Document:

Exhibit 10.2

 

EXECUTION COPY

 

SPECIAL RIGHTS AGREEMENT

 

THIS SPECIAL RIGHTS
AGREEMENT (this “Agreement”), dated as of April 24, 2009 is made by
and between Gramercy Capital Corp., a Maryland corporation (the “Parent”),
SL Green Operating Partnership, L.P., a Delaware limited partnership (“SL
Green OP”), and  SL Green Realty
Corp., a Maryland corporation (“SLG” and collectively with SL Green OP
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”) had engaged GKK Manager LLC, a
Delaware limited liability company (the “Manager”), to provide certain
management services to the Company pursuant to that certain Management
Agreement dated as of August 2, 2004, as amended and restated from time to
time, including by that certain Second Amended and Restated Management Agreement,
dated as of October 27, 2008 (the “Management Agreement”) by and
among the Parent, the Operating Partnership and the Manager;

 

WHEREAS, immediately prior
to the Internalization (as defined below), SL Green OP owned, directly and
indirectly, 100% of the limited liability company membership interests in the
Manager;

 

WHEREAS, the Parent and SL
Green OP entered into that certain Amended and Restated Origination Agreement,
dated as of April 19, 2006, to address certain elements of the
relationship between the Company and SL Green (the “Origination Agreement”);

 

WHEREAS, the Operating
Partnership, the Parent, SL Green OP and SLG entered into that certain Services
Agreement, dated as of October 27, 2008, to make certain arrangements for
the provision of certain services in connection with the future management and
operations of the Company (the “Services Agreement”);

 

WHEREAS, concurrently with
the execution of this Agreement, the Parent, the Operating Partnership, SL
Green OP, GKK Manager Member Corp., a Delaware corporation (“Manager Corp”),
and, with respect to certain sections as listed in the Securities Transfer
Agreement (as defined below), SLG are entering into that certain Securities
Transfer Agreement, dated as of the date hereof (the “Securities Transfer
Agreement”) whereby SL Green OP and Manager Corp are transferring all of
their respective direct limited liability company membership interests in the
Manager to the Operating Partnership and SL Green OP is transferring all of its
Class B Units of the Operating Partnership to the Operating Partnership
(the “Internalization”);

 

WHEREAS, pursuant to the
Securities Transfer Agreement, the Company and SL Green OP have terminated the
Origination Agreement and the Services Agreement; and

 

WHEREAS, in connection with
the Internalization, SL Green and the Company have agreed to enter into this
Agreement to set forth certain rights and obligations as between the parties
hereto.

 

 

AGREEMENT

 

NOW THEREFORE, in
consideration of the mutual agreements set forth herein, and intending to be
legally bound, the parties hereto agree as follows:

 

1.             Management Information Systems Services.

 

(a)           SL Green shall provide
Management Information Systems (“MIS”) services to the Company from the
date hereof through the date that is 90 days from the date hereof (the “MIS
Term”).  In full consideration for SL
Green’s obligations pursuant to this Section 1, during the MIS Term, the
Company shall pay SL Green OP a monthly fee of $25,000 in cash (in immediately
available funds) (the “MIS Fee”). 
The MIS Fee shall be paid
on the first day of each calendar month during the MIS Term; provided, that the first payment shall be due on the date
hereof and any payment paid during a calendar month where MIS services will be
performed for only a portion of the calendar month shall be pro-rated for such
partial calendar month.  Upon 5 days written notice, the Company shall
have the right to  terminate this Section 1
and the Company shall be refunded by SL Green OP for the portion of the MIS Fee
that was paid in respect of the period of time following such termination.  In the event that any portion of the MIS Fee
is due and outstanding for a period in excess of 5 days, SL Green shall have
the right to terminate this Section 1 without any prior notice.

 

(b)           The provision of MIS
services shall mean that SL Green shall (i) cooperate with, and assist,
the Company in separating the help desk and technical support functions of SL
Green and the Company, assist with the transfer to the Company of all MIS support
center/helpdesk functions performed by SL Green, and assist with the transfer
to SL Green of all MIS support center/helpdesk functions performed by the
Company, (ii) assist with the transfer of any data of the Company and its
subsidiaries from SL Green’s data servers to the Company’s servers, (iii) assist
with the  transfer of any data of SL
Green and its subsidiaries from the Company’s data servers to SL Green’s data
servers and (iv) prior to completion of the items set forth in clauses (i) through
(iii), provide substantially the same MIS services to the Company and its
subsidiaries as provided immediately prior to the date hereof.

 

2.             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.

 

3.             Protective TRS Election. The Parent
shall make an annual protective election jointly with SLG for the Parent to be
a “taxable REIT subsidiary,” as defined in Section 856(l)(1) of the
Code, of SLG 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 with respect to each
year no later than January 21 of each year for execution and filing by
SLG.

 

4.             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, to issue an opinion to SLG 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 may rely on such opinion for purposes of such counsel’s
opinion as to the status of SLG 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
within 10 business days of its receipt of a request therefor from SLG.

 

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5.             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 common stock, $.001 par value of the Parent or its
successor (the “Shares”), 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 or (ii)  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.

 

(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 or (ii) acquired
pursuant to any approval or consent of the Parent’s Board of Directors.

 

6.             Term.  Other than Section 1 hereof, which shall
terminate as provided in such section, this Agreement shall remain in full
force and effect for as long as SL Green continues to own at least 7.5% of the
Shares of the Parent then outstanding.

 

7.             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: Robert R. Foley

  
			

 

	
  (b)

  	
  If to SL Green, to:

  
	
   

  
	
   

  	
  SL Green Operating Partnership, L.P.

  
	
   

  	
  420 Lexington Avenue

  
	
   

  	
  New York, New York 10170

  
	
   

  	
  Attention: Andrew S. Levine

  
			

 

8.             Entire Agreement. This Agreement
and the Securities Transfer Agreement supersede all prior and contemporaneous
discussions and agreements, both written and oral, among the parties with
respect to the subject matter of this Agreement, the Special Servicing
Agreement (as defined in the Securities Transfer 

 

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Agreement) and the Securities Transfer
Agreement and constitute the sole and entire agreement among the parties to
this Agreement with respect to the subject matter of this Agreement.

 

9.             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).

 

10.           Counterparts. This Agreement may be
signed in any number of identical counterparts, each of which shall be an
original (including signatures delivered via facsimile or electronic mail) with
the same effect as if the signatures thereto and hereto were upon the same
instrument.  The parties hereto may
deliver this Agreement and the other documents required to consummate the
transaction contemplated herein by facsimile or electronic mail and each party
shall be permitted to rely upon the signatures so transmitted to the same
extent and effect as if they were original signatures.  This Agreement shall become effective when
each party hereto shall have received a counterpart hereof signed by each other
party hereto.

 

11.           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.

 

12.           Invalid
Provisions. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under any present or future law, and if the rights or
obligations of any party hereto under this Agreement will not be materially and
adversely affected thereby, (a) such provision will be fully severable, (b) this
Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom and (d) in lieu of such illegal, invalid or
unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.

 

4

 

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

 

 

	
   

  	
  GRAMERCY CAPITAL CORP.,

  
	
   

  	
  a
  Maryland corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Roger M. Cozzi

  
	
   

  	
   

  	
  Name: Roger M. Cozzi

  
	
   

  	
   

  	
  Title: Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  SL GREEN REALTY CORP., a Maryland

  corporation, on its own behalf and as general partner

  of SL GREEN OPERATING PARTNERSHIP,

  L.P., a Delaware limited
  partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew S. Levine

  
	
   

  	
   

  	
  Name: Andrew S. Levine

  
	
   

  	
   

  	
  Title: Chief Legal Officer

  

 

Signature Page to Special
Rights AgreementExhibit
10.3

 

Execution
Version

 

EMPLOYMENT AND NONCOMPETITION AGREEMENT

 

This EMPLOYMENT AND NONCOMPETITION AGREEMENT
(“Agreement”) is made as of the 27th day of October, 2008, between Roger Cozzi
(“Executive”) and GKK Manager LLC, a Delaware limited liability company (the “Employer”),
to be effective as of October 28, 2008 (the “Effective Date”).

 

1.             Term.  The term of this Agreement shall commence on
the Effective Date and shall continue through, and terminate on, December 31,
2011 (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 Executive Officer of Gramercy Capital
Corp. (“Gramercy”) and, for so long as so elected, as a voting member of the
Board of Directors of Gramercy (the “Board”). 
In his capacity as Chief Executive Officer, Executive’s duties and
authority shall be those as would normally attach to Executive’s position as
Chief Executive 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
Executive Officer of Gramercy.  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.  Notwithstanding the
foregoing, Executive shall be entitled to maintain the investments disclosed on
Schedule I attached hereto.

 

(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 $500,000 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.

 

(b)           Signing Bonus; 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 each year after 2008 shall be at least
$800,000; 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), provided
that, in 2009, the Employer will pay $250,000 of Executive’s bonus in advance
on June 30, 2009.  In lieu of a
bonus for 2008, the Employer shall pay Executive a signing bonus of $200,000
(the “Signing Bonus”) on the 30th day
following the Effective Date; provided that Executive remains employed by the
Employer on such date.

 

(c)           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.

 

(d)           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.

 

(e)           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.

 

(f)            Other Benefits. 
During the Employment Period, the Employer shall provide to Executive
such other benefits, as generally made available to other senior executives of
the Employer.  In addition, the Employer shall maintain
term life insurance for the benefit of Executive’s beneficiaries in a face
amount equal to $5,000,000; provided, however, that such coverage shall only be
required if available to the Employer at reasonable rates; and provided,
further, that Executive cooperates as reasonably requested by the Employer in
the Employer’s efforts to obtain such insurance.  If such insurance is not available at
reasonable rates, then the 

 

2

 

Employer
shall provide such coverage on a self-insured basis, with a benefit to
Executive’s beneficiaries not to exceed the amount of cash severance that
Executive would receive upon a termination by the Employer without Cause (as
defined in Section 6(a)(iii) below) under Section 7(a)(i) and
(ii).

 

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, 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 (to extent Executive served or is serving in such capacity
at the request of the Employer) or any affiliate thereof for which he may serve
in such capacity; provided however, that, to the extent the indemnification
provided for herein relates to a Proceeding in which Executive is made a party
or threatened to be made a party or is otherwise involved in his capacity as an
officer or director, or former officer or director, of Gramercy, the Employer
will only provide such indemnification to the extent that Gramercy does not do
so.  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 maintained by SL Green Realty Corp., for such time as SL Green Realty
Corp. controls the Employer.  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 

 

3

 

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.

 

(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 Executive Officer of Gramercy, shall include the
appointment of another person as co-Chief Executive Officer of Gramercy),
except in connection with the termination of Executive’s employment for Cause,
disability, retirement or death;

 

(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 

 

4

 

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.

 

(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 

 

5

 

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

 

Notwithstanding the
foregoing, a Change-in-Control shall not be deemed to have occurred if 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) or one of its direct or indirect
subsidiaries continues to be the external manager of Gramercy at the applicable
time.

 

(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”), which date shall not be more than thirty (30) days after 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.

 

(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 as a director of Gramercy, and shall resign all other 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.

 

6

 

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
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
twelve (12) 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) if the
Termination Date is during 2009 or any later year, 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 $800,000 (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 number of days in the prior
fiscal year (other than 2008), in the event that Executive’s annual cash bonus
for such year had not been determined as of the Termination Date) and the
denominator of which is 365, and (B) an annual performance bonus (the “Additional
12-Month Bonus”) for the 12 months following the Termination Date (or, if
shorter, the portion of such period that is in 2009 or a later year) equal to
the Prior Annual Bonus (or a prorated portion thereof to the extent such period
is shortened in accordance with the previous parenthetical); provided that the
amounts set forth in (A) and (B) above shall be 

 

7

 

reduced
by the amount of any annual performance bonus, or advance thereof, previously
paid for the periods set forth in (A) and (B) above.  In addition, if the Termination Date occurs
prior to the payment of the Signing Bonus, the Employer shall also pay
Executive the Signing Bonus.  Such payments
shall be made on the later of (A) the dates the Employer would have
otherwise paid such annual performance bonuses and the Signing Bonus, if
applicable, 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 twelve (12) 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).

 

(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 “12 months” in the salary
and bonus continuation provisions set forth in Section 7(a)(i) and (ii) above
will be replaced with “24 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.

 

8

 

(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, (B) if the Termination Date is during 2009 or any
later year, 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 and (C) if the Termination Date
occurs prior to the payment of the Signing Bonus, the Signing Bonus; provided
that any amounts payable under clauses (B) and (C) above shall be
reduced dollar-for-dollar by the amount received by Executive’s beneficiaries
under the life insurance (or self-insurance) provided pursuant to the second
and third sentences of Section 3(f).

 

(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.

 

9

 

(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 twelve (12)
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) if the Termination Date is during 2009 or any later year,
the Prorated Annual Bonus and (B) the Additional 12-Month Bonus; provided
that the Prorated Annual Bonus and Additional 12-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 12-Month Bonus.  In addition,
if the Termination Date occurs prior to the payment of the Signing Bonus, the
Employer shall also pay Executive the Signing Bonus.  The Employer shall make such payments of the
Prorated Annual Bonus, the Additional 12-Month Bonus and the Signing Bonus, if
applicable, on the later of (x) the dates the Employer would have
otherwise paid such annual performance bonuses and the Signing Bonus, if
applicable, 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
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 twelve (12) months after the Termination Date,
subject to the terms and conditions upon which such 

 

10

 

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 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 

 

11

 

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 one-year 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 one year 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 one
year period shall only be six 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 $800,000 and (C) such one year 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
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 

 

12

 

(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 (i) set forth on Schedule I attached hereto; (ii) 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.  Additionally, during the Employment Period,
for so long as either:  (i) Gramercy
is externally advised by the Employer, SL Green Realty Corp. or a direct or indirect
majority owned subsidiary of the Employer or SL Green Realty Corp. (and is not self-managed)
or (ii) the Employer, together with SL Green Realty Corp. or direct or indirect
majority owned subsidiary of the Employer or the SL Green Realty Corp., directly or indirectly
owns securities representing 20% or more of the outstanding common equity of
Gramercy, Executive shall be permitted to serve as an officer of Gramercy
notwithstanding anything to the contrary contained in this Section 8.

 

(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.

 

(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 

 

13

 

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.

 

(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 

 

14

 

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:

 

Roger
Cozzi, at the address shown on the execution page hereof.

 

and:

 

Hoguet
Newman Regal & Kenney, LLP

10
East 40th Street

New
York, New York 10016

Attention:  Laura B. Hoguet

 

(b)           if to the Employer:

 

GKK Manager LLC

420 Lexington Avenue

New York, New York 10170

Attn: Corporate Secretary

 

and:

 

Goodwin
Procter LLP

Exchange
Place

Boston,
Massachusetts  02109

Attention:  Daniel Adams

 

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.

 

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 

 

15

 

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.

 

16

 

(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]

 

17

 

IN WITNESS WHEREOF, this Agreement is entered into
as of the date and year first written above, and is being executed on October 27,
2008.

 

 

	
   

  	
  GKK
  MANAGER LLC

  
	
   

  	
   

  
	
   

  	
  By:  GKK
  Manager Member Corp., its 

  managing member

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marc Holliday

  
	
   

  	
   

  	
  Name:
  Marc Holliday

  
	
   

  	
   

  	
  Title:
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Roger Cozzi

  
	
   

  	
  Name:
  Roger Cozzi

  

 

[Signature Page to
Employment and Noncompetition Agreement]

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