Document:

Exhibit 10.6

 

EMPLOYMENT AND NONCOMPETITION AGREEMENT

 

This EMPLOYMENT AND NONCOMPETITION AGREEMENT
(“Agreement”) is made as of the 27th day of April, 2009, between Jon W. Clark (“Executive”)
and GKK Manager LLC, a Delaware limited liability company (the “Employer”), to
be effective as of April 24, 2009 (the “Effective Date”).

 

1.             Term.  The term of this Agreement shall commence on
the Effective Date and shall continue through, and terminate on, April 30,
2012 (the “Original Term”), unless earlier terminated as provided in Section 6
below.  The Original Term shall
automatically be extended for successive one (1) year periods (each a “Renewal
Term”), unless either party gives the other party at least three (3) months
written notice of desire to negotiate terms and/or non-renewal prior to the
expiration of the then current term.  The
period of Executive’s employment hereunder consisting of the Original Term and
all Renewal Terms, if any, is herein referred to as the “Employment Period.”

 

2.             Employment and
Duties.

 

(a)           Duties.  During the Employment Period, Executive shall
be employed in the business of the Employer and its affiliates.  Executive shall serve the Employer as a
senior executive.  In addition, Executive
shall serve as Chief Financial Officer of Gramercy Capital Corp. (“Gramercy”).  In his capacity as Chief Financial Officer,
Executive’s duties and authority shall be those as would normally attach to
Executive’s position as Chief Financial Officer, including such duties and
responsibilities as are customary among persons employed in similar capacities
for similar companies, but in all events such duties shall be commensurate with
his position as Chief Financial Officer of Gramercy and include, by way of
example, review and timely execution of filings and certifications customarily
made by a chief financial officer of a public company so long as they are true
and accurate in all material respects. 
Executive’s duties and authority shall be as further set forth by the
Employer.

 

(b)           Best Efforts.  Executive agrees to his employment as
described in this Section 2 and agrees to devote substantially all of his
business time and efforts to the performance of his duties under this
Agreement, except as otherwise approved by the Employer; provided, however,
that nothing herein shall be interpreted to preclude Executive, so long as
there is no material interference with his duties hereunder, from (i) participating
as an officer or director of, or advisor to, any charitable or other tax exempt
organization or otherwise engaging in charitable, fraternal or trade group
activities; (ii) investing and
managing his assets as an investor in other entities or business ventures;
provided that he performs no management or similar role (or, in the case of
investments other than those in entities or business ventures engaged in
the Business (as defined in Section 8),  he performs a management role comparable to the role that a
significant limited partner would have, but performs no day-to-day management
or similar role) with respect to such entities or ventures and such investment
does not violate Section 8 hereof; and provided, further, that, in any
case in which Executive knows that another party involved in the investment has
a business relationship with the Employer, Executive shall give prior written
notice thereof to the Employer; or (iii) serving as a member of the
Board of Directors of a for-profit corporation with the approval of the
Employer.

 

(c)           Travel.  In performing his duties hereunder, Executive
shall be available for all reasonable travel as the needs of the Employer’s
business may require.  Executive shall be
based in, or within 50 miles of, Manhattan.

 

 

3.             Compensation
and Benefits.  In
consideration of Executive’s services hereunder, the Employer shall compensate
Executive as provided in this Agreement, and the Employer shall have the
obligations as set forth herein.

 

(a)           Base Salary.  The Employer shall pay Executive a minimum
annual salary at the rate of $225,000 per annum during the Employment Period (“Base
Salary”).  Base Salary shall be payable
bi-weekly in accordance with the Employer’s normal business practices and shall
be reviewed by the Employer at least annually.

 

Incentive
Compensation Bonuses.  In addition
to Base Salary, during the Employment Period, Executive shall be eligible for
and shall receive from the Employer such discretionary annual bonuses as the
Employer, in its sole discretion, may deem appropriate to reward Executive for
job performance.  The target
discretionary annual bonus for 2009 shall be at least $200,000; provided that
the actual bonus paid shall be determined by the Employer, in its sole
discretion, based on such factors as it deems relevant.  Any bonuses awarded for a fiscal year shall
be paid after the end of such fiscal year and on or before the 15th day of the third month of the following fiscal
year (e.g., a bonus for 2009 will be paid sometime between January 1, 2010
and March 15, 2010).

 

(b)           Expenses.  Executive shall be reimbursed for all
reasonable business related expenses incurred by Executive at the request of or
on behalf of the Employer, provided that such expenses are incurred and
accounted for in accordance with the policies and procedures established by the
Employer.  Any expenses incurred during
the Employment Period but not reimbursed by the Employer by the end of the
Employment Period, shall remain the obligation of the Employer to so reimburse
Executive.

 

(c)           Health and
Welfare Benefit Plans. 
During the Employment Period, Executive and Executive’s immediate family
shall be entitled to participate in such health and welfare benefit plans as
the Employer shall maintain from time to time for the benefit of senior
executive officers of the Employer and their families, on the terms and subject
to the conditions set forth in such plan. 
Nothing in this Section shall limit the Employer’s right to change
or modify or terminate any benefit plan or program as it sees fit from time to
time in the normal course of business so long as it does so for all senior
executives of the Employer.

 

(d)           Vacations.  Executive shall be entitled to paid vacations
in accordance with the then regular procedures of the Employer governing senior
executive officers, except that Executive shall be credited with a minimum of
20 vacation days per calendar year, pro-rated for any partial year.  The Employer will pay Executive for unused
accrued vacation upon termination of his employment.

 

(e)           Other Benefits.  During the Employment Period, the Employer
shall provide to Executive such other benefits as are generally made available
to other senior executives of the Employer;
provided that it is acknowledged that the
Employer’s Chief Executive Officer and President may be provided with
additional benefits not made available to Executive.

 

4.             Indemnification
and Liability Insurance.  The
Employer agrees to indemnify Executive to the full extent permitted by
applicable law, as the same exists and may hereafter be amended, from and
against any and all losses, damages, claims, liabilities and expenses asserted
against, or incurred or suffered by, Executive (including the costs and
expenses of legal counsel retained by the Employer to defend Executive and
judgments, fines and amounts paid in settlement actually and reasonably
incurred by or imposed on such indemnified party) with respect to any action,
suit or proceeding, whether civil, 

 

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criminal administrative or investigative (a “Proceeding”)
in which Executive is made a party or threatened to be made a party or is
otherwise involved, either with regard to his entering into this Agreement with
the Employer or in his capacity as an officer or director, or former officer or
director of the Employer, Gramercy or any affiliate thereof for which he may
serve in such capacity.  The Employer
also agrees to secure promptly and maintain officers and directors liability
insurance providing coverage for Executive, with such coverage to be reasonably
comparable to the coverage provided for the other senior executives of Employer
and Gramercy.  The provisions of this Section 4
shall remain in effect after this Agreement is terminated irrespective of the
reasons for termination.

 

5.             Employer’s
Policies.  Executive
agrees to observe and comply with the reasonable written rules and
regulations of the Employer regarding the performance of his duties and to
carry out and perform orders, directions and policies communicated to him from
time to time by the Employer, so long as same are otherwise consistent with
this Agreement.

 

6.             Termination.  Executive’s employment hereunder may be
terminated under the following circumstances:

 

(a)           Termination by
the Employer.

 

(i)            Death.  Executive’s employment hereunder shall
terminate upon his death.

 

(ii)           Disability.  If, as a result of Executive’s incapacity due
to physical or mental illness or disability, Executive shall have been
incapable of performing his duties hereunder even with a reasonable
accommodation on a full-time basis for the entire period of four consecutive
months or any 120 days in a 180-day period, and within 30 days after written
Notice of Termination (as defined in Section 6(d)) is given he shall not
have returned to the performance of Executive’s duties hereunder on a full-time
basis, the Employer may terminate Executive’s employment hereunder.

 

(iii)          Cause.  The Employer may terminate Executive’s
employment hereunder for Cause.  For
purposes of this Agreement, “Cause” shall mean Executive’s:  (A) engaging in conduct which is a
felony; (B) material breach of any of his obligations under Sections 8(a) through
8(e) of this Agreement; (C) willful misconduct of a material nature
or gross negligence with regard to the Employer or Gramercy or any of their
affiliates; (D) material fraud with regard to the Employer or Gramercy or any
of their affiliates; (E) willful or material violation of any reasonable
written rule, regulation or policy of the Employer or Gramercy applicable to
senior executives unless such a violation is cured within 30 days after written
notice of such violation by the Employer or Gramercy; or (F) failure to
competently perform his duties which failure is not cured within 30 days after
receiving notice from the Employer specifically identifying the manner in which
Executive has failed to perform (it being understood that, for this purpose,
the manner and level of Executive’s performance shall not be determined based
on the financial performance (including without limitation the performance of
the stock of Gramercy) of the Employer or Gramercy).

 

(iv)          Without Cause.  Executive’s employment hereunder may be
terminated by the Employer at any time without Cause (as defined in Section 6(a)(iii) above),
subject only to the severance provisions specifically set forth in Section 7.

 

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(b)           Termination by
Executive.

 

(i)            Disability.  Executive may terminate his employment
hereunder for Disability within the meaning of Section 6(a)(ii) above.

 

(ii)           With Good
Reason.  Executive’s employment
hereunder may be terminated by Executive with Good Reason effective immediately
by written notice to the Employer providing at least ten (10) days notice
prior to such termination. For purposes of this Agreement, termination with “Good
Reason” shall mean termination following:

 

(A)            a material
change in Executive’s duties, responsibilities, status or positions with the
Employer that does not represent a promotion from or maintaining of Executive’s
duties, responsibilities, status or positions (which material change, so long
as Executive is the Chief Financial Officer of Gramercy, shall include the
appointment of another person as co-Chief Financial Officer of Gramercy),
except in connection with the (a) termination of Executive’s employment
for Cause, disability, retirement or death or (b) the appointment by
Gramercy of a person other than the Executive as Gramercy’s Principal Financial
Officer for SEC reporting purposes so long as such person has a title other
than Chief Financial Officer for corporate purposes;

 

(B)             a failure by
the Employer to pay compensation when due in accordance with the provisions of Section 3,
which failure has not been cured within 10 business days after the notice of
the failure (specifying the same) has been given by Executive to the Employer;

 

(C)             a material
breach by the Employer of any provision of this Agreement, which breach has not
been cured within 30 days after notice of noncompliance (specifying the nature
of the noncompliance) has been given by Executive to the Employer;

 

(D)            the Employer
requiring Executive to be based in an office more than 50 miles outside of
Manhattan;

 

(E)             a reduction by
the Employer in Executive’s Base Salary to less than the minimum Base Salary
set forth in Section 3(a);

 

(F)             the failure by
the Employer to continue in effect an equity award program or other
substantially similar program under which Executive is eligible to receive
awards;

 

(G)             a material
reduction in Executive’s benefits under any benefit plan (other than an equity
award program) compared to those currently received (other than in connection
with and proportionate to the reduction of the benefits received by all or most
senior executives or undertaken in order to maintain such plan in compliance
with any federal, state or local law or regulation governing benefits plans, including,
but not limited to, the Employee Retirement Income Security Act of 1974); or

 

(H)            the failure by
the Employer to obtain from any successor to the Employer an agreement to be
bound by this Agreement pursuant to Section 15 hereof, which has not been
cured within 30 days after the notice of the failure (specifying the same) has
been given by Executive to the Employer.

 

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(iii)          Without Good
Reason.  Executive shall have the right
to terminate his employment hereunder without Good Reason, subject to the terms
and conditions of this Agreement.

 

(c)           Definitions.  The following terms shall be defined as set
forth below.

 

(i)            A “Change-in-Control”
shall be deemed to have occurred if:

 

(A)            any “person,”
including a “group” (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act, but excluding the Employer, SL Green Realty Corp. (or a
successor thereto that directly or indirectly acquires all or substantially all
of the assets of SL Green Realty Corp., whether by merger, consolidation, asset
acquisition or otherwise) (“SL Green”), any entity controlling, controlled by
or under common control with the Employer, or SL Green, any trustee, fiduciary
or other person or entity holding securities under any employee benefit plan or
trust of the Employer, Gramercy, SL Green or any such entity, and Executive and
any “group” (as such term is used in Section 13(d)(3) of the Exchange
Act) of which Executive is a member), is or becomes the “beneficial owner” (as
defined in Rule 13(d)(3) under the Exchange Act), directly or
indirectly, of securities of Gramercy representing 25% or more of either (1) the
combined voting power of Gramercy’s then outstanding securities or (2) the
then outstanding common stock (or other similar equity interest, in the case of
a company other than a corporation) of Gramercy (in either such case other than
as a result of an acquisition of securities directly from Gramercy); or

 

(B)             any
consolidation or merger of Gramercy where the shareholders of Gramercy, as
applicable, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as such term
is defied in Rule 13d-3 under the Exchange Act), directly or indirectly,
shares representing in the aggregate 50% or more of the combined voting power
of the securities of the corporation issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if any); or

 

(C)             there shall
occur (1) any sale, lease, exchange or other transfer (in one transaction
or a series of transactions contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of Gramercy, other than a sale
or disposition by Gramercy of all or substantially all of Gramercy’s assets to
an entity at least 50% of the combined voting power of the voting securities of
which are owned by “persons” (as defined above) in substantially the same
proportion as their ownership of Gramercy, as applicable, immediately prior to
such sale, or (2) the approval by shareholders of Gramercy, as applicable,
of any plan or proposal for the liquidation or dissolution of Gramercy, as
applicable; or

 

(D)            the members of the Board of Directors (the “Board”)
of Gramercy (the “Directors”) at the beginning of any consecutive
24-calendar-month period (the “Incumbent Directors”) cease for any reason other
than due to death to constitute at least a majority of the members of the
Board; provided that any Director whose election, or nomination for election by
Gramercy’s shareholders was approved or ratified by a vote of at least a
majority of the members of the Board then still in office who were members of
the Board at the 

 

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beginning of such 24-calendar-month period shall be
deemed to be an Incumbent Director.

 

(d)           Notice of
Termination.  Any
termination of Executive’s employment by the Employer or by Executive (other
than on account of death) shall be communicated by written Notice of Termination
to the other party hereto in accordance with Section 11 of this
Agreement.  For purposes of this
Agreement, a “Notice of Termination” shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon and, as applicable,
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive’s employment under the provision
so indicated.  Executive’s employment
shall terminate as of the effective date set forth in the Notice of Termination
(the “Termination Date”); provided that, (i) if the Notice of Termination
is given by the Employer, the Termination Date shall not be more than thirty
(30) days after the date of the Notice of Termination and (ii) if the
Notice of Termination is given by the Executive, the Termination Date shall not
be earlier than the later of (x) the second business day following the date on
which Gramercy files its Form 10-K or Form 10-Q, as applicable, for
the calendar quarter in which the Notice of Termination is given or (y) five
(5) weeks following the date of the Notice of Termination.  For avoidance of doubt, a notice of
non-renewal pursuant to Section 1 shall not be considered a Notice of
Termination.  Until the Termination Date,
the Executive and the Employer shall continue to perform their respective
duties and obligations in accordance with the terms and conditions of this
Agreement.

 

(e)           Resignation
Upon Termination.  In the
event that Executive’s employment with the Employer is terminated, Executive (i) shall,
within five business days of receipt of a written request for resignation,
resign all positions (including, without limitation, as officer, employee,
director and member of any committee) with the Employer and Gramercy and their
subsidiaries and affiliates, and (ii) shall provide such written
confirmation thereof as may be reasonably required by the Employer.  In the event that Executive’s service with
Gramercy is terminated other than as contemplated by the foregoing sentence,
Executive (i) shall, within five business days of receipt of a written
request for resignation, resign all other positions (including, without
limitation, as officer, employee, director and member of any committee) with
Gramercy and its subsidiaries, and (ii) shall provide such written
confirmation thereof as may be reasonably required by the Employer.

 

7.             Compensation
Upon Termination; Change-in-Control.

 

(a)           Termination By the Employer Without Cause or By
Executive With Good Reason.  If (i) Executive is terminated by the
Employer without Cause pursuant to Section 6(a)(iv) above, or (ii) Executive
shall terminate his employment hereunder with Good Reason pursuant to Section (6)(b)(ii) above,
then the Employment Period shall terminate as of the Termination Date and
Executive shall be entitled to the following payments and benefits, subject to
Executive’s execution of a mutual release agreement in form and substance
satisfactory to the Employer, whereby, in general, each party releases the
other from all claims such party may have against the other party (other than (A) claims against the Employer relating
to the Employer’s obligations under this Agreement and certain other specified
agreements arising in connection with or after Executive’s termination,
including, without limitation, the Employer’s obligations hereunder to provide
severance payments and benefits and accelerated vesting of equity awards and (B) claims
against Executive relating to or arising out of any act of fraud, intentional
misappropriation of funds, embezzlement or any other action with regard to the
Employer or any of its affiliated companies that constitutes a felony under any
federal or state statute committed or perpetrated by Executive during the
course of Executive’s employment with the Employer or its affiliates, in any
event, that would have a material adverse effect on the Employer, or any other 

 

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claims that may not be released by the
Employer under applicable law) (the “Release Agreement”), and the
effectiveness thereof on or within 30 days after the Termination Date (with the
date of such effectiveness being referred to herein as the “Release
Effectiveness Date”):

 

(i)            Executive shall
receive any earned and accrued but unpaid Base Salary (at the rate in effect on
the date of his termination) on the first regular payroll payment date for the
period in which the Termination Date occurs, and shall continue to receive Base
Salary (at the rate in effect on the date of his termination) for a period of
six (6) months following the Termination Date on the same periodic payment
dates as payment would have been made to Executive had Executive not been
terminated; provided that no payments of continued Base Salary will be made
until the first regular payroll payment date that commences 30 days after the
Termination Date, provided that the Release Effectiveness Date has occurred
(with the first such payment to include a catch up payment covering amounts
that would otherwise have been paid prior to such date but for the application
of this provision).

 

(ii)           the Employer
shall pay Executive annual performance bonuses as follows: (A) a prorated
annual performance bonus (the “Prorated Annual Bonus”) equal to (x) Executive’s
annual performance bonus for the most recent prior fiscal year for which the
amount of such bonus had been determined or, if the Termination Date occurs
prior to Executive’s annual performance bonus for 2009 having been determined,
the amount of $200,000 (with the applicable amount being referred to herein as
the “Prior Annual Bonus”) multiplied by (y) a fraction, the numerator of
which is the number of days in the fiscal year in which Executive’s employment
terminates through the Termination Date and the denominator of which is 365, and
(B) a further performance bonus (the “Additional 6-Month Bonus”) for the 6
months following the Termination Date equal to one-half of the Prior Annual
Bonus (or, if the Termination Date occurs prior to the Executive’s annual
performance bonus for 2009 having been determined, the amount of $100,000);
provided that the amounts set forth in (A) and (B) above shall be
reduced by the amount of any annual performance bonus, or advance thereof,
previously paid for the periods set forth in (A) and (B) above.  Such payments shall be made on the later of (A) the
dates the Employer would have otherwise paid such annual performance bonuses to
Executive under the terms of this Agreement if Executive had remained employed
by the Employer or (B) the 30th day after the Termination Date.

 

(iii)          Executive shall
continue to receive from the Employer all benefits described in Section 3(d) existing
on the Termination Date for a period of six (6) months after the
Termination Date, subject to the terms and conditions upon which such benefits
may be offered to continuing senior executives from time to time.  For purposes of the application of such
benefits, Executive shall be treated as if he had remained in the employ of the
Employer with a Base Salary at the rate in effect on the date of
termination.  Notwithstanding the
foregoing, (A) nothing in this Section 7(a)(iii) shall restrict
the ability of the Employer to amend or terminate the plans and programs
governing the benefits described in Section 3(d) from time to time in
its sole discretion, and (B) the Employer shall in no event be required to
provide any benefits otherwise required by this Section 7(a)(iii) after
such time as Executive becomes entitled to receive benefits of the same type
from another employer or recipient of Executive’s services (such entitlement
being determined without regard to any individual waivers or other similar
arrangements).

 

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(iv)          Executive shall
be credited with twelve (12) months after termination under any provisions
governing restricted stock, options or other equity-based awards granted to
Executive by the Employer relating to the vesting or initial exercisability
thereof; provided that any unvested or unexercisable restricted stock, options
or other equity based awards that were granted as payment of a cash bonus, as
determined at the time of grant by the Employer, in its sole discretion, shall
become fully vested and exercisable on the date of Executive’s
termination.  For purposes of determining
the effect of such twelve (12) months of credit with respect to any
performance-based vesting criteria, (A) if such termination occurs less
than six months after the beginning of a performance period, then
performance-based vesting shall be based on performance during the prior
performance period and (B) if such termination occurs more than six months
after the beginning of a performance period, then performance-based vesting
shall be based on performance during such interim period through the most
recently completed fiscal quarter. 
Furthermore, upon such termination, any then vested unexercised stock
options granted to Executive by the Employer shall remain exercisable until the
second January 1 to follow the Termination Date or, if earlier, the
expiration of the initial applicable term stated at the time of the grant.  The provisions of this Section are
subject to Section 7(e) below.

 

(v)           In the event
such termination occurs in connection with or within eighteen (18) months after
a Change-in-Control, then Executive will be entitled to the payments and
benefits provided under the foregoing Sections 7(a)(i) — (iv), except that
the references to “6 months” in the salary and bonus continuation provisions
set forth in Section 7(a)(i) and (ii) above will be replaced
with “12 months.”

 

Other
than as may be provided under Section 4 or as expressly provided in this Section 7(a),
the Employer shall have no further obligations hereunder following such
termination.

 

(b)           Termination By
the Employer For Cause or By Executive Without Good Reason.  If (i) Executive is terminated by the
Employer for Cause pursuant to Section 6(a)(iii) above, or (ii) Executive
voluntarily terminates his employment hereunder without Good Reason pursuant to
Section 6(b)(iii) above, then the Employment Period shall terminate
as of the Termination Date and Executive shall be entitled to receive any
earned and accrued but unpaid Base Salary (at the rate in effect on the date of
his termination) on the first regular payroll payment date for the period in
which the Termination Date occurs, but, for avoidance of doubt, shall not be
entitled to any annual cash bonus for the year in which the termination occurs,
severance payment, continuation of benefits or acceleration of vesting or
extension of exercise period of any equity awards, except as otherwise provided
in the documentation applicable to such equity awards.  Other than as may be provided under Section 4
or as expressly provided in this Section 7(b), the Employer shall have no
further obligations hereunder following such termination.

 

(c)           Termination by
Reason of Death.  If
Executive’s employment terminates due to his death, Executive’s estate (or a
beneficiary designated by Executive in writing prior to his death) shall be
entitled to the following payments and benefits:

 

(i)            On the first
regular payroll payment date for the period in which the Termination Date
occurs, Executive’s estate (or a beneficiary designated by Executive in writing
prior to his death) shall receive from the Employer an amount equal to (A) any
earned and accrued but unpaid Base Salary, and (B) the Prorated Annual
Bonus, less the amount of any annual performance bonus, or advance thereof,
previously paid for the period associated with the Prorated Annual Bonus.

 

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(ii)           Executive shall
be credited with twelve (12) months after termination under any provisions
governing restricted stock, options or other equity-based awards granted to
Executive by the Employer relating to the vesting or initial exercisability
thereof; provided that any unvested or unexercisable restricted stock, options
or other equity-based awards that were granted as payment of a cash bonus, as
determined at the time of grant by the Employer, in its sole discretion, shall
become fully vested and exercisable on the date of Executive’s death.  For purposes of determining the effect of
such twelve (12) months of credit with respect to any performance-based vesting
criteria, (A) if such termination occurs less than six months after the
beginning of a performance period, then performance-based vesting shall be
based on performance during the prior performance period and (B) if such
termination occurs more than six months after the beginning of a performance
period, then performance-based vesting shall be based on performance during
such interim period through the most recently completed fiscal quarter.  Furthermore, upon such death, any then vested
unexercised stock options granted to Executive by the Employer shall remain
vested and exercisable until the earlier of (A) the date on which the term
of such stock options otherwise would have expired, or (B) the second January 1
after the date of Executive’s termination due to his death.  The provisions of this Section are
subject to Section 7(e) below.

 

Other than as may be provided under Section 4 or as expressly
provided in this Section 7(c), the Employer shall have no further
obligations hereunder following such termination.

 

(d)           Termination by
Reason of Disability.  In the
event that Executive’s employment terminates due to his disability as defined
in Section 6(a)(ii) above, Executive shall be entitled to the
following payments and benefits, subject to Executive’s execution of the
Release Agreement and the effectiveness thereof on or within 30 days after the
Termination Date:

 

(i)            On the first
regular payroll payment date for the period in which the Termination Date
occurs, Executive shall receive from the Employer any earned and accrued but
unpaid Base Salary.  Executive shall also
receive Base Salary (at the rate in effect on the date of his termination) for
a period of six (6) months following the Termination Date on the same
periodic payment dates as payment would have been made to Executive had
Executive not been terminated; provided that no payments of continued Base
Salary will be made until the first regular payroll payment date that commences
30 days after the Termination Date, provided that the Release Effectiveness
Date has occurred (with the first such payment to include a catch-up payment
covering amounts that would otherwise have been paid prior to such date but for
the application of this provision).  The
Employer shall also pay Executive: (A) the Prorated Annual Bonus and (B) the
Additional 6-Month Bonus; provided that the Prorated Annual Bonus and
Additional 6-Month Bonus shall be reduced by the amount of any annual
performance bonus, or advance thereof, previously paid for the periods
associated with the Prorated Annual Bonus and the Additional 6-Month
Bonus.  The Employer shall make such
payments of the Prorated Annual Bonus, and the Additional 6-Month Bonus on the
later of (x) the dates the Employer would have otherwise paid such annual
performance bonuses to Executive under the terms of this Agreement if Executive
had remained employed by the Employer or (y) the 30th day after the Termination Date.

 

(ii)           Executive shall
be credited with twelve (12) months after termination under any provisions
governing restricted stock, options or other equity-based awards granted to
Executive by the Employer relating to the vesting or initial exercisability
thereof; provided that any unvested or unexercisable restricted stock, options
or other 

 

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equity-based
awards that were granted as payment of a cash bonus, as determined at the time
of grant by the Employer, in its sole discretion, shall become fully vested and
exercisable on the Release Effectiveness Date. 
For purposes of determining the effect of such twelve (12) months of
credit with respect to any performance-based vesting criteria, (A) if such
termination occurs less than six months after the beginning of a performance
period, then performance-based vesting shall be based on performance during the
prior performance period and (B) if such termination occurs more than six
months after the beginning of a performance period, then performance-based
vesting shall be based on performance during such interim period through the
most recently completed fiscal quarter. 
Any then vested unexercised stock options granted to Executive by the
Employer shall remain vested and exercisable until the earlier of (A) the
date on which the term of such stock options otherwise would have expired, or (B) the
second January 1 after the Termination Date.  The provisions of this Section are
subject to Section 7(e) below.

 

(iii)          Executive shall continue to receive from the Employer all benefits described in Section 3(d) existing
on the Termination Date for a period of six (6) months after the
Termination Date, subject to the terms and conditions upon which such benefits
may be offered to continuing senior executives from time to time.  For purposes of the application of such
benefits, Executive shall be treated as if he had remained in the employ of the
Employer with a Base Salary at the rate in effect on the date of
termination.  Notwithstanding the
foregoing, (A) nothing in this Section 7(d)(iii) shall restrict
the ability of the Employer to amend or terminate the plans and programs
governing the benefits described in Section 3(d) from time to time in
its sole discretion so long as it does so for all senior executives of the
Employer, and (B) the Employer shall in no event be required to provide
any benefits otherwise required by this Section 7(d)(iii) after such
time as Executive becomes entitled to receive benefits of the same type from
another employer or recipient of Executive’s services (such entitlement being
determined without regard to any individual waivers or other similar
arrangements).

 

Other
than as may be provided under Section 4 or as expressly provided in this Section 7(d),
the Employer shall have no further obligations hereunder following such
termination.

 

(e)           Gramercy Equity
Awards.  Notwithstanding anything
herein to the contrary, the provisions of this Section 7 related to the
acceleration of vesting and extension of the period within which to exercise
vested stock options, shall not be deemed to apply to any equity-based awards
of Gramercy, GKK Capital LP or any of their subsidiaries made to Executive (the
“Gramercy Equity Awards”) that may be deemed to have been first granted to the
Employer and then granted by the Employer to Executive.  Any acceleration of the vesting of the
Gramercy Equity Awards will be governed by the terms of such awards and, unless
terminated, that certain Severance Agreement entered into by Gramercy and
Executive as of the date hereof, as amended or superseded from time to time.

 

8.             Confidentiality;
Prohibited Activities. 
Executive and the Employer recognize that due to the nature of Executive’s
employment and relationship with the Employer, Executive has access to and
develops confidential business information, proprietary information, and trade
secrets relating to the business and operations of the Employer.  Executive acknowledges that (i) such
information is valuable to the business of the Employer, (ii) disclosure
to, or use for the benefit of, any person or entity other than the Employer,
would cause irreparable damage to the Employer, (iii) the principal
business of the Employer as of the date hereof is managing the business and
affairs of Gramercy, which is in the business among other things, (A) the
acquisition, development, asset management and servicing of commercial 

 

10

 

real estate property and (B) the origination
and acquisition of real estate related loans and securities, and financing such
investments, including without limitation the origination of first-mortgage and
mezzanine debt or preferred equity financing for real estate projects
throughout the United States (the business of the Employer, and of Gramercy,
both as of the date hereof and from time to time hereafter, are collectively
referred to as the “Business”), (iv) the Employer is one of the limited
number of persons who have developed a business such as the Business, and (v) the
Business is national in scope.  Executive
further acknowledges that his duties for the Employer include the duty to
develop and maintain client, customer, employee, and other business relationships
on behalf of the Employer; and that access to and development of those close
business relationships for the Employer render his services special, unique and
extraordinary.  In recognition that the
goodwill and business relationships described herein are valuable to the
Employer, and that loss of or damage to those relationships would destroy or
diminish the value of the Employer, and in consideration of the compensation
(including severance) arrangements hereunder, and other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged by
Executive, Executive agrees as follows:

 

(a)           Confidentiality.  During the term of this Agreement (including
any renewals), and at all times thereafter, Executive shall maintain the
confidentiality of all confidential or proprietary information of the Employer
or Gramercy (“Confidential Information”), and, except in furtherance of the
business of the Employer or as specifically required by law or by court order,
he shall not directly or indirectly disclose any such information to any person
or entity; nor shall he use Confidential Information for any purpose except for
the benefit of the Employer.  For
purposes of this Agreement, “Confidential Information” includes, without
limitation:  client or customer lists,
identities, contacts, business and financial information (excluding those of
Executive prior to employment with the Employer); investment strategies;
pricing information or policies, fees or commission arrangements of the
Employer or Gramercy; marketing plans, projections, presentations or strategies
of the Employer or Gramercy; financial and budget information of the Employer
or Gramercy; new personnel acquisition plans; and all other business related
information which has not been publicly disclosed by the Employer or
Gramercy.  This restriction shall apply
regardless of whether such Confidential Information is in written, graphic,
recorded, photographic, data or any machine readable form or is orally conveyed
to, or memorized by, Executive.

 

(b)           Prohibited
Activities.  Because
Executive’s services to the Employer are essential and because Executive has
access to the Employer’s Confidential Information, Executive covenants and
agrees that:

 

(i)            During the
Employment Period, and for the six-month period following the date that
Executive is no longer employed by the Employer, Executive will not, anywhere in the United States, without the
prior written consent of the Employer, directly or indirectly (individually, or
through or on behalf of another entity as owner, partner, agent, employee,
consultant, or in any other capacity), engage, participate or assist, as an
owner, partner, employee, consultant, director, officer, trustee or agent, in
any element of the Business, provided, however, that (A) such six-month
period shall only be three months if (i) Executive is no longer employed
by the Employer following a non-renewal of this Agreement by the Employer or (ii) in
the event Executive’s employment is terminated for Cause based on conduct or alleged
conduct that was not related to the Business of the Employer, (B) such
six-month period shall only be three months in the event Executive terminates
his employment within sixty (60) days after the payment of a discretionary
bonus for any year in an amount less than $200,000 and (C) such six-month
period shall not apply in the event Executive terminates his employment without
Good Reason within sixty (60) days after (i) Gramercy files, in any court
or agency pursuant to 

 

11

 

any
statute or regulation of any state or country, a petition in bankruptcy or
insolvency or for reorganization or for an arrangement or for the appointment
of a receiver or trustee of Gramercy or of its assets, or (ii) the 90th day after Gramercy is served with an
involuntary petition in bankruptcy or seeking reorganization, liquidation,
dissolution, winding-up arrangement, composition or readjustment of its debts
or any other relief under any bankruptcy, insolvency, reorganization or other
similar act or law of any jurisdiction now or hereafter in effect, if such
petition is not dismissed on or before such date; with this subparagraph (i) being
subject, however, to Section 8(c) below; and

 

(ii)           Executive will
not, without the prior written consent of the Employer, directly or indirectly
(individually, or through or on behalf of another entity as owner, partner,
agent, employee, consultant, or in any other capacity), during the Employment
Period and (A) during the two-year period following the termination of
Executive by either party for any reason (including the expiration of the term
of the Agreement) solicit, encourage, or engage in any activity to induce any
employee of the Employer or Gramercy to terminate employment with the Employer
or Gramercy, or to become employed by, or to enter into a business relationship
with, any other person or entity, or (B) during the one-year period
following such termination, engage in any activity intentionally to interfere
with, disrupt or damage the relationship of the Employer or Gramercy with any
existing borrower, tenant, client or, supplier, or disrupt or damage any other
existing business relationship of the Employer or Gramercy.  For purposes of this subsection, the term “employee”
means any individual who is an employee of or consultant to the Employer or
Gramercy (or any affiliate of either) during the six-month period prior to
Executive’s last day of employment.

 

(c)           Other
Investments/Activities. 
Notwithstanding anything contained herein to the contrary, Executive is
not prohibited by this Section 8 from making investments solely for
investment purposes and without participating in the business in which the
investments are made, in any entity that engages, directly or indirectly, in
the acquisition, development, construction, operation, management, financing or
leasing of office real estate properties, regardless of where they are located,
if (x) Executive’s aggregate investment in each such entity constitutes
less than one percent of the equity ownership of such entity, (y) the
investment in the entity is in securities traded on any national securities
exchange, and (z) Executive is not a controlling person of, or a member of
a group which controls, such entity; or (iii) if (A) except with the prior written consent of the Employer,
Executive has less than a 25% interest in the investment in question, (B) except
with the prior written consent of the Employer, Executive does not have the
role of a general partner or managing member, or any similar role, (C) the
investment is not an appropriate investment opportunity for the Employer, and (D) the
investment activity is not directly competitive with the businesses of the
Employer.

 

(d)           Employer
Property.  Executive
acknowledges that all originals and copies of materials, records and documents
generated by him or coming into his possession during his employment by the
Employer are the sole property of the Employer (the “Employer Property”).  During his employment, and at all times
thereafter, Executive shall not remove, or cause to be removed, from the
premises of the Employer, copies of any record, file, memorandum, document,
computer related information or equipment, or any other item relating to the
business of the Employer, except in furtherance of his duties under this
Agreement.  When Executive terminates his
employment with the Employer, or upon request of the Employer at any time,
Executive shall promptly deliver to the Employer all originals and copies of
the Employer Property in his possession or control and shall not retain any
originals or copies in any form.  The
Employer Property excludes any personal property of Executive.

 

12

 

(e)           No
Disparagement.  For one
year following termination of Executive’s employment for any reason, Executive
shall not intentionally disclose or cause to be disclosed any negative, adverse
or derogatory comments or information about (i) the Employer, Gramercy and
their parent, affiliates or subsidiaries, if any; (ii) any product or
service provided by the Employer, Gramercy and their parent, affiliates or
subsidiaries, if any; or (iii) the Employer’s, Gramercy’s and their
parents’, affiliates’ or subsidiaries’ prospects for the future.  For one year following termination of
Executive’s employment for any reason, the Employer shall not disclose or cause
to be disclosed any negative, adverse or derogatory comments or information
about Executive.  Nothing in this Section shall
prohibit either the Employer or Executive from testifying truthfully in any
legal or administrative proceeding.

 

(f)            Remedies.  Executive declares that the foregoing
limitations in Sections 8(a) through 8(e) above are reasonable and
necessary for the adequate protection of the business and the goodwill of the
Employer.  If any restriction contained
in this Section 8 shall be deemed to be invalid, illegal or unenforceable
by reason of the extent, duration or scope thereof, or otherwise, then the
court making such determination shall have the right to reduce such extent,
duration, scope, or other provisions hereof to make the restriction consistent
with applicable law, and in its reduced form such restriction shall then be
enforceable in the manner contemplated hereby. 
In the event that Executive breaches any of the promises contained in
this Section 8, Executive acknowledges that the Employer’s remedy at law
for damages will be inadequate and that the Employer will be entitled to
specific performance, a temporary restraining order or preliminary injunction
to prevent Executive’s prospective or continuing breach and to maintain the
status quo.  The existence of this right
to injunctive relief, or other equitable relief, or the Employer’s exercise of
any of these rights, shall not limit any other rights or remedies the Employer
may have in law or in equity, including, without limitation, the right to
arbitration contained in Section 9 hereof and the right to compensatory
and monetary damages.  Executive hereby
agrees to waive his right to a jury trial with respect to any action commenced
to enforce the terms of this Agreement.  Executive shall have remedies comparable to those
of the Employer as set forth above in this Section 8(f) if the
Employer breaches Section 8(e).

 

(g)           Transition.  Regardless of the reason for his departure
from the Employer, Executive agrees that at the Employer’s sole costs and
expense, for a period of not more than 30 days after termination of Executive,
he shall take all steps reasonably requested by the Employer to effect a
successful transition of client and customer relationships to the person or
persons designated by the Employer, subject to Executive’s obligations to his
new employer.

 

(h)           Cooperation
with Respect to Litigation.  During the Employment Period and at all times
thereafter, Executive agrees to give prompt written notice to the Employer of
any claim relating to the Employer and to cooperate fully, in good faith and to
the best of his ability with the Employer in connection with any and all
pending, potential or future claims, investigations or actions which directly
or indirectly relate to any action, event or activity about which Executive may
have knowledge in connection with or as a result of his employment by the
Employer hereunder.  Such cooperation
will include all assistance that the Employer, its counsel or its
representatives may reasonably request, including reviewing documents, meeting
with counsel, providing factual information and material, and appearing or
testifying as a witness; provided, however, that the Employer will reimburse
Executive for all reasonable expenses, including travel, lodging and meals,
incurred by him in fulfilling his obligations under this Section 8(h) and,
except as may be required by law or by court order, should Executive then be employed
by an entity other than the Employer, such cooperation will not materially
interfere with Executive’s then current employment.

 

13

 

(i)            Survival.  The provisions of this Section 8 shall
survive termination of Executive’s employment any other provisions relating to
the enforcement thereof.

 

9.             Arbitration.  Any controversy or claim arising out of or
relating to this Agreement or the breach of this Agreement (other than a
controversy or claim arising under Section 8, to the extent necessary for
the Employer (or its affiliates, where applicable) to avail itself of the
rights and remedies referred to in Section 8(f)) that is not resolved by
Executive and the Employer (or its affiliates, where applicable) shall be
submitted to arbitration in New York, New York in accordance with New York law
and the procedures of the American Arbitration Association.  The determination of the arbitrator(s) shall
be conclusive and binding on the Employer (or its affiliates, where applicable)
and Executive and judgment may be entered on the arbitrator(s)’ award in any
court having jurisdiction.

 

10.           Conflicting
Agreements.  Executive
hereby represents and warrants that the execution of this Agreement and the
performance of his obligations hereunder will not breach or be in conflict with
any other agreement to which he is a party or is bound, and that he is not now
subject to any covenants against competition or similar covenants which would
affect the performance of his obligations hereunder.

 

11.           Notices.  All notices or other communications required
or permitted to be given hereunder shall be in writing and shall be delivered
by hand and or sent by prepaid telex, cable or other electronic devices or
sent, postage prepaid, by registered or certified mail or telecopy or overnight
courier service and shall be deemed given when so delivered by hand, telexed,
cabled or telecopied, or if mailed, three days after mailing (one business day
in the case of express mail or overnight courier service), as follows:

 

(a)           if to
Executive:

 

Jon
W. Clark, at the address shown on the execution page hereof.

 

(b)           if to the
Employer:

 

GKK Manager LLC

420 Lexington Avenue

New York, New York 10170

Attn: Corporate Secretary

 

and:

 

Gramercy
Capital Corp.

420
Lexington Avenue

New
York, New York  10170

Attention:  General Counsel

 

or
such other address as either party may from time to time specify by written
notice to the other party hereto.

 

12.           Amendments.  No amendment, modification or waiver in
respect of this Agreement shall be effective unless it shall be in writing and
signed by the party against whom such amendment, modification or waiver is
sought.

 

14

 

13.           Severability.  If any provision of this Agreement (or any
portion thereof) or the application of any such provision (or any portion
thereof) to any person or circumstances shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof (or the remaining portion hereof) or the application of such provision
to any other persons or circumstances.

 

14.           Withholding.  The Employer shall be entitled to withhold
from any payments or deemed payments any amount of tax withholding it
determines to be required by law.

 

15.           Successors and
Assigns.  This Agreement shall be
binding upon and inure to the benefit of both parties and their respective
successors and assigns, including any corporation with which or into which the
Employer may be merged or which may succeed to its assets or business,
provided, however, that the obligations of Executive are personal and shall not
be assigned by him.  This Agreement shall
inure to the benefit of and be enforceable by Executive’s personal and legal
representatives, executors, administrators, assigns, heirs, distributees,
devisees and legatees.  It is expressly
acknowledged and agreed that (i) the Employer may assign this Agreement in
its entirety, and its rights under this Agreement, to Gramercy or one of
Gramercy’s subsidiaries; and (ii) at the request of the Employer,
Executive shall execute an employment agreement with Gramercy or one of
Gramercy’s subsidiaries on substantially the same terms as are contained herein
with respect to the Employer.

 

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

 

17.           Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such State, without regard
to the conflicts of law principles of such State.

 

18.           Choice of Venue.  Subject to the provisions of Section 9,
Executive agrees to submit to the jurisdiction of the United States District
Court for the Southern District of New York or the Supreme Court of the State
of New York, New York County, for the purpose of any action to enforce any of
the terms of this Agreement.

 

19.           Section 409A.

 

(a)           Anything in
this Agreement to the contrary notwithstanding, if at the time of Executive’s
separation from service within the meaning of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), the Employer determines that
Executive is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of
the Code, then to the extent any payment or benefit that Executive becomes
entitled to under this Agreement would be considered deferred compensation
subject to the 20 percent additional tax imposed pursuant to Section 409A(a) of
the Code as a result of the application of Section 409A(a)(2)(B)(i) of
the Code, such payment shall not be payable and such benefit shall not be
provided until the date that is the earlier of (A) six months and one day
after Executive’s separation from service, or (B) Executive’s death.  If any such delayed cash payment is otherwise
payable on an installment basis, the first payment shall include a catch-up
payment covering amounts that would otherwise have been paid during the
six-month period but for the application of this provision, and the balance of
the installments shall be payable in accordance with their original
schedule.  Any such delayed cash payment
shall earn interest at a simple annual rate equal to 5% per annum, from the
date such payment would have been made if not for the operation of this Section until
the payment is actually made.

 

15

 

(b)           The parties
intend that this Agreement will be administered in accordance with Section 409A
of the Code.  To the extent that any
provision of this Agreement is ambiguous as to its compliance with Section 409A
of the Code, the provision shall be read in such a manner so that all payments
hereunder comply with Section 409A of the Code.  The parties agree that this Agreement may be
amended, as reasonably requested by either party, and as may be necessary to
fully comply with Section 409A of the Code and all related rules and
regulations in order to preserve the payments and benefits provided hereunder
without additional cost to either party.

 

(c)           The determination
of whether and when a separation from service has occurred shall be made in
accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).

 

(d)           The Employer
makes no representation or warranty and shall have no liability to Executive or
any other person if any provisions of this Agreement are determined to
constitute deferred compensation subject to Section 409A of the Code but
do not satisfy an exemption from, or the conditions of, such Section.

 

20.           Entire
Agreement.  This
Agreement, together with that certain Severance Agreement, of even date
herewith, between Gramercy and Executive, contains the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.  The parties hereto shall
not be liable or bound to any other party in any manner by any representations,
warranties or covenants relating to such subject matter except as specifically
set forth herein.

 

21.           Paragraph
Headings.  Section headings
used in this Agreement are included for convenience of reference only and will
not affect the meaning of any provision of this Agreement.

 

[Remainder of page intentionally
left blank]

 

16

 

IN WITNESS WHEREOF, this Agreement is entered into
as of the date and year first written above, and is being executed on April 27,
2009.

 

 

	
   

  	
   

  	
  GKK
  MANAGER LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  GKK Manager Member Corp., its managing member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
   

  	
  /s/
  Roger M. Cozzi

  
	
   

  	
   

  	
   

  	
   

  	
  Name:
  

  	
  Roger
  M. Cozzi

  
	
   

  	
   

  	
   

  	
   

  	
  Title:
  

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Jon W. Clark

  
	
   

  	
   

  	
  Name:
  Jon W. Clark

  

 

17Exhibit
10.1

 

FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED SENIOR SECURED, SUPER-PRIORITY
DEBTOR-IN-POSSESSION CREDIT AGREEMENT AND WAIVER AND CONSENT OF LENDERS AND
AGENT

 

This FIRST
AMENDMENT TO FOURTH AMENDED AND RESTATED SENIOR SECURED, SUPER-PRIORITY
DEBTOR-IN-POSSESSION CREDIT AGREEMENT AND WAIVER AND CONSENT OF LENDERS AND
AGENT (this “Waiver and Amendment”) is dated as of April 23,
2009, and entered into by and among FLEETWOOD
ENTERPRISES, INC.  as debtor and
debtor-in-possession (“Fleetwood”), FLEETWOOD HOLDINGS INC.
(“Holdings”) as debtor and debtor-in-possession and those Subsidiaries
of Fleetwood and Holdings listed on the signature pages hereof as debtors
and debtors-in-possession (collectively, “Borrowers”), the banks and
other financial institutions signatory hereto that are parties as Lenders to
the Credit Agreement referred to below (the “Lenders”), and BANK OF AMERICA, N.A., as administrative agent and
collateral agent (in such capacity, the “Agent”) for the Lenders.

 

RECITALS

 

WHEREAS, Fleetwood, the Borrowers, the Lenders, and the Agent
have entered into that certain Fourth Amended and Restated Senior Secured,
Super-Priority Debtor-in-Possession Credit Agreement dated as of April 1,
2009 (as amended, amended and restated, extended, supplemented or otherwise
modified from time to time, the “Credit Agreement”). 
Capitalized terms used herein but not otherwise defined shall have their
respective meanings as defined in the Credit Agreement;

 

WHEREAS, on April 1, 2009, the United
States Bankruptcy Court for the Central District of California, Riverside
Division entered the Interim Order approving, among other things, the entry by
Fleetwood and the Borrowers of the Credit Agreement and the extension of credit
thereunder on an interim basis;

 

WHEREAS, the term “Approved Budget” is defined
in the Credit Agreement as a weekly
delivered rolling 13-week post-petition budget that is acceptable to the Agent
and the Required Lenders, the initial version of which was approved by the
Bankruptcy Court and attached as an exhibit to the Interim Order; provided that any Approved Budget may be
subsequently amended, supplemented or replaced by the Borrowers with the
approval of the Agent and the Required Lenders and without further approval of
the Bankruptcy Court (with any such supplement that solely adds an additional
Measurement Period deemed acceptable if no objection thereto is made by the
Agent or the Required Lenders within two (2) Business Days of receipt
thereof);

 

WHEREAS, (a) Section 5.2(s) of
the Credit Agreement provides that by the end of the day four (4) Business
Days following the last day of each Measurement Period, the Borrowers must
deliver to the Agent a report (a “Variance Report”) stating whether the
Borrowers are in compliance with the conditions set forth in Section 7.22 of the Credit Agreement  together with supporting detail
reasonably acceptable to the Agent, which supporting 

 

1

 

detail shall include, without limitation, statements
of weekly and cumulative variances for the applicable six (6) Measurement
Period testing period in any Line Item for expenditures; (b) the Variance
Reports delivered to the Agent on April 9, 2009 and April 16, 2009
indicated that the Borrowers were not in compliance with the covenants set
forth in Section 7.22(a) of the Credit Agreement  with
respect to the Measurement Periods ended April 5, 2009 and April 12,
2009, respectively; and (c) the Borrowers have advised the Lenders that
the failure to comply with Section 7.22(a) of the Credit Agreement  for the Measurement Periods ended April 5,
2009 and April 12, 2009, respectively, was caused by a delay in receipt of
a receivable, the payment of which is initiated by the U.S. Army Corps of
Engineers and scheduled for receipt in April 2009 relating to Fleetwood’s
military modular business in an amount not less than $6,400,000, originally
budgeted to be received in the week ending April 5, 2009 (the “April Military
Housing Payment”);

 

WHEREAS, the Borrowers have advised the Lenders
that the revised proposed Approved Budget, attached hereto as Exhibit A,
reflects the new projected date for receipt of the April Military Housing
Payment (on or prior to April 17, 2009 (such date the “Military Payment
Revised Date”));

 

WHEREAS, the Borrowers have requested that the
Agent and the Required Lenders approve the proposed Approved Budget attached
hereto as Exhibit A, thereby causing such proposed Approved Budget
to become the Approved Budget;

 

WHEREAS, the Borrowers have requested of the Agent and the
Lenders certain other waivers, consents and approvals under the Credit
Agreement;

 

WHEREAS, the Borrowers have requested the
amendments to the Credit Agreement as further set forth herein; and

 

WHEREAS, the Required Lenders and the Agent are willing
to give the waivers, consents and approvals requested by the Loan Parties and
the Lenders and the Agent are willing to agree to the amendments to the Credit
Agreement requested by the Borrowers, in each case, on the terms and conditions
set forth in this Waiver and Amendment.

 

AGREEMENT

 

NOW
THEREFORE, for and in consideration of the premises and the
mutual covenants and agreements set forth herein, the receipt and sufficiency
of which are hereby acknowledged, Fleetwood, the Borrowers, the Lenders, and
the Agent agree as follows:

 

1.     WAIVER.  Subject to
the satisfaction of the conditions set forth below under Section 5,
the Lenders hereby waive any Default or Event of Default that may have arisen
solely from the failure of the Borrowers to comply with Section 7.22(a) of
the Credit Agreement for the Measurement Periods ended April 5, 2009 and April 12,
2009 as well as any breaches of
representations and warranties and Defaults or Events of Default under any
other Loan Documents brought about solely by the aforementioned breach, in each
case, prior to the date hereof. 
For the avoidance of doubt, by the foregoing waiver, the Lenders shall
not have waived any requirement for the Borrowers to comply with Section 7.22(a) of
the Credit Agreement, as the same shall be in effect upon the amendment and
restatement of the Approved Budget as consented to by the Required Lenders
pursuant to Section 2 below.

 

2

 

2.     CONSENT.  Subject to the satisfaction of the
conditions set forth below under Section 5, the Lenders hereby
consent to and approve the proposed Approved Budget attached hereto as Exhibit A
and such proposed Approved Budget shall therefore become the Approved Budget.

 

3.     AMENDMENTS TO THE CREDIT
AGREEMENT.  Subject to the
conditions and upon the terms set forth in this Waiver and Amendment and in
reliance on the representations and warranties of Fleetwood and the Borrowers
set forth in this Waiver and Amendment, the Credit Agreement is hereby amended
as follows:

 

3.1   Amendment to Section 7.22.  Section 7.22 of the Credit
Agreement shall be amended by adding the following clause (c) after the
existing clause (b):

 

“(c)         Fleetwood Liquidity
for any six consecutive Measurement Periods shall not be less than eighty-five
percent (85%) of the average projected Fleetwood Liquidity as set forth in the
Approved Budget for such six consecutive Measurement Periods, in each case,
tested on a rolling six (6) consecutive Measurement Period basis; provided
that before the end of the Initial Testing Period, the test shall be for all
lesser number of Measurement Periods as shall have been completed through the
end of the applicable Measurement Period; provided further that there
shall be no diminution in the percentage of projected cash receipts for any
tests during the Initial Testing Period.”

 

3.2   Amendments to Annex A.  Annex A to the Credit Agreement shall
be amended by adding the following additional definitions in the appropriate
alphabetical order thereto:

 

“Fleetwood Liquidity” means, for any Measurement Period, the sum
of (a) the Availability as of the last day of such Measurement Period plus
(b) the Qualified Cash Equivalents held by the Loan Parties as of the last
day of such Measurement Period, and for multiple Measurement Periods, the sum
of the Fleetwood Liquidity amounts for the Measurement Periods in the
applicable testing period divided by the number of Measurement Periods in such
testing period.

 

“Qualified Cash Equivalents” means, as of any date for any
Person, the balance of cash and marketable securities (other than Borrowing
Base Cash Collateral) held by such Person in the United States on such date,
which cash and marketable securities are held in an account with the Agent and
are subject to a first priority, perfected Lien in favor of the Agent and the
use of which is not otherwise restricted, by law or by agreement.

 

3.3   Amendment to Annex A.  Annex A to the Credit Agreement shall
be amended by amending and restating clause (vii) of the definition of “Termination
Date” to read as follows:

 

3

 

“(vii) April 30, 2009 if
the Final Order has not been entered by the Bankruptcy Court on or before such
date,”

 

4.     REPRESENTATIONS AND
WARRANTIES OF FLEETWOOD AND THE BORROWERS. 
In order to induce the Lenders and the Agent to enter into
this Waiver and Amendment, each of Fleetwood and each Borrower represents and
warrants to each Lender and the Agent that the following statements are true,
correct and complete as of the date hereof:

 

4.1   Power and Authority.  Each of the Loan Parties has all corporate
power and authority to enter into this Waiver and Amendment and, as applicable,
the Consent of Guarantors attached hereto as Exhibit B (the “Consent”).

 

4.2   Corporate Action.  The execution and delivery of this Waiver and
Amendment and the Consent and the performance of the obligations of each Loan
Party hereunder have been duly authorized by all necessary corporate action on
the part of each of the Loan Parties.

 

4.3   No Conflict or Violation
or Required Consent or Approval. 
The execution and delivery of this Waiver and Amendment and the Consent
and each Loan Party’s performance of this Waiver and Amendment, the Consent,
the Credit Agreement and the other Loan Documents to which it is a party do not
and will not conflict with, or constitute a violation or breach of, or result
in the imposition of any Lien upon the property of Fleetwood or any of its
Subsidiaries, by reason of the terms of (a) except as prohibited or
excused by the Applicable Order or by reason of commencement of the Chapter 11
Cases, any material contract, mortgage, lease, agreement, indenture, or
instrument to which Fleetwood or any of its Subsidiaries is a party or which is
binding upon it, the breach of which could reasonably be expected to result in
a Material Adverse Effect, (b) any Requirement of Law applicable to
Fleetwood or any of its Subsidiaries, the violation of which could reasonably
be expected to result in a Material Adverse Effect or (c) the certificate
or articles of incorporation or by-laws or the limited liability company or
limited partnership agreement (or other organizational documents) of Fleetwood
or any of its Subsidiaries, and do not and will not require any consent or
approval of any Person other than the parties hereto.

 

4.4   Execution, Delivery and
Enforceability.  This
Waiver and Amendment and the Consent have been duly executed and delivered by
each Loan Party which is a party thereto and are the legal, valid and binding
obligations of such Loan Party, enforceable in accordance with their terms,
except as enforceability may be affected by applicable bankruptcy, insolvency,
and similar proceedings affecting the rights of creditors generally, and
general principles of equity.

 

4.5   No Default or Event of
Default.  Except as
described in this Waiver and Amendment, no event has occurred and is
continuing, and no event will result from the execution and delivery of this
Waiver and Amendment or the Consent, that would constitute a Default or an
Event of Default.

 

4

 

4.6   Representations and
Warranties.  Each of the
representations and warranties contained in the Loan Documents is and will be
true and correct in all material respects on and as of the date hereof and as
of the effective date of this Waiver and Amendment, except to the extent that
such representations and warranties specifically relate to an earlier date, in
which case they were true, correct and complete in all material respects as of
such earlier date.

 

4.7   Changes to the Approved
Budget.  Other than as
necessary to reflect the delayed receipt by the Borrowers of the April Military
Housing Payment on or prior to the Military Payment Revised Date, and
the addition of any supplement that solely adds
an additional one or more Measurement Periods to the Approved Budget in effect
prior to the effectiveness of this Waiver and Amendment, no amendments,
supplements or replacements or other changes were made to the Approved Budget
compared to that which was in effect immediately prior to the effectiveness of
this Waiver and Amendment.

 

5.     CONDITIONS TO
EFFECTIVENESS OF THIS WAIVER AND AMENDMENT. 
This Waiver and Amendment, and the consents and approvals
contained herein, shall be effective only if and when signed by, and when
counterparts hereof shall have been delivered to the Agent (by hand delivery,
mail or telecopy) by, Fleetwood, the Borrowers, the Agent and each Required
Lender (or with respect to the amendment in Section 3.3, each
Lender) and only if and when each of the following conditions is satisfied:

 

5.1   Consent of
Guarantors.  Each of the
Guarantors shall have executed and delivered to the Agent the Consent.

 

5.2   No Default or Event of
Default; Accuracy of Representations and Warranties.  No Default or Event of Default shall exist
and each of the representations and warranties made by the Loan Parties herein
and in or pursuant to the Loan Documents shall be true and correct in all
material respects as if made on and as of the date on which this Waiver and
Amendment becomes effective (except that any such representation or warranty
that is expressly stated as being made only as of a specified earlier date
shall be true and correct as of such earlier date), and the Borrowers shall
have delivered to the Agent a certificate confirming such matters.

 

6.     EFFECTIVE DATE.  This
Waiver and Amendment shall become effective (the “Effective Date”) on
the date of the satisfaction of the conditions set forth in Section 5;
provided that, notwithstanding anything herein to the contrary, the
amendment set forth in Section 3.3 shall only be effective on the
date when the Agent has received counterparts of this Waiver and Amendment from
all Lenders.

 

7.     EFFECT OF WAIVER AND
AMENDMENT; RATIFICATION.  This
Waiver and Amendment is a Loan Document. 
From and after the date on which this Waiver and Amendment becomes
effective, all references in the Loan Documents to the Credit Agreement shall
mean the Credit Agreement as amended hereby. 
Except as expressly waived herein, the Credit Agreement and the other
Loan Documents, including the Liens granted thereunder, shall remain in full
force and effect, and all terms and provisions thereof are hereby ratified and
confirmed.

 

8.     Each of Fleetwood and the Borrowers
confirms that as amended hereby, each of the Loan Documents is in full force
and effect, and that none of the Credit Parties has any defenses, setoffs or
counterclaims to its Obligations.

 

5

 

9.     APPLICABLE LAW.  THE VALIDITY, INTERPRETATIONS AND
ENFORCEMENT OF THIS WAIVER AND AMENDMENT AND ANY DISPUTE ARISING OUT OF OR IN
CONNECTION WITH THIS WAIVER AND AMENDMENT, WHETHER SOUNDING IN CONTRACT, TORT,
EQUITY OR OTHERWISE, SHALL BE GOVERNED BY THE INTERNAL LAWS AND DECISIONS OF
THE STATE OF CALIFORNIA; PROVIDED THAT THE AGENT AND THE LENDERS SHALL RETAIN
ALL RIGHTS ARISING UNDER FEDERAL LAW. 
THE PROVISIONS IN SECTION 13.3 OF THE CREDIT AGREEMENT WITH RESPECT
TO GOVERNING LAW, CHOICE OF FORUM AND SERVICE OF PROCESS SHALL APPLY TO THE
WAIVER AND AMENDMENT AS IF FULLY SET FORTH HEREIN.

 

10.   NO WAIVER.  The execution, delivery and
effectiveness of this Waiver and Amendment does not constitute a waiver of any
Default or Event of Default, amend or modify any provision of any Loan Document
except as expressly set forth herein or constitute a course of dealing or any
other basis for altering the Obligations of any Loan Party.

 

11.   COMPLETE AGREEMENT.  This Waiver and Amendment sets
forth the complete agreement of the parties in respect of any amendment to any
of the provisions of any Loan Document or any waiver thereof.  The execution, delivery and effectiveness of
this Waiver and Amendment does not constitute a waiver of any Default or Event
of Default, amend or modify any provision of any Loan Document except as
expressly set forth herein or constitute a course of dealing or any other basis
for altering the Obligations of any Loan Party.

 

12.   CAPTIONS;
COUNTERPARTS.  The headings
and captions herein are intended solely for convenience of reference and shall
not be used to interpret or construe the provisions hereof.  This Waiver and Amendment may be executed by
one or more of the parties to this Waiver and Amendment on any number of
separate counterparts (including by telecopy), all of which taken together
shall constitute but one and the same instrument.

 

[signatures follow; remainder of page intentionally
left blank]

 

6

 

	
  IN WITNESS WHEREOF, each of the undersigned has duly
  executed this Waiver and Amendment as of the date set forth above.

  
	
   

  
	
  “BORROWERS”

  	
  FLEETWOOD HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF ARIZONA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF CALIFORNIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF FLORIDA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF GEORGIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF IDAHO, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF INDIANA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF KENTUCKY, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF NORTH CAROLINA,
  INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF OREGON, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF PENNSYLVANIA,
  INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF TENNESSEE, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF TEXAS, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  FLEETWOOD GENERAL PARTNER

  
	
   

  	
  OF TEXAS, INC., its General Partner

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF VIRGINIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES OF WASHINGTON, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD MOTOR HOMES OF
  CALIFORNIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD MOTOR HOMES OF INDIANA,
  INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD MOTOR HOMES OF
  PENNSYLVANIA, INC.

  

 

First Amendment

 

 

	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF
  CALIFORNIA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF
  INDIANA, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF
  KENTUCKY, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF
  MARYLAND, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF OHIO,
  INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF
  OREGON, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD TRAVEL TRAILERS OF TEXAS,
  INC.

  
	
   

  	
   

  
	
   

  	
  GOLD SHIELD, INC.

  
	
   

  	
   

  
	
   

  	
  GOLD SHIELD OF INDIANA, INC.

  
	
   

  	
   

  
	
   

  	
  CONTINENTAL LUMBER PRODUCTS, INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD GENERAL PARTNER OF TEXAS,
  INC.

  
	
   

  	
   

  
	
   

  	
  FLEETWOOD HOMES INVESTMENT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew M. Griffiths

  
	
   

  	
  Name:

  	
  Andrew M. Griffiths

  
	
   

  	
  Title:

  	
  Senior Vice President and Chief Financial Officer

  

 

First Amendment

 

 

	
  “GUARANTOR”

  	
  FLEETWOOD
  ENTERPRISES, INC.,
  as the Guarantor 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew M. Griffiths

  
	
   

  	
  Name:

  	
  Andrew M. Griffiths

  
	
   

  	
  Title:

  	
  Senior Vice President
  and Chief Financial Officer

  

 

First Amendment

 

 

IN
WITNESS WHEREOF,
each of the undersigned has duly executed this Amendment as of the date set
forth above.

 

	
  “AGENT”

  	
  BANK
  OF AMERICA, N.A.,
  as the Agent 

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
                                                                 

  	
  , Vice President

  

 

First Amendment

 

 

	
  “LENDERS”

  	
  BANK
  OF AMERICA, N.A.,
  as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
                                                                        

  	
  , Vice President

  

 

First Amendment

 

 

	
  “LENDERS”

  	
  WELLS
  FARGO FOOTHILL, INC. fka FOOTHILL CAPITAL CORPORATION, as a Lender 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Juan Barrera

  
	
   

  	
   

  	
  Juan Barrera 

  	
  , Vice President

  

 

First Amendment

 

 

	
  “LENDERS”

  	
  PNC
  BANK, NATIONAL ASSOCIATION, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robin L.Arriola

  
	
   

  	
   

  	
  Robin L.Arriola

  	
  , Vice President

  

 

First Amendment

 

 

	
  “LENDERS”

  	
  TEXTRON
  FINANCIAL CORPORATION, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Norbert Schmidt

  
	
   

  	
   

  	
  Norbert Schmidt

  	
  , Vice President

  

 

First Amendment

 

 

	
  “LENDERS”

  	
  WACHOVIA
  BANK, NATIONAL ASSOCIATION, (formerly known as WACHOVIA CAPITAL FINANCE CORPORATION (WESTERN)), N.A., as a
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael White

  
	
   

  	
   

  	
  Michael White

  	
  , Vice President

  

 

First Amendment

 

 

EXHIBIT B

 

Consent
of Guarantors

 

Reference is made to that
certain First Amendment to Fourth Amended and Restated Senior Secured,
Super-Priority Debtor-in-Possession and Waiver and Consent of Lenders and Agent  (the “Waiver and Amendment”) dated as of April 23,
2009, and entered into by and among FLEETWOOD
ENTERPRISES, INC.  as debtor and
debtor-in-possession (“Fleetwood”), FLEETWOOD HOLDINGS INC.
(“Holdings”) as debtor and debtor-in-possession and those Subsidiaries
of Fleetwood and Holdings listed on the signature pages hereof as debtors
and debtors-in-possession (collectively, “Borrowers”), the banks and
other financial institutions signatory thereto that are parties as Lenders to
the Credit Agreement referred to therein (the “Lenders”), and BANK OF AMERICA, N.A., as administrative agent and
collateral agent (in such capacity, the “Agent”) for the Lenders.  Capitalized terms used herein but not
otherwise defined shall have their respective meanings as defined in the Waiver
and Amendment.

 

Each
of the undersigned is a Guarantor of the Obligations of the Borrowers under the
Credit Agreement and hereby (a) consents to the Waiver and Amendment, (b) acknowledges
that notwithstanding the execution and delivery of the Waiver and Amendment,
the obligations of each of the undersigned Guarantors are not impaired or
affected and the Guaranties continue in full force and effect, and (c) ratifies
its Guaranty and each of the Loan Documents to which it is a party.

 

IN
WITNESS WHEREOF, each of the undersigned has executed and delivered this CONSENT
OF GUARANTORS as of the 23rd day of April, 2009.

 

 

	
  GUARANTORS

  	
  FLEETWOOD
  ENTERPRISES, INC.

  
	
   

  	
  FLEETWOOD
  CANADA LTD.

  
	
   

  	
  FLEETWOOD
  INTERNATIONAL INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew M. Griffiths

  
	
   

  	
  Name:

  	
  Andrew M. Griffiths

  
	
   

  	
  Title:

  	
  Senior Vice President
  and Chief Financial Officer

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