Document:

Exhibit 10.1

 

EXECUTION COPY

 

AMENDED AND RESTATED

MANAGEMENT AGREEMENT

 

THIS AMENDED AND RESTATED MANAGEMENT AGREEMENT is made
as of April 19, 2006 (this “Agreement”) by and between Gramercy Capital
Corp., a Maryland corporation (the “Parent”), GKK Capital LP, a Delaware
limited partnership (the “Operating Partnership” and with the Parent and
Subsidiaries and other entities controlled by either of them, the “Company”),
and GKK Manager LLC, a Delaware limited liability company (the “Manager”).

 

W I T N E S S E T H :

 

WHEREAS, the Parent and the Operating Partnership were
formed by SL Green Realty Corp., a Maryland corporation (with SL Green
Operating Partnership, L.P., a Delaware limited partnership (“SL Green OP”) and
subsidiaries and other entities controlled by either of them, “SL Green”) to
continue SL Green’s specialty real estate finance business in a separate
company;

 

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

 

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

 

WHEREAS, the Parent, the Operating Partnership and the
Manager entered into the original management agreement as of August 2, 2004
(the “Original Management Agreement”) and the Confirmatory Addendum to
Management Agreement (the “Addendum”); and

 

WHEREAS the Parent, the Operating Partnership and the
Manager desire to amend and restate the Original Management Agreement in its
entirety.

 

AGREEMENT

 

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

 

1.             Definitions.

 

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

 

(b)           “Asset Servicing Agreement” means the
Amended and Restated Asset Servicing Agreement between Manager and SLG Gramercy
Services LLC, dated as of the date hereof.

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

(j)            “Governing Instruments” means, with
respect to any Person, the articles of incorporation and bylaws in the case of
a corporation, the certificate of limited partnership (if applicable) and
partnership agreement in the case of a general or limited partnership or the
articles of formation and operating agreement in the case of a limited
liability company.

 

(k)           “Independent Directors” means the
members of the Board of Directors of Parent who are not officers or employees
of the Company, Manager or SL Green and who are otherwise “independent” in
accordance with the Parent’s Governing Instruments and, if applicable, the
rules of the New York Stock Exchange.

 

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

 

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

 

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

 

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

 

(p)           “Outsource
Agreement” means the Amended and Restated Outsource Agreement by and between
the Manager and SL Green Operating Partnership, L.P., dated as of the date
hereof.

 

(q)           “Origination
Agreement” means the Amended and Restated Origination Agreement between the
Parent and SL Green Operating Partnership, L.P., dated as of the date hereof.

 

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

 

(s)           “Person”
means any individual, corporation, partnership, joint venture, limited
liability company, estate, trust, unincorporated association, any federal,
state, county or 

 

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municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of
the foregoing.

 

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

 

(u)           “Special
Limited Partnership Interest” means the interest in the Operating Partnership
granted to the Manager pursuant to the terms of the Partnership Agreement.

 

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

 

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

 

2.             Appointment and Duties of
Manager.

 

(a)           Appointment. The Company
hereby appoints Manager as its exclusive agent to manage the assets of the
Company subject to the further terms and conditions set forth in this
Agreement, and Manager hereby agrees to use its commercially reasonable efforts
to perform each of the duties set forth herein, provided funds are made
available by the Company for such purposes, as set forth in Section 9 hereof.

 

(b)           Duties. Manager, in its
capacity as manager of the Company’s day-to-day operations, at all times will
be subject to the supervision of the Board of Directors and will have only such
functions and authority as the Company may delegate to it, including, without
limitation, the functions and authority identified herein and delegated to
Manager hereby. Manager will perform (or cause to be performed) the following
services and activities for the Company:

 

(i)            serving as the Parent’s consultant
with respect to the periodic review of the investment criteria and parameters
for Investments, borrowings and operations for approval by the Board of
Directors;

 

(ii)           investigating, analyzing and
selecting possible investment opportunities;

 

(iii)          engaging and supervising, on the
Company’s behalf and at the Company’s expense, independent contractors which
provide real estate-related services, investment banking services, mortgage
brokerage services, securities brokerage services, legal services, accounting 

 

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services, due diligence services and other financial
services and such other services as may be required relating to the Company’s
Investments;

 

(iv)          negotiating, executing and closing on
the Company’s behalf the origination, acquisition, sale, exchange or other
disposition of any of the Company’s Investments;

 

(v)           arranging, negotiating, coordinating
and managing operations of any joint venture or co-investment interests held by
the Company and conducting all matters with any joint venture or co-investment
partners;

 

(vi)          providing executive and administrative
personnel;

 

(vii)         administering the Company’s day-to-day
operations and performing and supervising the performance of other
administrative functions necessary to the Company’s management, as may be
agreed upon by Manager and the Board of Directors, including the collection of
revenues and the payment of the Company’s debts and obligations, maintenance of
appropriate computer services to perform such administrative functions, keeping
the Company’s books and records, organizing Board of Directors and committee
meetings, and other services related to the Parent’s obligations as a publicly
traded entity;

 

(viii)        communicating on the Company’s behalf
with the holders of any of the Company’s equity or debt securities as required
to satisfy the reporting and other requirements of any governmental bodies or
agencies or trading markets and to maintain effective relations with such
holders;

 

(ix)           advising the Parent in connection
with policy decisions to be made by the Parent’s Board of Directors;

 

(x)            evaluating and recommending to the
Board of Directors modifications to the hedging strategies in effect and
causing the Company to engage in overall hedging strategies consistent with the
Company’s status as a REIT and with the Company’s Investment Guidelines;

 

(xi)           advising the Company regarding the
maintenance of the Company’s status as a REIT and monitoring compliance with
the various REIT qualification tests and other rules set out in the Code and
Treasury Regulations thereunder;

 

(xii)          advising the Company regarding the
maintenance of the Company’s exemption from the Investment Company Act and
monitoring compliance with the requirements for maintaining an exemption from
the Investment Company Act;

 

(xiii)         assisting the Company in developing
criteria for Investment commitments meeting the Company’s objectives, and
making available to the Company its knowledge and experience with respect to
real estate, real estate securities and other real estate-related assets;

 

(xiv)        representing, and making recommendations
to, the Company in connection with the purchase and finance and commitment to
purchase and finance of whole loans, mezzanine loans and interests therein,
mortgage loans and interests therein (including on a 

 

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portfolio basis), real estate, real estate securities
and other real estate-related assets, and the sale and commitment to sell such
assets;

 

(xv)         monitoring the operating performance of
the Company’s Investments and providing periodic reports with respect thereto
to the Board of Directors as requested by the Board of Directors, including
comparative information with respect to such operating performance, budgeted or
projected operating results and compliance with the Company’s Investment
Guidelines;

 

(xvi)        investing or reinvesting any money of
the Company (including investing in short-term investments pending investment
in long-term asset investments, payment of fees, costs and expenses, or
payments of dividends or distributions to the Company’s stockholders and
partners), and advising the Parent and the Operating Partnership as to their
respective capital structures and capital raising;

 

(xvii)       causing the Parent and the Operating
Partnership to retain qualified accountants and legal counsel, as applicable,
to assist in developing appropriate accounting procedures, compliance
procedures and testing systems with respect to financial reporting obligations
and Parent’s compliance with the REIT provisions of the Code and to conduct
quarterly compliance reviews thereof;

 

(xviii)      causing the Parent and the Operating
Partnership to qualify to do business in all applicable jurisdictions and to
obtain and maintain all appropriate licenses;

 

(xix)         assisting the Parent and the Operating
Partnership in complying with all regulatory requirements applicable to the Parent
and the Operating Partnership in respect of its business activities, including
preparing or causing to be prepared all financial statements required under
applicable regulations and contractual undertakings and all reports and
documents, if any, required under the Exchange Act, the Securities Act of 1933,
as amended, and the rules and regulations promulgated thereunder;

 

(xx)          taking all necessary actions to enable
the Parent and the Operating Partnership to make required tax filings and
reports, including with respect to the Parent, soliciting stockholders for
required information to the extent provided by the REIT provisions of the Code;

 

(xxi)         handling and resolving all claims,
disputes or controversies (including all litigation, arbitration, settlement or
other proceedings or negotiations) in which the Company may be involved or to
which the Company may be subject, arising out of the Company’s day-to-day
operations, subject to such limitations or parameters as may be imposed from
time-to-time by the Board of Directors;

 

(xxii)        using commercially reasonable efforts to
cause expenses incurred by or on behalf of the Company to be reasonable or
customary and within any budgeted parameters or expense guidelines set by the
Board of Directors from time-to-time;

 

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(xxiii)       performing such other services as may be
required from time-to-time for management and other activities relating to the
Company’s assets as the Board of Directors shall reasonably request or Manager
shall deem appropriate under the particular circumstances;

 

(xxiv)       using commercially reasonable efforts to
cause the Parent and the Operating Partnership to comply with all applicable
laws; and

 

(xxv)        taking the foregoing actions for the
Subsidiaries.

 

(c)           Asset Management Subcontracts.
Manager may enter into agreements with other parties, including its affiliates
and/or SL Green, for the purpose of engaging one or more asset managers for and
on behalf, and at the sole cost and expense, of the Company to provide asset
management and/or similar services to the Company with respect to the
Investments, pursuant to asset management agreement(s) with terms which are
then customary for agreements regarding the management of assets similar in
type, quality and value to the assets of the Company; provided, that any such
agreements entered into with affiliates of Manager shall be (i) on terms no
more favorable to such affiliate than would be obtained from a third party on
an arm’s-length basis, and (ii) approved by a majority of the Independent
Directors.

 

(d)           Other Service Providers; Special
Servicer. Subject to any required Board of Directors approval, Manager may
retain for and on behalf, and at the sole cost and expense, of the Company such
services of accountants, legal counsel, appraisers, insurers and brokers, among
others, including Manager’s affiliates, as Manager deems necessary or advisable
in connection with the management and operations of the Company and the
provision of its duties under this Agreement; provided, that any such agreement
entered into with an affiliate of Manager to perform any such services shall be
engaged (i) on terms no more favorable to such affiliate than would be obtained
from a third party on an arm’s-length basis, and (ii) approved by a majority of
the Independent Directors. The Company hereby acknowledges and approves the
terms of the Asset Servicing Agreement and the Outsource Agreement. In
connection therewith, the Company agrees that with respect to any Investments
which entitle it to appoint a special servicer or a sub-servicer to a special
servicer, it shall use all commercially reasonable efforts to designate the
Manager or SLG Gramercy Services LLC as such special servicer or sub-servicer. In
such event the fees to be paid to the Manager or SLG Gramercy Services LLC
shall be based on then customary fees paid to third-parties performing similar
functions, and shall be approved by a majority of the Independent Directors. 

 

(e)           CDO’s. If the Company forms,
directly or indirectly, a CDO, CLO, REMIC or other similar vehicle
(collectively, “CDOs”) and retains a collateral manager, the Company shall, or
shall cause the issuer(s) thereof or their related parties to, enter into a
collateral management agreement or other similar agreements with the Manager
similar to those agreements entered into in connection with the formation of
Gramercy Real Estate CDO 2005-1, Ltd. and Gramercy Real Estate CDO 2005-1, LLC
and on substantially the same terms and conditions, or upon the then current
customary market terms and conditions for similar agreements in similar
transactions, reasonably acceptable to the Manager, provided, however, that the
compensation paid to the Manager in connection therewith shall be as set forth
in Section 8(b) hereof.

 

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(f)            Reporting Requirements.

 

(i)            As frequently as Manager may deem
necessary or advisable, or at the direction of the Board of Directors, Manager
shall prepare, or cause to be prepared, with respect to any Investment (A)
reports and information on the Company’s operations and asset performance and
(B) other information reasonably requested by the Company.

 

(ii)           Manager shall prepare, or cause to be
prepared, all reports, financial or otherwise, with respect to the Parent and
the Operating Partnership reasonably required by the Board of Directors in
order for the Parent and the Operating Partnership to comply with its Governing
Instruments or any other materials required to be filed with any governmental entity
or agency, and shall prepare, or cause to be prepared, all materials and data
necessary to complete such reports and other materials including, without
limitation, an annual audit of the Company’s books of account by a nationally
recognized independent accounting firm of good reputation, initially Ernst
& Young, LLP.

 

(iii)          Manager shall prepare regular reports
for the Board of Directors to enable the Board of Directors to review the
Company’s acquisitions, portfolio composition and characteristics, credit
quality, performance and compliance with the Investment Guidelines and policies
approved by the Board of Directors.

 

(g)           Use of Manager’s Funds. Manager
shall not be required to expend money in excess of that contained in any
applicable Company Account or otherwise made available by the Company to be
expended by Manager hereunder.

 

(h)           Reliance by Manager. In
performing its duties under this Section 2, Manager shall be entitled to rely
on qualified experts and professionals (including, without limitation,
accountants, legal counsel and other professional service providers) hired by
Manager at the Company’s sole cost and expense.

 

(i)            Payment and Reimbursement of
Expenses. The Company shall pay all expenses, and reimburse Manager for
Manager’s expenses incurred on its behalf, in connection with any such services
to the extent such expenses are reimbursable by the Company to Manager pursuant
to Section 9 hereof.

 

3.             Dedication; Other
Activities.

 

(a)           Devotion of Time. Manager will
provide a dedicated management team to deliver the management services to the
Company hereunder, the members of which team shall devote such of their time to
the management of the Company as the Manager deems necessary and appropriate,
commensurate with the level of activity of the Company from time to time. The
Company shall have the benefit of Manager’s reasonable judgment and effort in
rendering services and, in furtherance of the foregoing, Manager shall not
undertake activities which, in its reasonable judgment, will substantially
adversely affect the performance of its obligations under this Agreement.

 

(b)           Other Activities. Except to
the extent set forth in clause (a) above, nothing herein shall prevent Manager
or any of its affiliates or any of the officers and employees of any of the 

 

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foregoing from engaging in other businesses or from
rendering services of any kind to any other person or entity, including
investment in, or advisory service to others investing in, any type of real
estate or real estate-related investment, including investments which meet the
principal investment objectives of the Company.

 

(c)           Officers, Employees, Etc. Manager’s
or its affiliates’ members, partners, officers, employees and agents may serve
as directors, officers, employees, agents, nominees or signatories for the
Company or any Subsidiary, to the extent permitted by their Governing
Instruments, as may be amended from time to time, or by any resolutions duly
adopted by the Board of Directors pursuant to the Company’s Governing
Instruments. When executing documents or otherwise acting in such capacities
for the Company or such other Subsidiary, such Persons shall use their
respective titles with respect to the Company or such Subsidiary.

 

4.             Agency. Manager
shall act as the agent of the Company in making, acquiring, financing and
disposing of Investments, disbursing and collecting the Company’s funds, paying
the debts and fulfilling the obligations of the Company, supervising the
performance of professionals engaged by or on behalf of the Company and
handling, prosecuting and settling any claims of or against the Company, the
Board of Directors, holders of the Company’s securities or the Company’s
representatives or assets.

 

5.             Bank Accounts. At
the direction of the Board of Directors, Manager may establish and maintain as
an agent on behalf of the Company one or more bank accounts in the name of the
Parent and the Operating Partnership or any other Subsidiary (any such account,
a “Company Account”), collect and deposit funds into any such Company Account
and disburse funds from any such Company Account, under such terms and
conditions as the Board of Directors may approve. Manager shall from
time-to-time render appropriate accountings of such collections and payments to
the Board of Directors and, upon request, to the auditors of Company.

 

6.             Records; Confidentiality.

 

(a)           Records. Manager shall
maintain appropriate books of account and records relating to services
performed under this Agreement, and such books of account and records shall be
accessible for inspection by representatives of the Company at any time during
normal business hours.

 

(b)           Confidentiality. Manager shall
keep confidential any nonpublic information obtained in connection with the
services rendered under this Agreement and shall not disclose any such
information (or use the same except in furtherance of its duties under this
Agreement), except: (i) to SL Green on the condition that SL Green observe the
requirements of this Section 6(b) as it applies to the Manager; (ii) in
accordance with the Origination Agreement, Outsource Agreement and Asset
Servicing Agreement; (iii) with the prior written consent of the Board of
Directors; (iv) to legal counsel, accountants and other professional advisors;
(v) to appraisers, financing sources and others in the ordinary course of the
Company’s business; (vi) to governmental officials having jurisdiction over the
Company; (vii) in connection with any governmental or regulatory filings of the
Company or disclosure or presentations to Company investors; or (vii) as
required by law or legal process to which Manager or any Person to whom
disclosure is permitted hereunder is a party. The foregoing shall not apply to
information which 

 

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has previously become available through the actions of
a Person other than Manager not resulting from Manager’s violation of this
Section 6(b). The provisions of this Section 6(b) shall survive the expiration
or earlier termination of this Agreement for a period of one year.

 

7.             Obligations of Manager;
Restrictions.

 

(a)           Restrictions. Manager shall
refrain from any action that, in its sole judgment made in good faith, (i) is
not in compliance with the Investment Guidelines, (ii) would adversely affect
the status of the Parent as a REIT, or (iii) would violate any law, rule or
regulation of any governmental body or agency having jurisdiction over the
Company or that would otherwise not be permitted by the Company’s Governing
Instruments. If Manager is ordered to take any such action by the Board of
Directors, Manager shall promptly notify the Board of Directors of Manager’s
judgment that such action would adversely affect such status or violate any
such law, rule or regulation or Governing Instruments. Notwithstanding the
foregoing, Manager, its affiliates and their respective members, stockholders,
partners, managers, directors, officers, employees and agents shall not be
liable to the Parent, the Operating Partnership or any Subsidiary, the Board of
Directors or any of the Company’s stockholders, members or partners for any act
or omission by Manager, its managers, directors, officers, employees or agents
taken in good faith or except as provided in Section 11 hereof.

 

(b)           Board of Directors Review. The
Board of Directors will periodically review the Investment Guidelines and the
Company’s investment portfolio but will not review each proposed investment,
except as set forth below. Investments must be approved as follows, unless
otherwise agreed by Manager and the Board of Directors:  an investment committee of the Board of
Directors must unanimously approve all transactions involving investments of
(i) $35 million or more with respect to first mortgage loans,
(ii) $30 million or more with respect to subordinated interests in whole
loans, and (iii) $20 million or more with respect to mezzanine loans,
preferred equity and commercial real estate properties net leased to tenants;
approval by the full Board of Directors is required for investments
(i) over $75 million with respect to first mortgage loans, (ii) over
$65 million with respect to subordinated interests in whole loans,
(iii) over $55 million with respect to mezzanine loans, and (iv) over
$50 million with respect to preferred equity and commercial real estate
properties net leased to tenants.  Manager will have full discretion to
invest on behalf of the Company with respect to investments under (i) $35
million with respect to first mortgage loans, (ii) $30 million with respect
to subordinated interests in whole loans and, (iii) $20 million with
respect to mezzanine loans, preferred equity and commercial real estate
properties net leased to tenants.  Approval limits are based on the
investment amount less any origination fees, discounts or other up-front fees
the Company receives in connection with the investment. Manager can rely upon
the direction of the Secretary of the Board of Directors to evidence the
approval of the Board of Directors. Notwithstanding the foregoing, any
Investment entered into with an affiliate of Manager shall be approved by a
majority of the Independent Directors.

 

(c)           Insurance. Manager shall
maintain “errors and omissions” insurance coverage and such other insurance
coverage which is customarily carried by property, asset and investment
managers performing functions similar to those of Manager under this Agreement
with respect to assets similar to the assets of the Company, in an amount which
is comparable to that customarily maintained by other managers or servicers of
similar assets.

 

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8.             Compensation.

 

(a)           Manager shall receive an annual
management fee equal to 1.75% of Stockholders’ Equity. The annual management
fee shall be calculated on a weighted average basis and paid in cash monthly in
arrears. Manager shall make available the monthly calculation of the base
management fee to the Company within fifteen (15) days following the last day
of each calendar month, and the Company shall pay Manager the base annual
management fee within five business days thereafter.

 

(b)           In connection with any and all CDOs
formed, owned or controlled, directly or indirectly, by the Company, the
Manager shall receive management, service and similar fees equal to (i) 0.25%
per annum of the book value of the assets owned, directly or indirectly, by
managed transitional CDOs, (ii) 0.15% per annum of the book value of the assets
owned, directly or indirectly, by managed non-transitional CDOs, (iii) 0.10%
per annum of the book value of the assets owned, directly or indirectly, by
static CDOs that own primarily non-investment grade bonds, and (iv) 0. 05% per
annum of the book value of the assets owned, directly or indirectly, by static
CDOs that own primarily investment grade bonds. For the purposes of this
Section 8(b), a “managed transitional” CDO shall mean a CDO that is actively
managed, has a reinvestment period and initially owns primarily first mortgage
loans that are secured primarily by non-stabilized real estate assets that are
expected to experience substantial net operating income growth. For the
purposes of this Section 8(b), a “managed non-transitional” CDO shall mean a
CDO that is actively managed, has a reinvestment period and initially owns
primarily first mortgage loans that are secured primarily by stabilized real
estate assets that are not expected to experience substantial net operating
income growth.

 

9.             Expenses. The
Company shall pay all of its expenses and shall reimburse Manager for its
documented expenses incurred on the Company’s behalf in accordance with this
Agreement (collectively, the “Expenses”). Expenses include all costs and
expenses which are expressly designated elsewhere in this Agreement as the
Company’s expenses, together with the following:

 

(a)           expenses incurred in connection with
any issuance of securities, and transaction costs incident to investment
activity and financings;

 

(b)           travel and out-of pocket expenses
incurred in connection with the origination, purchase, financing, refinancing,
sale or disposition of an Investment;

 

(c)           costs of professional fees including,
but not limited to, legal, accounting, tax, auditing and other similar services
performed for the Company;

 

(d)           compensation and expenses, including
liability insurance, for the Company’s directors;

 

(e)           compensation and expenses of the
Company’s custodian and transfer agent;

 

(f)            costs associated with establishing
and maintaining bank accounts and credit facilities, other indebtedness or
securities offerings;

 

(g)           costs associated with any computer
hardware or software used for the Company;

 

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(h)           costs and expenses incurred
contracting with third parties, including affiliates of Manager, and including
expenses under agreements for servicing and outsourcing described under the
Asset Servicing Agreement and Outsource Agreement;

 

(i)            all other costs associated with the
Company’s business and operations, including, but not limited to, costs of
acquiring, owning, protecting, maintaining, developing and disposing of
investments, including appraisal, engineering and environmental studies,
reporting, audit and legal fees;

 

(j)            all insurance costs, including all
costs related to insurance for the Company’s directors, except for those related
to Manager for itself and employees acting on Manager’s behalf;

 

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

 

(l)            expenses connected with interest
payments and dividends made or caused to be made by the Company’s Board of
Directors;

 

(m)          expenses incurred in connection with
communications to holders of securities of the Company and other bookkeeping
and clerical work, including without limitation, all costs of preparing and
filing SEC reports, all listing costs, costs of preparing and distributing
annual reports and proxy materials; and

 

(n) all expenses actually incurred by Manager which
are reasonably necessary for the performance by Manager of its duties and
functions in accordance with the terms of this Agreement.

 

Manager is not entitled
to be reimbursed for wages, salaries and benefits of its officers and employees.
Subject to any required Board of Directors approval, Manager may retain third
parties including accountants, legal counsel, real estate underwriters,
brokers, among others, on the Company’s behalf, and be reimbursed for such
services. The provisions of this Section 9 shall survive the expiration or
earlier termination of this Agreement to the extent such expenses have
previously been incurred or are incurred in connection with such expiration or
termination.

 

10.           Expense Reports and
Reimbursements. Manager shall prepare a statement documenting the
Expenses incurred during, and deliver the same to the Company within forty-five
days following the end of each fiscal quarter. Expenses incurred by Manager on
behalf of the Company shall be reimbursed by the Company within forty-five days
following delivery of the expense statement by Manager. The provisions of this
Section 10 shall survive the expiration or earlier termination of this
Agreement.

 

11.           Limits of Manager
Responsibility; Indemnification. Pursuant to this Agreement, Manager
will not assume any responsibility other than to render the services called for
hereunder and will not be responsible for any action of the Company’s Board of
Directors in following or declining to follow its advice or recommendations. Manager
and its affiliates and their respective members, stockholders, partners,
managers, directors, officers, employees and agents will not be liable to the
Parent, the Operating Partnership, any Subsidiary, any of their directors, 

 

11

 

officers, stockholders,
managers, owners or partners for acts or omissions performed or not performed
in accordance with and pursuant to this Agreement, except by reason of acts or
omissions constituting bad faith, willful misconduct, gross negligence or
reckless disregard of Manager’s duties under this Agreement. The Company
agrees, to indemnify Manager and its affiliates and their respective members,
stockholders, partners, managers, directors, officers, employees and agents
with respect to all expenses, losses, actual damages, liabilities, demands,
charges and claims arising from acts or omissions of Manager performed in good
faith in accordance with and pursuant to this Agreement and not resulting from
the willful misconduct, gross negligence or reckless disregard of Manager. Manager
agrees to indemnify Company and its directors and officers with respect to all
expenses, losses, actual damages, liabilities, demands, charges and claims
arising from acts of Manager constituting bad faith, willful misconduct, gross
negligence or reckless disregard of its duties under this Agreement, as determined
pursuant to a final, non-appealable order of a court of competent jurisdiction.
The provisions of this Section 11 shall survive the expiration or earlier
termination of this Agreement.

 

12.           No Joint Venture.
Nothing in this Agreement shall be construed to make the Company and Manager
partners or joint venturers or impose any liability as such on either of them.

 

13.           Term; Termination.

 

(a)           Term. This Agreement shall
remain in full force through December 31, 2009, unless terminated by the
Company or Manager as set forth below, and shall be renewed automatically for
successive one (1) year periods thereafter, until this Agreement is terminated
in accordance with the terms hereof.

 

(b)           Non-Renewal. Either party may
elect not to renew this Agreement at the expiration of the initial term or any
renewal term for any or no reason by notice to the other party at least six (6)
months prior to the end of the term.

 

(c)           Termination by the Company. The
Company may terminate this Agreement effective thirty (30) days after notice of
termination from the Parent and the Operating Partnership to Manager in the
event that any act of fraud, misappropriation of funds, or embezzlement against
the Company or other willful and material violation of this Agreement by Manager
in its corporate capacity (as distinguished from the acts of any employees of
Manager which are taken without the complicity of any of the executive officers
of Manager or SL Green); provided, that with respect to a willful and material
violation of this Agreement only, such willful and material violation continue
for a period of thirty (30) days after written notice thereof specifying such
violation and requesting that the same be remedied in such thirty (30) day
period.

 

(d)           Termination by Manager. Manager
may terminate this Agreement effective upon thirty (30) days prior written
notice of termination to the Company in the event that the Company shall
default in the performance or observance of any material term, condition or
covenant in this Agreement and such default shall continue for a period of
thirty (30) days after written notice thereof specifying such default and
requesting that the same be remedied in such thirty (30) day period.

 

12

 

(e)           Termination Fees. In the event
this Agreement is not renewed by the Company under Section 13(b) or is
terminated under Section 13(d), the Company shall pay Manager on the
termination date a termination fee equal to two times the sum of the higher of
the aggregate annual fees paid under this Agreement to Manager plus the higher
of the aggregate annual fees paid under the Asset Servicing Agreement to the
Servicer thereunder, in both instances in either of the two calendar years
immediately preceding the effective date of the termination; provided, however,
that if in connection with such termination the Company acquires the Manager or
the Manager’s business and, as a result, becomes self-managed pursuant to a separate agreement (the
“Internalization Agreement”) between or among the Manager, its members or/and
their respective affiliates and the Company, no termination fee shall be
due and payable to the Manager pursuant to this Section 13(e). In such event,
the consideration to be paid for such internalization shall be as set forth in
the Internalization Agreement. The
Company’s obligation to pay a termination fee shall survive the termination of
this Agreement.

 

(f)            Survival. If this Agreement
is terminated pursuant to this Section 13, such termination shall be without
any further liability or obligation of either party to the other, except as
otherwise expressly provided herein.

 

14.           Action Upon Termination or
Expiration of Origination Period. From and after the effective date
of termination of this Agreement pursuant to Section 13, Manager shall not
be entitled to compensation for further services under this Agreement but shall
be paid all compensation accruing to the date of termination, reimbursement for
all Expenses and a termination fee, if applicable. Upon such termination or
expiration, Manager shall reasonably promptly:

 

(a)           after deducting any accrued
compensation and reimbursement for Expenses to which it is then entitled, pay
over to the Company all money collected and held for the account of the Company
pursuant to this Agreement;

 

(b)           deliver to the Board of Directors a
full accounting, including a statement showing all payments collected and all
money held by it, covering the period following the date of the last accounting
furnished to the Board of Directors with respect to the Company and through the
termination date; and

 

(c)           deliver to the Board of Directors all
property and documents of the Company provided to or obtained by Manager
pursuant to or in connection with this Agreement, including all copies and
extracts thereof in whatever form, then in Manager’s possession or under its
control.

 

15.           Reserved.

 

16.           Release of Money or other
Property Upon Written Request. Manager agrees that any money or
other property of the Company held by Manager under this Agreement shall be
held by Manager as custodian for the Company, and Manager’s records shall be
clearly and appropriately marked to reflect the ownership of such money or
other property by the Company. Upon the receipt by Manager of a written request
signed by a duly authorized officer of the Company requesting Manager to
release to the Company any money or other property then held by 

 

13

 

Manager for the account
of the Company under this Agreement, Manager shall release such money or other
property to the Company within a reasonable period of time, but in no event
later than thirty (30) days following such request. Manager shall not be liable
to the Parent, the Operating Partnership, any Subsidiary or any of their
respective directors, officers, stockholders, managers, owners or partners for
any acts or omissions by the Company in connection with the money or other
property released to the Company in accordance with the terms hereof. The
Company shall indemnify Manager and its affiliates and their respective
members, stockholders, partners, managers, directors, officers, employees and
agents against any and all expenses, losses, damages, liabilities, demands,
charges and claims of any nature whatsoever which arise in connection with
Manager’s release of such money or other property to the Company in accordance
with the terms of this Section 16. Indemnification pursuant to this Section 16
shall be in addition to any right to indemnification under Section 11.

 

17.           Notices. Unless
expressly provided otherwise in this Agreement, all notices, requests, demands
and other communications required or permitted under this Agreement shall be in
writing and shall be deemed to have been duly given, made and received when
delivered against receipt or upon actual receipt of (a) personal delivery, (b)
delivery by a reputable overnight courier, (c) delivery by facsimile
transmission against answerback, or (d) delivery by registered or certified
mail, postage prepaid, return receipt requested, addressed as set forth below:

 

	
  If to the Parent or the Operating Partnership:

  	
   

  	
  Gramercy Capital Corp.

  
	
   

  	
   

  	
  420 Lexington
  Avenue

  
	
   

  	
   

  	
  New York, New
  York 10170

  
	
   

  	
   

  	
  Attention:
  Office of General Counsel

  
	
   

  	
   

  	
   

  
	
  If to Manager:

  	
   

  	
  GKK Manager LLC

  
	
   

  	
   

  	
  c/o SL Green
  Realty Corp.

  
	
   

  	
   

  	
  420 Lexington
  Avenue

  
	
   

  	
   

  	
  New York, New
  York 10170

  
	
   

  	
   

  	
  Attention:
  General Counsel

  

 

Any party may change the address to which
communications or copies are to be sent by giving notice of such change of
address in conformity with the provisions of this Section 17 for the giving of
notice.

 

18.           Binding Nature of
Agreement; Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and permitted assigns as provided in this
Agreement.

 

19.           Entire Agreement;
Addendum; Amendments. This Agreement and the Addendum contain the
entire agreement and understanding among the parties hereto with respect to the
subject matter hereof and supersede all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or
written, of any nature whatsoever with respect to the subject matter of this
Agreement and the Addendum. The express terms of this Agreement and the
Addendum control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms of this Agreement and the Addendum. This
Agreement and the Addendum may not be modified or amended other than by an
agreement in 

 

14

 

writing signed by the
parties hereto. For avoidance of doubt, the parties hereto acknowledge that
notwithstanding the restatement of the Original Management Agreement, the
Addendum continues to be in full force and effect.

 

20.           Governing Law. This
Agreement and all questions relating to its validity, interpretation,
performance and enforcement shall be governed by and construed, interpreted and
enforced in accordance with the internal laws of the State of New York, without
regard to conflicts of laws principles thereof.

 

21.           Indulgences, Not Waivers.
Neither the failure nor any delay on the part of a party to exercise any right,
remedy, power or privilege under this Agreement shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, remedy, power or
privilege preclude any other or further exercise of the same or of any other
right, remedy, power or privilege, nor shall any waiver of any right, remedy,
power or privilege with respect to any occurrence be construed as a waiver of
such right, remedy, power or privilege with respect to any other occurrence. No
waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.

 

22.           Titles Not to Affect
Interpretation. The titles of sections, paragraphs and subparagraphs
contained in this Agreement are for convenience only, and they neither form a
part of this Agreement nor are they to be used in the construction or
interpretation of this Agreement.

 

23.           Execution in Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original as against any party whose signature appears
thereon, and all of which shall together constitute one and the same instrument.
This Agreement shall become binding when one or more counterparts of this
Agreement, individually or taken together, shall bear the signatures of all of
the parties reflected hereon as the signatories.

 

24.           Provisions Separable.
The provisions of this Agreement are independent of and separable from each
other, and no provision shall be affected or rendered invalid or unenforceable
by virtue of the fact that for any reason any other or others of them may be
invalid or unenforceable in whole or in part.

 

25.           Principles of Construction.
Words used herein regardless of the number and gender specifically used, shall
be deemed and construed to include any other number, singular or plural, and
any other gender, masculine, feminine or neuter, as the context requires. All
references to recitals, sections, paragraphs and schedules are to the recitals,
sections, paragraphs and schedules in or to this Agreement unless otherwise
specified.

 

26.           Assignment; Change of
Control of the Manager. Manager may not assign its duties under this
Agreement except as described in this Section 26. The Manager may assign this
Agreement, the Manager’s duties hereunder or direct or indirect interests in
the Manager so long as the assignee or Manager, as the case may be, shall be
controlled, directly or indirectly, by SL Green Realty Corp. For the avoidance
of doubt, for the purposes of this Section 26, SL Green Realty Corp. shall
include any successor to SL Green Realty Corp., whether by merger, 

 

15

 

consolidation or similar
business combination transaction, however characterized. Furthermore, in the
event the owners of Manager seek to assign this Agreement or sell interests in
the Manager which will transfer to a person not affiliated with SL Green the
power to direct or control the Manager, Manager shall notify the Company as to
the terms and conditions on which such assignment or transfer is proposed to be
made (the “Transfer Notice”) at least thirty (30) days prior to the proposed
completion of such assignment or transfer. The Company shall have thirty (30)
days to (i) match such offer, in which event Manager or its owners shall assign
or transfer the interest to the Company on the same terms and conditions as set
forth in the Transfer Notice or (ii) cause a third party to match such offer,
in which event Manager or its owners shall assign or transfer the interest to
such third party on the same terms and conditions as set forth in the Transfer
Notice, in each case within thirty (30) days after such matching offer. If the
Company does not match the offer or cause a third party to match the offer
within thirty (30) days after the Transfer Notice is sent, Manager or its
owners shall be free to consummate the transaction described in the Transfer
Notice. No transfer or assignment may be proposed hereunder unless the
transferee has, at the time of the Transfer Notice, (i) at least five years’
experience managing assets of the type in which the Company invests or intends
to invest and (ii) at least $500 million of such assets under management.

 

16

 

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

 

	
   

  	
  GKK MANAGER LLC

  
	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GRAMERCY CAPITAL CORP.

  
	
   

  	
  a Maryland corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GKK CAPITAL LP

  
	
   

  	
  a Maryland limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

17Exhibit
10.2

 

AMENDED AND RESTATED

ORIGINATION AGREEMENT

 

THIS AMENDED AND RESTATED ORIGINATION AGREEMENT (this
“Agreement”), dated as of April 19, 2006 is made by and between Gramercy
Capital Corp., a Maryland corporation (the “Parent”), and SL Green Operating
Partnership, L.P., a Delaware limited partnership (“SL Green OP” and, with its
parent SL Green Realty Corp., a Maryland corporation, and subsidiaries and
other entities controlled by either of them, “SL Green”).

 

RECITALS

 

WHEREAS, the Parent and GKK Capital LP, a Delaware
limited partnership (the “Operating Partnership” and collectively with the
Parent and subsidiaries and other entities controlled by either of them, the
“Company”) engaged GKK Manager LLC, a Delaware limited liability company (the “Manager”),
and a subsidiary of SL Green to provide management services to the Company
pursuant to that certain Management Agreement dated as of August 2, 2004, as
amended and restated as of the date hereof (the “Management Agreement”) by and
among the Parent, the Operating Partnership and the Manager; and

 

WHEREAS, the Parent and SL Green OP entered into an
origination agreement dated as of August 2, 2004, to address certain elements
of the relationship between the Company and SL Green, including rights to acquire
fixed income investments and SL Green OP’s ownership in the Parent or the
Operating Partnership (the “Original Origination Agreement”);

 

WHEREAS, the Parent and SL Green OP wish to amend and
restate the Original Origination Agreement in its entirety.

 

AGREEMENT

 

NOW THEREFORE, in consideration of the mutual
agreements herein set forth and intending to be legally bound, the parties
hereto agree that the Original Origination Agreement shall be amended and
restated in its entirety as follows:

 

1.               Limits
on Origination by SL Green.

 

(a)                                  Except
as otherwise set forth in paragraph (b) below:

 

(i) SL Green will
not originate, acquire or participate in Fixed Income Investments. “Fixed
Income Investments” means debt obligations or interests in debt obligations
bearing a fixed rate of return and collateralized primarily by real property or
interests in real property located in the United States; and

 

(ii)                                  SL
Green will not originate, acquire or participate in Preferred Equity
Investments which bear a fixed rate of return relating primarily to real
property or interests in real property located in the United States, unless the
Company has determined not to pursue a particular Preferred Equity Investment
opportunity. “Preferred Equity Investments” are investments in preferred stock,
preferred shares, preferred interests in partnerships or limited 

 

 

liability companies or
other equity securities which are, by their terms, given a preference in
returning capital in liquidation, upon bankruptcy or otherwise.

 

(b)                                 Notwithstanding
paragraph (a), SL Green may:

 

(i)                                     retain
any Fixed Income Investments and/or Preferred Equity Investments it owns or has
committed to own as of the date hereof and any Fixed Income Investments and/or
Preferred Equity Investments owned or committed to be owned, as of the date of
a business combination, change of control or other similar transaction, by
companies that are acquired by SL Green or with respect to which SL Green
engages in such a transaction; provided, however, that SL Green shall not
acquire companies or businesses engaged primarily in Gramercy’s primary
business activities;

 

(ii)                                  in
connection with any Fixed Income Investment, Preferred Equity Investment or
interest in real property which SL Green owns at any given time, SL Green may
originate, acquire or participate in Fixed Income Investments and/or Preferred
Equity Investments in connection with the sale, recapitalization or
restructuring (however characterized) of any such investment or interest;

 

(iii)                               originate,
acquire or participate in Fixed Income Investments and/or Preferred Equity
Investments that provide a rate of return tied to or measured by, the cash
flow, appreciation or both of the underlying real property or interests in real
property;

 

(iv)                              originate,
acquire or participate in any investment which is considered Distressed Debt as
of the date on which SL Green originates, acquires or participates in such
investment or SL Green enters into a binding contract therefor. “Distressed
Debt” is a Fixed Income Investment where (A) there is a payment default, (B)
there is an acceleration, bankruptcy or foreclosure, (C) a default is highly
likely because the loan-to-value ratio is over 100% or (D) the debt service on
such debt exceeds the available cash flow from the underlying collateral or of
the borrower both on a current and projected basis; and

 

(v)                                 modify,
amend, supplement, extend, refinance or restructure any portion of the
investments in item (i), (ii), (iii) or (iv) above, including, but not limited
to, changes in principal, additional investment, rate of return, maturity or
redemption date, lien priority, collateral, return priority, guarantor and/or
borrower.

 

2.                                       Limits
on Company Origination. The Company will not:

 

(i)                                     acquire
real property or interests in real property located in metropolitan New York or
Washington, D.C. (except by foreclosure or similar conveyance resulting from a
Fixed Income Investment);

 

(ii)                                  originate,
acquire or participate in any investments described in Section 1(b)(iii) above
or any investment which is considered Distressed Debt as of the date on which
such investment is made, in each case where more than 75% by value of the
underlying collateral is real property or interests in real property that are
located in metropolitan New York or Washington, D.C.; or

 

(iii)                               originate,
acquire or participate in any investments described in Sections 1(b) (ii) or
(v) above.

 

2

 

3.               Purchase
Rights/Rights of First Offer.

 

(a)                                  Purchase
Rights -- Properties.

 

(i)                                     When
the Company acquires a direct or indirect ownership interest in real property
or interests in real property located in metropolitan New York or Washington,
D.C. (any such interest being an “Acquired Property”) by foreclosure, similar
conveyance or transfer in lieu thereof (a “Proceeding”), prior to the Company
selling such Acquired Property, SL Green may purchase the Acquired Property at
a price equal to the unpaid principal balance of the Fixed Income Investment
giving rise to the Proceeding on the date the Company foreclosed or acquired
the Acquired Property, plus unpaid interest at the last stated contract
(non-default) rate and, to the extent payable by the borrower under the initial
documentation evidencing the Fixed Income Investment, legal costs incurred by
the Company directly related to the conveyance of the Acquired Property and the
fee, if any, due upon the repayment or prepayment of the Fixed Income
Investment which is commonly referred to as an “exit fee” (but not including
default interest, late charges, prepayment penalties (however denominated),
extension fees, “kicker” interest or other premiums of any kind), through the
date of SL Green’s purchase (“Par Value”).

 

(ii)                                  If
the Company seeks to sell an Acquired Property within one year following the
acquisition of such Acquired Property and receives a bona fide third party
offer to acquire the Acquired Property for cash which offer the Company desires
to accept, SL Green will have a first right to purchase the Acquired Property
at the lower of the Par Value or the third party’s offer price prior to the
Company accepting such offer. The Company will give prompt written notice to SL
Green of its election to sell an Acquired Property, and of receipt of a bona
fide third party offer (together with a copy of any written third party offer).

 

(iii)                               If
an Acquired Property is not sold within one year of the date of its acquisition
by the Company, SL Green has the right to purchase the Acquired Property at its
appraised value. The appraised value will be determined as follows:  the Company will select an appraiser and SL
Green will select an appraiser, who will each appraise the Acquired Property. These
two appraisers jointly will select a third appraiser, who will then choose one
of the two appraisals as the final appraised value.

 

(iv)                              If
SL Green elects to exercise a purchase right set forth in (i) – (iii) above, SL
Green shall send written notice of such election to the Company, setting forth
the calculation of the proposed purchase price and the desired closing date,
which shall be between 15 and 45 days after such notice. If an appraiser is
required, such notice shall also set forth the appraiser selected by SL Green. Unless
the Company objects to the purchase price calculation, the sale to SL Green of
the Acquired Property shall be consummated on the proposed closing date or as
soon thereafter as feasible. Upon consummation, the Company shall deliver all
leases, files and other documents related to such property. All sales shall be
on an as-is, where-is basis with no representations or warranties made by the
Company, except that the Company shall represent and warrant to the effect that
(i) it has requisite power and authority to transfer the Acquired Property
to SL Green and (ii) the interest conveyed by the Company in the Acquired
Property is free and clear of liens (other than liens in place at the time the
Company acquired such Acquired Property).

 

In the case of a sale under (iii), the Company will
promptly appoint an appraiser. The two selected appraisers shall complete their
appraisals within 20 days and submit their appraisals to the third appraiser
selected jointly by them. The third appraiser shall select one of the
appraisals within ten (10) days thereafter, and the appraised value shall be
the price at which SL Green shall have the right to 

 

3

 

purchase the Acquired Property. All appraisers shall
have a minimum of ten (10) years’ experience in appraising property similar to,
and in the area of, the Acquired Property, and shall be MAI certified.

 

(b)                                 Right
of First Offer -- Distressed Debt. If at any time the Company plans to sell
any interest it owns in Distressed Debt (the “Offered Asset”), the Company
shall first give SL Green written notice of the terms and conditions, including
the price and any other material terms and conditions on which the Company is
willing to sell the Offered Asset. SL Green shall have the right, exercisable
by written notice to the Company within ten (10) business days after the date
the notice was delivered to the Company, to agree to purchase the Offered Asset
upon the terms and conditions contained in the notice. If SL Green exercises
such right, then the Company shall sell the Offered Asset to SL Green on such
terms and conditions, and subject to customary representations and warranties. In
the event that SL Green does not exercise its right as aforesaid, the Company
shall have the right to sell the Offered Asset to any other person within six
(6) months thereafter at not less than 99% of the offered price and otherwise
on substantially the same terms and conditions as were offered to SL Green. If
the Offered Asset is not sold in such time frame or otherwise as aforesaid,
then any plan by the Company to sell such Offered Asset shall again be subject
to this Section 3(b). In the event that SL Green shall have exercised its right
to purchase the Offered Asset and SL Green defaults in the purchase of the
Offered Asset on the agreed terms, SL Green shall be deemed to have waived its
rights under this Section with respect to the Offered Asset, and the Company
shall thereafter have the right to sell the Offered Asset to any other person
without restrictions.

 

(c)                                  Right
of First Offer -- Fixed Income or Preferred Equity Investment. If at any
time SL Green plans to sell to a third party any Fixed Income Investment or
Preferred Equity Investment (the “Offered Investment”), SL Green shall, unless
the Offered Investment is held in a joint venture, first give the Company written
notice of the terms and conditions, including the price and any other material
terms and conditions on which SL Green is willing to sell to a third party the
Offered Investment, provided, however, that if SL Green is
required to obtain any other party’s consent in connection with any sale of an
Offered Investment, then Gramercy’s right of first offer provided in this
Section 3(c) shall be subject to such consent. The Company shall have the
right, exercisable by written notice to SL Green, to purchase the Offered
Investment within ten (10) business days (the “Offer Period”) after the date
the notice was delivered to the Company, upon the terms and conditions
contained in the notice, without regard to any proposed closing date for any
third party contained in such notice. If the Company exercises such right, then
the Company shall purchase the Offered Investment within the Offer Period on
such terms and conditions, and subject to customary representations and
warranties. In the event that the Company does not purchase the Offered
Investment as aforesaid, SL Green shall have the right to sell the Offered
Investment to a third party within six (6) months thereafter at not less than
99% of the offered price and otherwise on substantially the same terms and conditions
as were offered to the Company, without regard to the Offer Period. If the
Offered Investment is not sold in such time frame or otherwise as aforesaid,
then any plan by SL Green to sell such Offered Investment shall again be
subject to this Section 3(c). In the event that the Company shall have
exercised its right to purchase the Offered Investment and the Company defaults
in the purchase of the Offered Investment on the agreed terms, the Company
shall be deemed to have waived its rights under this Section 3(c) with respect
to the Offered Investment, and SL Green shall thereafter have the right to sell
the Offered Investment to any other person without restrictions. Notwithstanding
anything in the foregoing to the contrary, the provisions of this Section 3(c)
shall not apply to any sale, transfer, conveyance or similar event, of a Fixed
Income Investment or Preferred Equity Investment to the debtor or issuer, as
the case may be, or any of their affiliates.

 

4.               SL
Green’s Right to Purchase Additional Shares/Units. If after the date hereof
the Company desires to sell or issue or cause to be sold or issued any shares
of the Company’s common stock, $.001 par value (the “Shares”), common units of
limited partnership interest in the Operating Partnership (“Units”) or other
securities convertible into or exchangeable for Shares or Units (“Convertible

 

4

 

Securities”) in connection with any private or public
offering, any merger, consolidation or similar business combination transaction
or any sale of all or substantially all of the assets of the Parent or the
Operating Partnership, SL Green shall have the right (but not the obligation)
to purchase up to 25% of any such Shares, Units or Convertible Securities, as the
case may be. The Company shall give SL Green at least five days’ written notice
of any proposed sale or issuance setting forth all of the material terms
thereof, and SL Green shall confirm in writing its intention to purchase, and
the number of Shares, Units or Convertible Securities, as the case may be, SL
Green intends to purchase, not more than three days after such notice is
received. If SL Green shall fail to confirm its intent to purchase as required
in the previous sentence, its right to purchase Shares, Units or Convertible
Securities, as the case may be, in that sale or issuance, as applicable (but
not any future sale or issuance), shall be waived. Any purchase by SL Green
under this Section 4 shall be in cash at the same price per Share, Unit or Convertible
Security, as the case may be, to be received by the Company, and with the same
representations, warranties and other terms and conditions as are offered to
other purchasers, and SL Green’s purchase shall close simultaneously with sales
or issuances to other purchasers.

 

5.               REIT
Status. The Parent shall use its best efforts to operate as a real estate
investment trust (a “REIT”) under Section 856 of the Internal Revenue Code of
1986, as amended (the “Code”) during each taxable year.

 

6.               Protective
TRS Election. The Parent shall make an annual protective election jointly
with SL Green Realty Corp. (“SLG REIT”) for the Parent to be a “taxable REIT
subsidiary,” as defined in Section 856(l)(1) of the Code, of SLG REIT by
executing an Internal Revenue Service Form 8875 (or any successor form), which
election shall state that it is to be effective only if the Parent does not
qualify as a REIT for any period covered by such election. The Parent shall
deliver such executed form to SLG REIT with respect to each year no later than
January 21 of each year for execution and filing by SLG REIT.

 

7.               Legal
Opinion. Not later than January 21 of each year, the Parent, at its cost,
shall cause its tax counsel, which shall be Clifford Chance US LLP or such
other law firm of national reputation as is reasonably acceptable to SLG REIT,
to issue an opinion to SLG REIT to the effect that, for the period commencing
January 1 and ending on December 31 in the preceding year, the Parent has
qualified as a REIT and the Parent’s method of operating will enable the Parent
to continue to qualify as a REIT. Such opinion shall be in form and substance
reasonably satisfactory to SL Green, may rely on customary assumptions and
representations from the Parent as to its organization, ownership and method of
operating, and shall provide that counsel to SLG REIT may rely on such opinion
for purposes of such counsel’s opinion as to the status of SLG REIT as a REIT. The
Parent, at its cost, also shall cause such tax counsel, from time to time, to
issue such an opinion to SLG REIT within ten (10) business days of its receipt
of a request therefor from SLG REIT.

 

8.               Other
Parent Obligations.

 

(a)                                  The
Parent or its successor, as the case may be, shall provide in its bylaws for a
continued election that Title 3, Subtitle 7 of the Corporations and
Associations Article of the Annotated Code of Maryland (or any successor
statute) shall not apply to any acquisition of Shares of the Parent or its
successor, as the case may be, by SL Green, with respect to Shares (or other
securities convertible into or exchangeable for Shares) (i) presently owned by
SL Green, (ii) acquired in the future by SL Green in connection with the rights
granted to SL Green pursuant to Section 4 of this Agreement or any other agreement
with the Company, or (iii) acquired pursuant to any approval or consent of the
Parent’s Board of Directors. For the avoidance of doubt, the Parent or its
successor, as the case may be, shall in no way alter or amend its bylaws to
adversely affect such election, with respect to such Shares (or other
securities convertible into or exchangeable for Shares) owned by SL Green as
described in the preceding sentence;

 

5

 

(b)                                 The
Parent or its successor, as the case may be, shall not adopt any resolution
amending, altering or repealing, or take any action with the effect of
amending, altering or repealing, the resolution exempting Parent from the
provisions of Title 3, Subtitle 6 of the Corporations and Associations Article
of the Annotated Code of Maryland (or any successor statute) (the “Business
Combination Act”) in a manner that would have the effect of making SL Green an
interested stockholder (as defined in the Business Combination Act) or
preventing or delaying any business combination (as defined in the Business
Combination Act) involving SL Green, with respect to Shares (or other
securities convertible into or exchangeable for Shares) (i) presently owned by
SL Green, (ii) acquired in the future by SL Green in connection with the rights
granted to SL Green pursuant to Section 4 of this Agreement or any other
agreement with the Company, or (iii) acquired pursuant to any approval or
consent of the Parent’s Board of Directors; and

 

(c)                                  For
so long as the Parent’s Shares shall be listed on the New York Stock Exchange,
the Parent shall obtain stockholder approval for the preemptive rights granted
to SL Green pursuant to Section 4 of this Agreement, and shall obtain such
stockholder approval at least once during each subsequent five-year period that
begins one day after the end of the preceding five-year period. In order to
effectuate the foregoing, the Parent shall include a proposal for its
stockholders to approve the preemptive rights granted to SL Green pursuant to
Section 4 of this Agreement, in its proxy statement in respect of the last
annual stockholder meeting that is to be held by the Parent during any such
five-year period.

 

9.               Term. This
Agreement shall remain in full force and effect throughout the term of the
Management Agreement as extended in accordance therewith, and terminate
(a) simultaneously with the expiration or earlier termination of the
Management Agreement or (b) on 30 days’ notice by SL Green to the Company
in the event that neither SL Green nor any of its affiliates shall be the
managing member of the Manager. In the event of a termination pursuant to
Section 8(b) hereof or termination of the Management Agreement pursuant to
Section 13(c) of the Management Agreement, then the terms and conditions of
Section 1 shall survive such termination for a period of one year with respect
only to any potential investment described in Section 1 as to which, at the
time of termination, Manager has commenced due diligence. Further, the terms
and conditions of Sections 5, 6, and 7 hereof shall survive the termination of
this Agreement and the Management Agreement for as long as SL Green continues
to own or has the right to acquire pursuant to outstanding convertible
securities at least 10% of the Shares of the Parent then outstanding.

 

10.   Notices. All notices,
requests, demands and other communications required or permitted hereunder
shall be in writing and mailed, faxed or delivered by hand or courier service:

 

(a)          If to the Company, to:

 

Gramercy Capital Corp.

420 Lexington Avenue

New York, New York 10170

Attention: Office of General Counsel

 

6

 

(b)         If to
SL Green, to:

 

SL Green Operating Partnership, L.P.

420 Lexington Avenue

New York, New York 10170

Attention: General Counsel

 

11.         Entire
Agreement. Except for the applicable provisions of the Management
Agreement, this Agreement shall constitute the entire agreement among the
parties relating to the subject matter hereof and shall supersede all other
prior or contemporary agreements, understandings, negotiations and discussions
whether oral or written.

 

12.         Amendment
and Modification. Neither this Agreement nor any of the terms or provisions
hereof may be changed, supplemented, waived or modified except by a written
instrument executed by the parties hereto (or in the case of a waiver, by the
party granting such waiver).

 

13.         Counterparts.
This Agreement may be executed in two or more counterparts, each of which may
be signed by any of the parties hereto, each of which shall be deemed an
original and all of which together shall constitute one and the same
instrument.

 

14.         Governing
Law. This Agreement and all questions relating to its validity,
interpretation, performance and enforcement shall be governed by, construed,
interpreted and enforced in accordance with the internal laws of the State of
New York, without regard to any conflicts of laws principles thereof.

 

15.         Invalid
Provisions. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under present or future laws, such provision shall be
fully severable, this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof
and the remaining provisions of this Agreement shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom.

 

7

 

IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement as of the day and year first written above.

 

 

	
   

  	
  GRAMERCY CAPITAL CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SL GREEN OPERATING
  PARTNERSHIP, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

8

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