
the Issuer engaging, or a determination that the Issuer has engaged, in a U.S.
trade or business for U.S. federal income tax purposes if it has complied with
this section.  The Collateral Manager
shall use all commercially reasonable efforts to ensure that no action is taken
by it, and shall not intentionally or with reckless disregard take any action,
which the Collateral Manager knows or reasonably should know would have a
materially adverse United States federal or state income tax effect on the
Issuer. (c)           Notwithstanding anything to the
contrary herein, but subject to the standard set forth in Section 1 hereof, the
Collateral Manager or any of its Affiliates may take any action that is not
specifically prohibited by the Indenture, this Agreement or applicable law that
the Collateral Manager or any Affiliate of the Collateral Managers deems to be
in its (or in its portfolios) best interest regardless of its impact on the
Collateral Debt Securities. 15.           No Partnership or Joint Venture.  The Issuer and the Collateral Manager are not
partners or joint venturers with each other, and nothing herein shall be
construed to make them such partners or joint venturers or impose any liability
as such on either of them.  The
Collateral Managers relation to the Issuer shall be that of an independent
contractor and not a general agent. 
Except as expressly provided in this Agreement and in the Indenture, the
Collateral Manager shall not have authority to act for or represent the Issuer
in any way and shall not otherwise be deemed to be the Issuers agent. The Collateral Manager
shall not have any duties or obligations except those expressly set forth
herein and in the Indenture.  Without
limiting the generality of the foregoing, (i) the Collateral Manager shall not
be subject to any fiduciary or other implied duty and (ii) the Collateral
Manager shall not have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly
contemplated hereby. 16.           Notices.  Any notice from a party under this Agreement
shall be in writing and sent by answer-back facsimile or addressed and
delivered or sent by certified mail, postage prepaid, return receipt requested
or sent by overnight courier service guaranteeing next day delivery to the
other party at such address as such other party may designate for the receipt
of such notice.  Until further notice to
the other party, it is agreed that the address of the Issuer for this purpose
shall be:  24


Gramercy Real Estate CDO 2007-1, Ltd.
c/o Maples Finance Limited
P.O. Box 1093GT
Boundary Hall
Cricket Square
George Town
Grand Cayman, Cayman Islands
Attention:  The Directors
Fax:  +1 345 945 7100
Telephone:  +1 345 945 7099 with two copies to the Collateral Manager (as
addressed below). the address of the
Collateral Manager for this purpose shall be: GKK Manager LLCc/o SL Green Realty Corp. 420 Lexington Avenue 19th Floor New York, New York 10170
Telephone:  212-594-2700
Fax:  212-216-1785
Attention:  Marc Holliday Attention: 
Andrew Levine 17.           Succession; Assignment.  (a) 
This Agreement shall inure to the benefit of and be binding upon the
successors to the parties hereto. No assignment of this Agreement shall be made
without the consent of the other party except as set forth below and without
satisfaction of the Rating Agency Condition (except as permitted under clauses
(b) and (c) below), provided that the Issuer may collaterally assign its
interest in this Agreement to the Trustee under the Indenture. (b)           Upon satisfaction of
the Rating Agency Condition, this Agreement may be assigned by the Collateral
Manager to an Affiliate thereof that has substantially the same personnel, or
personnel with comparable expertise, as the Collateral Manager and that is capable
of performing the obligations of the Collateral Manager under this Agreement; provided
that satisfaction of the Rating Agency Condition shall not be required in
connection with any assignment involving an internalization of the Collateral
Manager or any assignment to a successor upon merger or acquisition.  Notwithstanding the foregoing, the Collateral
Manager shall provide S&P and Moodys with prompt notice of any assignment
involving an internalization of the Collateral Manager. (c)           This Agreement may be
assigned by the Collateral Manager to any Person other than an Affiliate only
upon satisfaction of the Rating Agency Condition and approval by a Majority of
the Controlling Class. (d)           Upon the execution
and delivery of such a counterpart by the assignee, the Collateral Manager
shall be released from further obligations pursuant to this Agreement, except  25


with
respect to the Collateral Managers obligations arising under Section 13 of
this Agreement prior to such assignment and except with respect to the
Collateral Managers obligations under the last sentence of Section 10 and
Sections 7 and 12 hereof 18.           No Bankruptcy Petition/Limited
Recourse.  The Collateral Manager
covenants and agrees that, prior to the date that is one year and one day (or,
if longer, the applicable preference period then in effect) after the payment
in full of all Notes issued by the Issuer under the Indenture, the Collateral
Manager will not institute against, or join any other Person in instituting
against, the Issuer or the Co-Issuer any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other proceedings under
any bankruptcy, insolvency, reorganization or similar law of any jurisdiction; provided,
however, that nothing in this Section 18 shall preclude, or be deemed to
stop, the Collateral Manager from taking any action prior to the expiration of
the aforementioned one year and one day period (or, if longer, the applicable
preference period then in effect) in (x) any case or proceeding
voluntarily filed or commenced by the Issuer or the Co-Issuer, as the case may
be or (y) any involuntary insolvency proceeding filed or commenced against
the Issuer or the Co-Issuer, as the case may be, by a Person other than the
Collateral Manager.  The Collateral
Manager hereby acknowledges and agrees that the Issuers obligations hereunder
will be solely the corporate obligations of the Issuer, and the Collateral
Manager will not have recourse to any of the directors, officers, employees,
shareholders or affiliates of the Issuer, or any members of the Advisory
Committee, with respect to any claims, losses, damages, liabilities,
indemnities or other obligations in connection with any transaction
contemplated hereby.  Notwithstanding any
provision hereof, all obligations of the Issuer and any claims arising from
this Agreement or any transactions contemplated by this Agreement shall be
limited solely to the Collateral Debt Securities and the other Assets and
payable in accordance with the Priority of Payments.  If payments on any such claims from the
Assets are insufficient, no other assets shall be available for payment of the
deficiency and, following liquidation of all the Assets, any claims of the
Collateral Manager arising from this Agreement and the obligations of the
Issuer to pay such deficiencies shall be extinguished.  The Issuer hereby acknowledges and agrees
that the Collateral Managers obligations hereunder shall be solely the limited
liability company obligations of the Collateral Manager, and the Issuer shall
not have any recourse to any of the members, managers, directors, officers,
employees, shareholders or Affiliates of the Collateral Manager with respect to
any claims, losses, damages, liabilities, indemnities or other obligations in
connection with any transactions contemplated hereby.  The provisions of this Section 18 shall
survive the termination of this Agreement for any reason whatsoever. 19.           Miscellaneous.  (a)  This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
New York without regard to the conflict of laws principles thereof other than
Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New
York.  With respect to any suit, action
or proceedings relating to this Agreement (Proceedings), each party irrevocably
(i) submits to the nonexclusive jurisdiction of the courts of the State of
New York and the United States District Court located in the Borough of
Manhattan in New York City and (ii) waives any objection that such party
may have at any time to the laying of venue of any Proceedings brought in any
such court, waives any claim that such Proceedings have been brought in an
inconvenient forum and further waives the right to object, with respect to such
Proceedings, that such court does not have any jurisdiction over such
party.  Nothing in this Agreement
precludes either party from bringing Proceedings in  26


any other jurisdiction, nor
shall the bringing of Proceedings in any one or more jurisdictions preclude the
bringing of Proceedings in any other jurisdiction.  The Collateral Manager irrevocably consents
to the service of any and all process in any action or proceeding by the
mailing or delivery of copies of such process to the Collateral Manager at the
office of the Collateral Manager, c/o SL Green Realty Corp., 420 Lexington
Avenue, 19th Floor, New York, New York 10170, Attention:  Andrew Levine, or such other address as the
Collateral Manager may advise the Issuer in writing.  The Issuer irrevocably consents to the
service of any and all process in any action or proceeding by the mailing or
delivery of copies of such process to CT Corporation System, 111 8th
Avenue, 13th Floor, New York, New York 10011 (and any successor
entity), as its authorized agent to receive and forward on its behalf service
of any and all process which may be served in any such suit, action or
proceeding in any such court and agrees that service of process upon CT
Corporation System shall be deemed in every respect effective service of
process upon it in any such suit, action or proceeding and shall be taken and
held to be valid personal service upon it. 
Each party hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. (b)           The captions in this
Agreement are included for convenience only and in no way define or limit any
of the provisions hereof or otherwise affect their construction or effect. (c)           In the event any
provision of this Agreement shall be held invalid or unenforceable by any court
of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof. (d)           This Agreement
(including all Exhibits attached hereto) may not be amended or modified or any
provision thereof waived (i) except by an instrument in writing signed by
both of the parties hereto or, in the case of a waiver, by the party waiving
compliance and (ii) in each case, in compliance with Section 15.1(f)
of the Indenture, including with respect to satisfaction of the Rating Agency
Condition.  This Agreement (including all
Exhibits attached hereto) may be modified without the prior written consent of
the Trustee, any Hedge Counterparty or the holders of Notes to correct any
inconsistency or cure any ambiguity or mistake. 
Any other amendment of this Agreement (including all Exhibits attached
hereto) shall require the prior written consent of the Trustee and each Hedge
Counterparty, which consent shall not be unreasonably withheld and is subject
to the satisfaction of the Rating Agency Condition. (e)           This Agreement
constitutes the entire understanding and agreement between the parties hereto
and supersedes all other prior and contemporaneous understandings and
agreements, whether written or oral, between the parties hereto concerning this
subject matter (other than the Indenture).  27


(f)            The Collateral
Manager hereby agrees and consents to the terms of Section 15.1(f) of the
Indenture applicable to the Collateral Manager and shall perform any provisions
of the Indenture made applicable to the Collateral Manager by the Indenture as
required by Section 15.1(f) of the Indenture. (g)           This Agreement may
be executed in any number of counterparts, each of which so executed shall be
deemed an original, but all such counterparts shall together constitute one and
the same instrument. (h)           The words include,
includes and including shall be deemed to be followed by the phrase but
not limited to. (i)            Subject to the last
sentence of the third to last paragraph of Section 1 hereof, in the event
of a conflict between the terms of this Agreement and the Indenture, including
with respect to the obligations of the Collateral Manager hereunder and
thereunder, the terms of this Agreement shall be controlling. (j)            No failure or delay
on the part of any party hereto to exercise any right or remedy under this
Agreement shall operate as a waiver thereof, and no waiver shall be effective
unless it is in writing and signed by the party granting such waiver. (k)           This Agreement is
made solely for the benefit of the Issuer, the Collateral Manager and the
Trustee, on behalf of the Noteholders, the Holders of Preferred Shares and each
Hedge Counterparty, their successors and assigns, and no other person shall
have any right, benefit or interest under or because of this Agreement. (l)            The Collateral
Manager hereby irrevocably waives any rights it may have to set off against the
Assets.  28


IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed (as a deed in the case
of the Issuer) by their respective authorized representatives as of the day and
year first above written.  Executed as a DeedGRAMERCY REAL ESTATE CDO 2007-1,LTD., as IssuerBy:
  /s/ Robert R. FoleyName: Robert R. FoleyTitle: Chief Financial OfficerWitness:GKK MANAGER LLC,as Collateral ManagerBy:
  /s/ Robert R. FoleyName: Robert R. FoleyTitle: Chief Financial
  Officer


EXHIBIT A Advisory
Committee Guidelines 1.             General. If the Collateral Manager desires
to direct a trade between the Issuer and the Collateral Manager or any of its
Affiliates, acting as principal (other than with respect to Permitted Cash
Purchases, sales of property or securities in accordance with the Origination
Agreementand sales
of Assets pursuant to an auction in connection with an Auction Call Redemption
or in connection with a redemption of the Notes pursuant to Article 9 of the
Indenture,none of which shall require the approval of the Advisory Committee)
(each such trade, a Restricted Transaction), before effecting such
trade, it shall first present such Restricted Transaction to the Advisory
Committee for review and prior approval. 2.             Composition of the Advisory Committee. The Advisory Committee must
be comprised of at least one person (which may be an individual or an entity),
who is Independent (as defined in the Indenture) of the Collateral Manager
(each such person, an Independent Member), who acts as a surrogate
for, and in the best interest of, the holders of the Securities, and issubject to the Additional Advisory
Committee Guidelines attached hereto as Exhibit B-1 (the Independent
Member Guidelines). The Advisory Committee also
may have one or more members appointed by the Collateral Manager and employed
by the Collateral Manager or an Affiliate thereof (each such person, an Affiliated
Member), which members aresubject to the Additional Advisory Committee
Guidelines attached hereto as Exhibit B-2 (the Affiliated Member
Guidelines). 3.             Requisite Experience. Each member of the Advisory
Committee must at the time of appointment and at all relevant times thereafter
have Requisite Experience. The Collateral Manager and
the Issuer will have the right to accept a representation and warranty from a
member regarding its Requisite Experience, in the absence of actual knowledge
by a responsible officer of the Collateral Manager to the contrary. Requisite Experience
means experience as a sophisticated investor, including, without limitation, in
fixed income investing (directly and/or through investment vehicles) and/or
substantial experience and knowledge in and of the commercial real estate loan
market and related investment arenas, such that the relevant Advisory Committee
member believes that it is capable of determining whether or not to participate
in Advisory Committee decisions on the basis of the provisions described
herein.  Such person need not be a
professional loan investor or loan originator.  A-1


4.             Appointment of Initial Members of the Advisory
Committee. The initial members of the
Advisory Committee will be appointed by the Collateral Manager.  Thereafter the Collateral Manager will have
the right to appoint a member to replace any member that resigns.  Notwithstanding the foregoing, in the event
of a resignation of the Independent Member, a replacement Independent Member
may be appointed by the Issuer if the Collateral Manager does not promptly
appoint a replacement Independent Member. 5.             Term. Each member of the Advisory
Committee will serve until he or she resigns, dies or is removed. 6.             Approval Process. If the Collateral Manager
wants the Issuer to consider a Restricted Transaction, the Collateral Manager
will give notice of the proposed Restricted Transaction to the members of the
Advisory Committee.  The notice will
contain the request by the Collateral Manager for the Advisory Committees
consent to the Restricted Transaction. 
The notice will be accompanied by: an investment memorandum;
and an underwriting analysis. The investment memorandum
will (a) be a reasonably detailed (anticipated to be approximately two pages)
description of the proposed investment, the issuer thereof and related
information and (b) include information about the identity of any Affiliated
Person involved in the proposed investment and the capacity in which it will be
acting and a narrative about why, in the judgment of the Collateral Manager,
the investment is appropriate to be purchased or sold by the Issuer, as the case
may be.  The notice will contain the
Collateral Managers offer to provide additional information as requested to
the Advisory Committee. 7.             Unanimous Written Consent. Regardless of the
composition of the Advisory Committee, each Restricted Transaction must be
approved in writing by each member of the Advisory Committee. The members of the Advisory
Committee are under no obligation to consent to a Restricted Transaction. If all of the members of the
Advisory Committee approve a Restricted Transaction in writing, the Issuer will
effect it at the option of the Collateral Manager (subject to the others terms
of this Agreement and the Indenture). If the members of the
Advisory Committee notify the Collateral Manager that the Advisory Committee
will not approve the Restricted Transaction, the Issuer will not effect the
Restricted Transaction.  A-2


If at any time the Advisory
Committee does not have at least one Independent Member or any member does not
have Requisite Experience, the Collateral Manager will not be permitted to use
the Advisory Committee to approve any Restricted Transaction. 8.             Compensation. Each Independent Member
shall receive arms length compensation by the Issuer for serving on the
Advisory Committee as agreed between such member and the Issuer.  A-3


EXHIBIT B-1 Additional
Advisory Committee Guidelines Independent
Member 1.             Independent Member Duties. As an Independent Member of
the Advisory Committee, the Member shall: (a)           serve on the Advisory Committee and attend meetings of the
Advisory Committee at such times and places (and/or telephonically or by
correspondence or otherwise) as shall be reasonably requested by the Issuer and
the Collateral Manager; (b)           promptly consider certain actions to be taken with respect
to certain Restricted Transactions presented by the Collateral Manager (as
further described in the Advisory Committee Guidelines); (c)           in connection with considering Restricted Transactions,
promptly review and consider investment memoranda, underwriting analyses and
other information presented to the Member on behalf of the Issuer to the
Advisory Committee in connection with the foregoing; and (d)           take such other actions as may be reasonably necessary or
advisable in connection with the foregoing; provided, however,
that (i) if the Member believes that the Member or an Affiliate thereof, or any
of their respective officers, directors, employees, stockholders, partners,
members or managers, has an interest in any Restricted Transaction, the Member
shall promptly disclose such interest to the Issuer and the Collateral Manager
and shall recuse himself from any consideration of such Restricted Transaction
(in each case unless the Collateral Manager and each other member of the
Advisory Committee (assuming that at least one such member of the Advisory
Committee is an Independent Member and is not affiliated with the Restricted
Transaction at issue) shall determine that such interest does not create a
disabling conflict) and (ii) if the Member believes that, because of an actual
or potential conflict of interest relating to a Restricted Transaction, it
would be inappropriate or inadvisable for the Member to receive any
Confidential Information (as defined in Paragraph 8 of this Exhibit B-1),
the Member shall recuse himself from any consideration of such Restricted
Transaction.   B-1-1


2.             Representations and Warranties. The Member, by its execution
of an Advisory Committee Member Acknowledgement and Agreement (the Acknowledgment
and Agreement), will be deemed to represent and warrant that: (a)           the
Member is Independent of the Collateral Manager (including, for this purpose,
an employee, partner, member or director thereof); and (b)           the
Member has the Requisite Experience (as set forth in the Advisory Committee
Guidelines). If the representations and
warranties set forth in this Paragraph 2 shall at any time fail to be true and
correct, the Member shall promptly notify the Issuer and the Collateral Manager
of that fact and shall immediately resign from the Advisory Committee. 3.             Compensation. During the Term (as defined
in Paragraph 7 of this Exhibit B-1), the Issuer shall pay the Member a per annum fee (the Fee) at a rate to be established
between the Collateral Manager and the Member, payable on each Payment Date (as
defined in the Indenture), subject to the Priority of Payments (as defined in
the Indenture).  The Fee payable on any
specified Payment Date (as defined in the Indenture) shall accrue during each
period from and including the preceding Payment Date (or, with respect to the
first payment, from and including the date hereof) to but excluding such
specified Payment Date (or, if earlier, to but excluding the last day of the
Term), calculated on the basis of the actual number of days elapsed over a year
of 365 or 366 days, as the case may be. 
If any Fee is not paid when due as a result of lack of available funds
under the Priority of Payments, such Fee shall be deferred and shall be payable
on subsequent Payment Dates in accordance with the Priority of Payments. The Issuer shall reimburse
the Member, promptly after demand therefor accompanied by reasonable supporting
documentation, for any reasonable authorized expenses incurred in connection
with any meetings of or actions by the Advisory Committee.  B-1-2


4.             Exculpation and Indemnification. (a)           The Member shall not be liable to the Issuer, the
Co-Issuer, any holder of the Notes, any holder of the Preferred Shares, any
holder of ordinary shares of the Issuer or the Collateral Manager (i) for any
losses incurred as a result of the actions taken or omitted to be taken by the
Member pursuant to the provisions of this Exhibit B-1 or the Advisory
Committee Guidelines, except that the Member may be so liable to the extent
such losses are the result of acts or omissions constituting willful
misconduct, fraud or gross negligence by the Member in the performance of its
obligations hereunder or under the Advisory Committee Guidelines or (ii) for
the acts or omissions of any other member of the Advisory Committee. (b)           The Issuer shall indemnify the Member for, and hold the
Member harmless against, any loss, liability or expense (including without
limitation reasonable attorneys fees and expenses) incurred arising out of or
in connection with the Members service as a member of the Advisory Committee,
including the costs and expenses of defense against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder (collectively, Losses); provided, however,
that the Issuer shall not indemnify the Member for any Losses incurred as a
result of acts or omissions constituting willful misconduct, fraud or gross
negligence by the Member in the performance of its obligations hereunder or
under the Advisory Committee Guidelines. (c)           If any action shall
be instituted involving the Member for which indemnification hereunder may be
applicable, such Member shall promptly notify the Issuer and the Collateral
Manager in writing and the Issuer shall have the right to retain counsel
reasonably satisfactory to the Issuer and the Collateral Manager to represent
the Member and any others the Issuer may designate in such proceeding and shall
pay the reasonable fees and disbursements of such counsel related to such
proceeding.  In any such proceeding, the
Member shall have the right to retain individual counsel, but the fees and
expenses of such counsel shall be at the expense of the Member unless (i) the
Issuer and the Member shall have agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded parties)
include the Member and the Issuer and representation of all such parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them.  It is understood
that the Issuer shall not, in connection with any proceeding or related proceedings
in the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for the Member and any other
members of the Advisory Committee, and that all such reasonable fees and
expenses shall be reimbursed as they are incurred.  The Issuer shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff,
the Issuer agrees, subject to the limitations noted herein, to indemnify the
Member from and against any loss or liability by reason of such settlement or
judgment.  The Issuer shall not, without
the prior written consent of the Member, effect any settlement of any pending
or threatened proceeding in respect of which the Member is or is likely to have
been a party, unless such settlement includes an unconditional release of the
Member from all liability on claims that are the subject matter of such
proceeding.  Notwithstanding the
foregoing, if any person shall pay the Member any amount of indemnification
pursuant to this Paragraph 4, such person shall succeed to the rights of the
Issuer, to the exclusion of the Issuer, set forth in this Paragraph 4(c)
(including, but not limited  B-1-3


to, the right of the Issuer to retain counsel to represent the Member
in any related proceeding and to effect any settlement of any related pending
or threatened proceeding). 5.             Notices. All notices, requests, consents,
approvals and other communications required or permitted to be given or
delivered hereunder shall be in writing (which shall include notice by telecopy
or like transmission) and shall be deemed to have been given when delivered
personally against receipt, upon receipt of a transmitted confirmation if sent
by telecopy or like transmission, or on the next business day when sent by
overnight courier or similar service, if addressed to the respective parties as
follows: If to the Issuer, to: Gramercy Real Estate CDO
2007-1, Ltd. c/o Maples Finance Limited P.O. Box 1093GT Boundary Hall Cricket Square George Town Grand Cayman, Cayman Islands Telephone:  +1 (345) 945-7099 Fax:  + 1 (345) 945-7100 Attention:  The Directors with a copy to: GKK Manager LLC c/o SL Green Realty Corp. 420 Lexington Avenue, 19th
Floor New York, New York 10170 Telephone:  (212) 594-2700 Fax:  (212) 216-1785 Attention:  Andrew Levine Attention:  Marc Holliday If to the Member, to the
address set forth on the Acknowledgement and Agreement, or to such other address or
telephone number as either party shall have specified by notice in writing to
the other party; provided, however, that any such notice of
change of address or facsimile number shall be effective only upon receipt.  B-1-4


6.             Monthly Reports. The Issuer shall provide or
cause to be provided to the Member a copy of each Monthly Report (as defined in
the Indenture), substantially and contemporaneously with its delivery to the Rating
Agencies (as defined in the Indenture) under the Indenture. 7.             Term; Termination. (a)           The Members term as an Independent Member of the Advisory
Committee (the Term) shall commence on the date of its execution of the
Acknowledgement and Agreement and shall continue until the earlier of: (i) the
liquidation and winding-up of the Issuer; (ii) the payment in full of all
Notes; (iii) the death of the Member; and (iv) the effective date of any
resignation or removal of the Member as an Independent Member of the Advisory
Committee as provided in this Paragraph 7. (b)           The Member shall have the right to resign as a member of
the Advisory Committee at any time upon 10 days prior written notice to the
Issuer, except that any resignation pursuant to Paragraph 2 shall be effective
immediately.  The Collateral Manager
shall have the right to appoint an Independent Member to replace any
Independent Member that resigns. (c)           The holders of 66 2/3%, by outstanding principal amount,
of each Class of Notes voting as a separate Class (excluding any Notes held by
the Collateral Manager, any of its Affiliates or any funds (other than the
Issuer) managed by the Collateral Manager or its Affiliates) shall have the
right to remove the Member for cause. 
For this purpose, cause shall mean: 
(i) the Members breach of any material provisions hereof and its
failure to cure such breach within ninety (90) days after the first to occur of
(x) notice of such failure is given to the Member and (y) the Member has actual
knowledge of such breach; (ii) an act by the Member that constitutes fraud or
criminal activity in the performance of its obligations hereunder or the Member
is indicted of a felony offense or other crime involving an investment or
investment-related business, fraud, false statements or omissions, wrongful
taking of property, bribery, forgery, counterfeiting or extortion, in a court
of competent jurisdiction (including the entry of a guilty or nolo contendere
plea) or (iii) the Member becomes affiliated with the Collateral Manager or any
affiliate of the Collateral Manager. (d)           The Member also shall be subject to immediate removal from
the Committee for cause by the Collateral Manager.  For purposes of this Paragraph 9(d), cause
shall mean:  (i) each of the events listed
in clauses (i) through (iii) of the definition of cause in Paragraph 9(c)
above; (ii) the Members failure to substantially perform its duties hereunder
and/or under the Advisory Committee Guidelines; (iii) any of the Members
representations and warranties set forth in Paragraph 2 hereof becomes untrue;
or (iv) the Member fails to respond to a notice provided by the Collateral
Manager with respect to a Restricted Transaction within five business days
after such notice or if the Member is not available to consider a Restricted
Transaction within five business days after such notice.  B-1-5


If the Members Term is
terminated pursuant to this Paragraph 7, such termination shall be without any
further liability or obligation of either party to the other, except that any
liability or obligation of either party under Paragraph 3 or 4 shall survive
the termination of such Member. 8.             Confidentiality. 
The Member may receive certain information from the Collateral Manager
and/or the Issuer in connection with its service as a member of the Advisory
Committee.  The Member agrees, as set
forth in this Paragraph 10, to treat confidentially any Confidential Material
(as defined below). (a)           Confidential Material means any non-public,
confidential or proprietary information that is or has been provided by the
Collateral Manager or the Issuer to the Member or the Members employees,
attorneys, accountants, advisors or other authorized representatives
(collectively, Representatives) in connection with the Members
service on the Advisory Committee, regardless of the form in which such
information is communicated or maintained, and all notes, reports, analyses,
compilations, studies, files or other documents or material, whether prepared
by the Member or others, which are based on, contain or otherwise reflect such
information.  However, Confidential
Material does not include any information that (i) at the time of disclosure
or thereafter is generally available to and known by the public (other than as
a result of a disclosure in violation of this Paragraph 10 directly or
indirectly by the Member or the Members Representatives), (ii) was available
to the Member on a non-confidential basis from a source other than the
Collateral Manager or the Issuer or its advisors, or (iii) was independently
acquired or developed by the Member without violating any provision of this
Paragraph 10. (b)           The Member agrees that all Confidential Material shall be
kept confidential by the Member and, except with the specific prior written
consent of the Issuer and the Collateral Manager or as expressly otherwise
permitted by the terms hereof, will not be disclosed by the Member to any
person, other than any of the Members Representatives that need to know such
information solely for the purpose of the Members service on the Advisory
Committee (it being understood that, before disclosing the Confidential
Material or any portion thereof to such Representatives, the Member shall
inform such Representatives of the confidential nature of the Confidential
Material and the restrictions related thereto). 
The Member agrees to be responsible for any breach of this Paragraph 10
by the Members Representatives. The Member further agrees that the Member
shall not use Confidential Material for any reason or purpose other than in
connection with its service on the Advisory Committee.  In addition, without the prior written
consent of the Issuer and the Collateral Manager, the Member agrees not to
disclose to any person, other than the Members Representatives that need to
know such information in connection with the Members service on the Advisory
Committee, the fact that Confidential Material has been made available to the
Member or that the Member is considering any investment presented to it by the
Collateral Manager on behalf of the Issuer. (c)           If the Member is requested or required, by oral questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process, to disclose Confidential Material, the
Member shall provide the Issuer and the Collateral Manager with prompt notice
of such event so that the Issuer and/or the Collateral Manager may seek a
protective order or other appropriate remedy or waive compliance with the
applicable provisions of this Paragraph 10 by the Member.  If the Issuer or the Collateral Manager
determines to seek such protective order or other remedy, the Member shall
cooperate with the Issuer or the  B-1-6


Collateral Manager in
seeking such protective order or other remedy. If neither the Issuer nor the
Collateral Manager is able to seek such protective order or other remedy, the
Member shall seek it as directed by the Issuer or the Collateral Manager.  If such protective order or other remedy is
not obtained and disclosure of Confidential Material is required, or the Issuer
grants a waiver hereunder, the Member (i) may furnish that portion (and only
that portion) of the Confidential Material which the Member is legally required
to disclose and (ii) will exercise reasonable best efforts to have confidential
treatment afforded any Confidential Material so furnished. (d)           Upon the termination hereof or upon the written request of
the Issuer or the Collateral Manager at any time, the Member shall promptly
deliver or cause to be delivered to the Issuer or the Collateral Manager or to
a person designated by the Issuer or the Collateral Manager (or will destroy,
with such destruction to be certified to the Issuer and the Collateral Manager)
all documents or other matter furnished to the Member by or on behalf of the
Issuer or the Collateral Manager constituting Confidential Material, together
with all copies thereof in the possession of the Member.  In such event, all other documents or other
matter constituting Confidential Material prepared by the Member will be
destroyed, with any such destruction certified to the Issuer and the Collateral
Manager. 9.             Limited Recourse. Notwithstanding any other
provision hereof, the Member acknowledges and agrees that he shall have
recourse only to the Assets in respect of any claim, action, demand or right
arising in respect of, or against, the Issuer and following realization of the
Assets, any claims of the Member against the Issuer shall be extinguished and
shall not thereafter revive. 
Notwithstanding any other provision hereof or in the Indenture, no
member of the Advisory Committee or any Affiliate thereof shall be personally
liable to the Member for any amounts payable, or performance due, by the Issuer
hereunder.   The Member agrees that the
obligations of the Issuer to the Member are solely the corporate obligations of
the Issuer and that the Member will not have recourse to any of the directors,
officers, employees, shareholders or affiliates of the Issuer with respect to
any claims, losses, damages, liabilities, indemnities or other obligations in
connection with any transaction contemplated hereby or in connection herewith.  This provision shall survive termination of
the Term. 10.           Non-Petition. The Member agrees that,
before the date that is one year and one day or if longer, the expiration of
the then applicable preference period plus one day, after the payment in full
of all Notes the Member shall not acquiesce, petition, join any other Person in
any petition or otherwise invoke or cause any other Person to invoke the
process of any governmental authority for the purpose of commencing or
sustaining a case against the Issuer under any federal or state bankruptcy,
insolvency or similar law of any jurisdiction or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of the Issuer or any substantial part of its property or ordering the
winding-up or liquidation of the affairs of the Issuer.  This provision shall survive termination of
the Term.  B-1-7


11.           Amendments. The provisions of this Exhibit
B-1 may be amended only by an instrument in writing signed by the Issuer
and the Member and consented to by the Collateral Manager. 12.           Third Parties. Nothing herein, expressed or
implied, shall give to any person, other than the Issuer, the Member and the
Collateral Manager, any benefit or any legal or equitable right, remedy or
claim hereunder. 13.           Third Party Beneficiary. Each of the Issuer and the
Member agrees that the Collateral Manager is, and that it is intended that the
Collateral Manager be afforded all the benefits of, an express third-party
beneficiary in respect of the provisions hereof.  B-1-8


EXHIBIT B-2 Additional
Advisory Committee Guidelines Affiliated
Member 1.             Affiliated Member Duties. As an Affiliated Member of
the Advisory Committee, the Member shall: (a)           serve on the Advisory Committee and attend meetings of the
Advisory Committee at such times and places (and/or telephonically or by
correspondence or otherwise) as shall be reasonably requested by the Issuer and
the Collateral Manager; (b)           promptly consider certain actions to be taken with respect
to certain Restricted Transactions presented by the Collateral Manager (as
further described in the Advisory Committee Guidelines); (c)           in connection with considering Restricted Transactions,
promptly review and consider investment memoranda, underwriting analyses and
other information presented to the Member on behalf of the Issuer to the
Advisory Committee in connection with the foregoing; and (d)           take such other actions as may be reasonably necessary or
advisable in connection with the foregoing; provided, however,
that (i) if the Member believes that the Member or an Affiliate thereof, or any
of their respective officers, directors, employees, stockholders, partners,
members or managers, has an interest in any Restricted Transaction, the Member
shall promptly disclose such interest to the Issuer and the Collateral Manager
and shall recuse himself from any consideration of such Restricted Transaction
(in each case unless the Collateral Manager and each other member of the
Advisory Committee (assuming that at least one such member of the Advisory
Committee is an Independent Member and is not affiliated with the Restricted
Transaction at issue) shall determine that such interest does not create a
disabling conflict) and (ii) if the Member believes that, because of an actual
or potential conflict of interest relating to a Restricted Transaction, it
would be inappropriate or inadvisable for the Member to receive any
confidential information related to such Restricted Transaction, the Member
shall recuse himself from any consideration of such Restricted Transaction.  B-2-1


2.             Representations and Warranties. The Member, by its execution
of an Advisory Committee Member Acknowledgement and Agreement (the Acknowledgment
and Agreement), will be deemed to represent and warrant that the Member
has the Requisite Experience (as set forth in the Advisory Committee
Guidelines). If the representations and
warranties set forth in this Paragraph 2 shall at any time fail to be true and
correct, the Member shall promptly notify the Issuer and the Collateral Manager
of that fact and shall immediately resign from the Advisory Committee. 3.             Exculpation and Indemnification. (a)           The Member shall not be liable to the Issuer, the
Co-Issuer, any holder of the Notes, any holder of the Preferred Shares, any
holder of ordinary shares of the Issuer or the Collateral Manager (i) for any
losses incurred as a result of the actions taken or omitted to be taken by the
Member pursuant to the provisions of this Exhibit B-2 or the Advisory
Committee Guidelines, except that the Member may be so liable to the extent
such losses are the result of acts or omissions constituting willful
misconduct, fraud or gross negligence by the Member in the performance of its
obligations hereunder or under the Advisory Committee Guidelines or (ii) for
the acts or omissions of any other member of the Advisory Committee. (b)           The Issuer shall indemnify the Member for, and hold the
Member harmless against, any loss, liability or expense (including without
limitation reasonable attorneys fees and expenses) incurred arising out of or
in connection with the Members service as a member of the Advisory Committee,
including the costs and expenses of defense against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder (collectively, Losses); provided, however,
that the Issuer shall not indemnify the Member for any Losses incurred as a
result of acts or omissions constituting willful misconduct, fraud or gross
negligence by the Member in the performance of its obligations hereunder or
under the Advisory Committee Guidelines. (c)           If any action shall
be instituted involving the Member for which indemnification hereunder may be
applicable, such Member shall promptly notify the Issuer and the Collateral
Manager in writing and the Issuer shall have the right to retain counsel
reasonably satisfactory to the Issuer and the Collateral Manager to represent
the Member and any others the Issuer may designate in such proceeding and shall
pay the reasonable fees and disbursements of such counsel related to such
proceeding.  In any such proceeding, the
Member shall have the right to retain individual counsel, but the fees and
expenses of such counsel shall be at the expense of the Member unless (i) the
Issuer and the Member shall have agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded parties)
include the Member and the Issuer and representation of all such parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them.  It is understood
that the Issuer shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any  B-2-2


local counsel) for the Member and any other members of the Advisory
Committee, and that all such reasonable fees and expenses shall be reimbursed
as they are incurred.  The Issuer shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Issuer agrees, subject to the limitations noted herein, to
indemnify the Member from and against any loss or liability by reason of such
settlement or judgment.  The Issuer shall
not, without the prior written consent of the Member, effect any settlement of
any pending or threatened proceeding in respect of which the Member is or is
likely to have been a party, unless such settlement includes an unconditional
release of the Member from all liability on claims that are the subject matter
of such proceeding.  Notwithstanding the
foregoing, if any person shall pay the Member any amount of indemnification
pursuant to this Paragraph 3, such person shall succeed to the rights of the
Issuer, to the exclusion of the Issuer, set forth in this Paragraph 3(c)
(including, but not limited to, the right of the Issuer to retain counsel to
represent the Member in any related proceeding and to effect any settlement of
any related pending or threatened proceeding). 4.             Notices. All notices, requests,
consents, approvals and other communications required or permitted to be given
or delivered hereunder shall be in writing (which shall include notice by
telecopy or like transmission) and shall be deemed to have been given when
delivered personally against receipt, upon receipt of a transmitted
confirmation if sent by telecopy or like transmission, or on the next business
day when sent by overnight courier or similar service, if addressed to the
respective parties as follows: If to the Issuer, to: Gramercy Real Estate CDO
2007-1, Ltd. c/o Maples Finance Limited P.O. Box 1093 GT Boundary Hall Cricket Square George Town Grand Cayman, Cayman Islands Telephone:  +1 (345) 945-7099 Fax:  + 1 (345) 945-7100 Attention:  The Directors with a copy to: GKK Manager LLC c/o SL Green Realty Corp. 420 Lexington Avenue, 19th
Floor New York, New York 10170  B-2-3


Telephone:  (212) 594-2700 Fax:  (212) 216-1785 Attention:  Andrew Levine Attention:  Marc Holliday  If to the Member, to the
address set forth on the Acknowledgement and Agreement, or to such other address or
telephone number as either party shall have specified by notice in writing to
the other party; provided, however, that any such notice of change of address
or facsimile number shall be effective only upon receipt. 5.             Monthly Reports. The Issuer shall provide or
cause to be provided to the Member a copy of each Monthly Report (as defined in
the Indenture), substantially and contemporaneously with its delivery to the
Rating Agencies (as defined in the Indenture) under the Indenture. 6.             Term; Termination. (a)           The Members term as a Member of the Advisory Committee
(the Term) shall commence on the date of its execution of the Acknowledgement
and Agreement and shall continue until the earlier of: (i) the liquidation and
winding-up of the Issuer; (ii) the payment in full of all Notes; (iii) the
death of the Member; and (iv) the effective date of any resignation or removal
of the Member as an Affiliated Member of the Advisory Committee as provided in
this Paragraph 6. (b)           The Member shall have the right to resign as a member of
the Advisory Committee at any time upon 10 days prior written notice to the
Issuer, except that any resignation pursuant to Paragraph 2 shall be effective
immediately.  The Collateral Manager
shall have the right to appoint a Member to replace any Member that resigns. (c)           The holders of 66 2/3%, by outstanding principal amount,
of each Class of Notes voting as a separate Class (excluding any Notes held by
the Collateral Manager, any of its Affiliates or any funds (other than the
Issuer) managed by the Collateral Manager or its Affiliates) shall have the
right to remove the Member for cause. 
For this purpose, cause shall mean: 
(i) the Members breach of any material provisions hereof and its
failure to cure such breach within ninety (90) days after the first to occur of
(x) notice of such failure is given to the Member and (y) the Member has actual
knowledge of such breach; or (ii) an act by the Member that constitutes fraud
or criminal activity in the performance of its obligations hereunder or the
Member is convicted of a felony offense or other crime involving an investment
or investment-  B-2-4


related business, fraud,
false statements or omissions, wrongful taking of property, bribery, forgery,
counterfeiting or extortion, in a court of competent jurisdiction (including
the entry of a guilty or nolo contendere plea). 
Any replacement Affiliated Member shall be appointed by the Collateral
Manager. (d)           The Collateral Manager will have the right to remove any
Affiliated Member at any time in its sole discretion (with or without cause),
and such removal will not be subject to the appointment of any successor
Affiliated Member. If the Members Term is
terminated pursuant to this Paragraph 6, such termination shall be without any
further liability or obligation of either party to the other, except that any
liability or obligation of either party under Paragraph 3 shall survive the
termination of such Member. 7.             Limited Recourse. Notwithstanding any other
provision hereof, the Member acknowledges and agrees that he shall have
recourse only to the Assets in respect of any claim, action, demand or right
arising in respect of, or against, the Issuer and following realization of the
Assets, any claims of the Member against the Issuer shall be extinguished and
shall not thereafter revive. 
Notwithstanding any other provision hereof or in the Indenture, no
member of the Advisory Committee or any Affiliate thereof shall be personally
liable to the Member for any amounts payable, or performance due, by the Issuer
hereunder.  This provision shall survive
termination of the Term. 8.             Non-Petition. The Member agrees that,
before the date that is one year and one day, or if longer, the expiration of
the then applicable preference period plus one day, after the payment in full
of all Notes the Member shall not acquiesce, petition, join any other Person in
any petition or otherwise invoke or cause any other Person to invoke the
process of any governmental authority for the purpose of commencing or
sustaining a case against the Issuer under any federal or state bankruptcy,
insolvency or similar law of any jurisdiction or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of the Issuer or any substantial part of its property or ordering the
winding-up or liquidation of the affairs of the Issuer.  The Member agrees that the obligations of the
Issuer to the Member are solely the corporate obligations of the Issuer and
that the Member will not have recourse to any of the directors, officers,
employees, shareholders or affiliates of the Issuer with respect to any claims,
losses, damages, liabilities, indemnities or other obligations in connection
with any transaction contemplated hereby or in connection herewith.  This provision shall survive termination of
the Term. 9.             Amendments. The provisions of this Exhibit
B-2 may be amended only by an instrument in writing signed by the Issuer
and the Member and consented to by the Collateral Manager.  B-2-5


10.           Third Parties. Nothing herein, expressed or
implied, shall give to any person, other than the Issuer, the Member and the
Collateral Manager, any benefit or any legal or equitable right, remedy or
claim hereunder. 11.           Third
Party Beneficiary. Each of the Issuer and the Member agrees that the
Collateral Manager is, and that it is intended that the Collateral Manager be
afforded all the benefits of, an express third-party beneficiary in respect of
the provisions hereof.  B-2-6