Document:

Unassociated Document

    AMENDMENT TO AMENDED AND
RESTATED SENIOR

    MEZZANINE LOAN
AGREEMENT

    

    This
Amendment to Amended and Restated Senior Mezzanine Loan Agreement (this “Amendment”), dated as
of March 9, 2010, by and among KBS DEBT HOLDINGS, LLC, a Delaware limited
liability company (together with its successors and assigns, including any
lawful holder of any portion of the Indebtedness, “Lender”), and
REQUIRED EQUITY PLEDGOR (as defined in the Loan Agreement), AMERICAN FINANCIAL
REALTY TRUST, a Maryland real estate investment trust (“AFRT”), GKK STARS
ACQUISITION LLC, a Delaware limited liability company (“AFRT Owner”), FIRST
STATES GROUP, L.P., a Delaware limited partnership (“Operating
Partnership”), FIRST STATES GROUP, LLC, a Delaware limited liability
company (“Operating
Partnership GP” and together with Operating Partnership, Required Equity
Pledgor, AFRT, AFRT Owner and Operating Partnership, collectively, jointly and
severally, together with their respective permitted successors and assigns,
“Borrower”),
amends that certain Amended and Restated Senior Mezzanine Loan Agreement, dated
as of August 22, 2008 (the “Loan Agreement”; all
capitalized terms used but not defined herein shall have the respective meanings
given such terms in the Loan Agreement).

    

    WHEREAS,
Lender and Borrower desire to amend the Loan Agreement with respect to the
matters set forth herein.

     

    NOW
THEREFORE, in consideration of the mutual premises contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby represent, warrant, covenant and agree
as follows:

     

    Section
1.   Amendments of Loan
Agreement.  Lender and Borrower hereby agree to amend the terms
of the Loan Agreement as hereinafter set forth:

     

    (a)           The
defined term “LIBOR Strike Rate” is hereby deleted in its entirety and the
following is inserted in lieu thereof:

     

    ““LIBOR Strike Rate”
means (1) with respect to the Initial Interest Rate Cap Agreement, 5.25%; and
(2) with respect to any Extension Interest Rate Cap Agreement,
2.00%.”

     

    (b)          The
defined term “Major Lease” is hereby deleted in its entirety and the following
is inserted in lieu thereof:

     

    ““Major Lease” means
the Lease covering the Dana Portfolio on the date hereof, as amended or modified
in accordance herewith, and any Lease which (i) when aggregated with all other
Leases at the applicable Property with the same Tenant (or affiliated Tenants),
and assuming the exercise of all expansion rights and all preferential rights to
lease additional space contained in each such Lease, is expected to contribute
more than 7.5% of Net Operating Income during any 12-month period (after
adjustment to eliminate the effect of free rent periods), (ii) is with an
Affiliate of Borrower or a Property Owner as Tenant, (iii) requires an
expenditure by landlord of $1,000,000 or more with respect to Tenant
Improvements and/or Leasing Commissions applicable to such Lease, or (iv) is
entered into during the continuance of an Event of Default.”

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    (c)           The
following definitions are hereby inserted in the “DEFINITIONS” section of the
Loan Agreement in alphabetical order:

     

    ““Permitted
Distributions” means:

     

     (1)
a single distribution from the Qualified Operating Account to reimburse Sponsor
for costs and expenses related to compliance with Section 1.2(b) of the
Loan Agreement, the Junior Mezzanine Loan Agreement and the Mortgage Loan
Agreement and the related amendments of such loan agreements, provided that such
distribution does not cause the amount contained in the Qualified Operating
Account to be less than $5,000,000; and

     

    (2)
without regard to the distribution described in preceding clause (1),
distributions from the Qualified Operating Account, to the extent such
distributions (i) do not exceed $2,500,000 per Fiscal Quarter in the aggregate,
and (ii) are used solely for the purpose payment (or reimbursement) of corporate
overhead actually incurred and allocated to AFRT.”

     

    ““Qualified Operating
Account” means the account identified as follows:

     

    
      
        	
                Account
      Holder

              	
                First
      States Group

                680
      Old York Road

                Jenkintown,
      PA 19046

              
	 
      	 
      
	
                Bank

              	
                Wachovia
      Bank N.A.

              
	 
      	 
      
	
                Account
      Number

              	
                2000011520836

              
	 
      	 
      
	
                ABA
      Number

              	
                031
      201 467”

              

      

    

     

    ““Qualified Operating Account
Control Agreement” means an agreement relating to the Qualified Operating
Account, among Lender, Junior Mezzanine Lender, the holder of such account and
the Eligible Institution at which such account is maintained, pursuant to which
such account is pledged to Lender and Junior Mezzanine Lender and Borrower is
given full access to the funds on deposit therein but provides for the
discontinuance of such access upon receipt by such Eligible Institution of
written notice from Servicer of the occurrence and continuance of an Event of
Default or Junior Mezzanine Loan Event of Default, as such agreement may be
amended, modified, supplemented, or replaced in accordance
herewith.”

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (d)                Section
3.2(a) of the Loan Agreement is hereby modified by deleting the last sentence
thereof.

     

    (e)                Section
3.2(b)(v) of the Loan Agreement is hereby deleted in its entirety and the
following is inserted in lieu thereof:

     

    “(v)      
if the Junior Mezzanine Loan is no longer outstanding, all remaining amounts to
the Qualified Operating Account, unless a Mortgage Loan Event of Default shall
have occurred and be continuing, in which case, all remaining amounts to the
Mortgage Loan Cash Management Account.”

     

    (f)                 Section
3.5 of the Loan Agreement is hereby deleted in its entirety and the following is
inserted in lieu thereof:

     

    “3.5.  Qualified Operating Account;
No Distributions.

     

    (a)         Borrower
shall cause the Qualified Operating Account to be maintained at all
times.  Borrower shall (i) cause all amounts payable with respect to
operating expenses for the Properties to be paid exclusively from the Qualified
Operating Account, accounts that sweep on a daily basis into the Qualified
Operating Account and accounts established pursuant to the Encumbered Property
Debt Documents (and from no other accounts), (ii) not permit excess cash
attributable to the Properties or the operations of AFRT to be contained in any
account other than the Qualified Operating Account, accounts that sweep on a
daily basis into the Qualified Operating Account or accounts established
pursuant to the Encumbered Property Debt Documents and (iii) not permit the
amounts contained in the Qualified Operating Account to be used for any purpose
other than in connection with the Properties and the making of Permitted
Distributions.  Borrower shall not permit any distributions, transfers
or disbursements to be made from the Qualified Operating Account (or any other
account containing funds related to the Properties and/or the operations of
AFRT) to the direct or indirect equityholders in Junior Mezzanine Borrower,
except for Permitted Distributions.  In the event that any
distribution described in clause (2) of the definition of “Permitted
Distribution” shall be in excess of the amount required to pay the corporate
overhead of AFRT for the period for which such Permitted Distribution was made
(as a result of such overhead being less than the amount budgeted therefor),
Borrower shall cause such excess to be promptly returned to the Qualified
Operating Account.  Borrower shall deliver to Lender each month the
monthly bank statement related to the Qualified Operating Account.

     

    (b)         Within
10 days after receipt of a written request from Lender and Junior Mezzanine
Lender, Borrower shall use its good faith commercially reasonable efforts to
cause the Qualified Operating Account to be subject to a Qualified Operating
Account Control Agreement reasonably acceptable to Lender and Junior Mezzanine
Lender; provided that, in the event that Borrower is unable to cause the
institution at which the Qualified Operating Account is held to promptly enter
into such an agreement, Borrower shall replace the Qualified Operating Account
with an Eligible Account at another Eligible Institution that will enter into
such an agreement within 30 days after Borrower’s receipt of such written
request (in which case, such replacement account shall be deemed to be the
“Qualified Operating Account for all purposes hereunder).”

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (g)                Section
5.14 of the Loan Agreement is hereby modified by inserting the following
immediately after clause (iv) thereof:

     

    “Notwithstanding
anything to the contrary contained in this Section 5.14, from
and after the first day of the Extension Term, without further request from
Lender, Borrower shall deliver to Lender the monthly reports described in this
Section 5.14
for each month until the Indebtedness has been repaid in full.  All
such reports shall include, in addition to the information described above,
monthly cash flow statements tied to bank statements, including a reconciliation
of beginning cash balances to ending cash balances (including, without
limitation, a reconciliation of the Qualified Operating Account as to income
from rents, operating expenses, Tenant Improvements and Leasing Commissions,
Permitted Distributions and such other items as Lender shall reasonably
request).”

     

    (h)                Section
5.23 of the Loan Agreement is hereby modified by inserting the following
immediately after the last sentence thereof:

     

    “Without
in any way limiting the requirements of this Section 5.23,
Borrower shall not permit any funds constituting Distributions to be swept
through, or concentrated in, any account other than the Qualified Operating
Account, accounts that sweep on a daily basis into the Qualified Operating
Account and accounts established pursuant to the Encumbered Property Debt
Documents, prior to such funds being remitted to the Cash Management Account in
accordance with this Section
5.23.”

     

    (i)                 The
following Section 5.25 is hereby inserted immediately following Section 5.24 of
the Loan Agreement:

     

    “5.25.  Business
Plan.  Within 90 days after the first day of the Extension
Term, Borrower shall deliver to Lender a comprehensive long-term business plan
and restructuring proposal addressing repayment of the Loan, in each case, in a
format, and containing a level of detail, reasonably acceptable to
Lender.  Such comprehensive long-term business plan and restructuring
proposal shall include, without limitation, (i) income statements, balance
sheets and cash flow statements prepared in accordance with GAAP, both on a
consolidated basis (i,e., GKK as a whole) and on a consolidating basis (i.e.,
the GKK finance  business versus the GKK real estate business), (ii)
individual Property-level projections, projected rent rolls and such other
projections as Lender shall reasonably request, (iii) a detailed narrative as to
all material operating, balance sheet and financing assumptions and (iv) such
other reports and components as Lender shall reasonably request.  To
the extent applicable, the foregoing shall be presented on a monthly basis for
the first 12 months of the period covered by such plans and on an annual basis
for the remainder of the period covered by such plans.”

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    Section
2.       Conditions
Precedent.  Contemporaneously with the execution and delivery
of this Amendment, Borrower shall comply with the conditions set forth in
Section 1.2(b) of the Loan Agreement, as modified by this Amendment (Lender
hereby acknowledging satisfaction of clause (i) thereof).  In
addition, the effectiveness of this Amendment is subject to the satisfaction of
the following conditions:

     

    (a)           On
the effective date of this Amendment, the Qualified Operating Account shall
contain no less than $5,000,000, and Borrower shall have delivered to Lender
reasonably satisfactory evidence thereof.

     

    (b)           Borrower
shall have paid or reimbursed Lender for all of its out-of-pocket costs and
expenses (including, without limitation, reasonable out-of-pocket legal fees)
related to the negotiation, execution and delivery of this Amendment and the
commencement of the Extension Term.

     

    (c)           Borrower
shall have delivered a fully executed copy of this Amendment to
Lender.

     

    Section
3.       Miscellaneous.

     

    (a)           All
of the terms and conditions of the Loan Agreement are incorporated herein by
reference with the same force and effect as if fully set forth
herein.  Except as expressly amended hereby, the Loan Agreement and
each of the other Loan Documents remains in full force and effect in accordance
with its terms.  For the avoidance of doubt, Borrower and Lender
acknowledge and agree that (i) subject to the satisfaction of the conditions set
forth in Section
2 hereof, the Maturity Date shall be the Payment Date in March 2011 or
such earlier date as may result from acceleration and (ii) Borrower has no
further options to extend the Maturity Date of the Loan.

     

    (b)           This
Amendment shall be governed by and construed and interpreted in accordance with
the laws of the State of New York, without regard to principles of conflicts of
law.

     

    (c)           Borrower
hereby (1) unconditionally ratifies and confirms, renews and reaffirms all
of its obligations under the Loan Agreement and each of the other Loan
Documents, (2) acknowledges and agrees that such obligations remain in full
force and effect, binding on and enforceable against it in accordance with the
terms, covenants and conditions of the Loan Agreement as amended hereby and the
other Loan Documents, in each case, without impairment, and (3) represents,
warrants and covenants that it is not in default under the Loan Agreement or any
of the other Loan Documents beyond any applicable notice and cure periods, and
there are no defenses, offsets or counterclaims against the
Indebtedness.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    (d)           Sponsor
hereby (1) unconditionally approves and consents to the execution by
Borrower of this Amendment and the modifications to the Loan Documents effected
thereby, (2) unconditionally ratifies, confirms, renews and reaffirms all of its
obligations under the Guaranty, the Environmental Indemnity and Cooperation
Agreement (the “Sponsor Documents”),
(3) acknowledges and agrees that its obligations under the Sponsor
Documents remain in full force and effect, binding on and enforceable against it
in accordance with the terms, covenants and conditions of such documents without
impairment, and (4) represents, warrants and covenants that it is not in
default under any Sponsor Document beyond any applicable notice and cure
periods, and there are no defenses, offsets or counterclaims against its
obligations under the Sponsor Documents.

     

    (e)           Borrower
acknowledges and agrees that no oral communication or course of dealing from or
on behalf of Lender shall constitute any waiver, agreement, commitment, or
evidence of any assurance or intention of Lender with respect to the Loan, the
Loan Agreement and/or the other Loan Documents, and that any waiver, agreement,
commitment, assurance, or intention of Lender with respect to the Loan, the Loan
Agreement and/or the other Loan Documents shall be effective only if in writing
and duly executed by Lender.  Borrower acknowledges and agrees that no
Default or Event of Default shall be waived by Lender, unless such waiver is in
writing and duly executed by Lender.

     

    (f)           This
Amendment may be executed by facsimile signatures and in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all of
which counterparts together shall constitute but one and the same
instrument.

     

    (g)           Lender
hereby consents to the execution of that certain Second Amendment to Loan
Agreement relating to the Mortgage Loan and that certain Amendment to Junior
Mezzanine Loan Agreement, each dated as of the date hereof, and the Mortgage
Lender and Junior Mezzanine Lender may rely on such consent for purposes of any
applicable intercreditor or co-lender agreement.

     

    [Signatures
appear on following page]

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, for good and valuable consideration, the sufficiency of which
is hereby acknowledged and agreed, the parties hereto have executed and
delivered this Amendment as of the date first hereinabove set
forth.

     

    
      
        
          
            
              	 
      	
                      BORROWER:

                    
	 
      	 
      
	 
      	
                      The
      entities listed on Schedule A to this

                    
	 
      	
                      signature
      page

                    
	 
      	 
      
	 
      	
                      By:

                    	
                      /s/ Timothy J. O'Connor

                    
	 
      	 
      	
                      Name:
      Timothy J. O'Connor

                    
	 
      	 
      	
                      Title:
      President

                    
	 
      	 
      
	 
      	
                      Solely
      with respect to Section 3(d)
      hereof:

                    
	 
      	 
      
	 
      	
                      SPONSOR:

                    
	 
      	 
      
	 
      	
                      GRAMERCY
      CAPITAL CORP., a Maryland corporation

                    
	 
      	 
      
	 
      	
                      By:

                    	
                      /s/ Timothy J. O'Connor

                    
	 
      	 
      	
                      Name:
      Timothy J. O'Connor

                    
	 
      	 
      	
                      Title:
      President

                    

            

          

        

      

    

    

    [Signatures continued on following
page]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      
        
          
            	 
      	
                    LENDER:

                  
	 
      	 
      
	 
      	 
      	
                    KBS
      DEBT HOLDINGS, LLC,

                  
	 
      	 
      	
                    a
      Delaware limited liability company

                  
	 
      	 
      	 
      
	 
      	 
      	
                    By:

                  	
                    KBS
      LIMITED PARTNERSHIP,

                  
	 
      	 
      	 
      	
                    a
      Delaware limited partnership, its

                    manager

                  
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                    By:

                  	
                    KBS
      REAL ESTATE INVESTMENT TRUST, INC.,

                  
	 
      	 
      	 
      	 
      	
                    a
      Maryland corporation,

                    its
      sole general partner

                  
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	
                    By:

                  	
                    /s/ Charles J. Schreiber,
  Jr

                  
	 
      	 
      	 
      	 
      	 
      	
                    Charles
      J. Schreiber, Jr.

                    Chief
      Executive OfficerUnassociated Document

    AMENDMENT TO JUNIOR
MEZZANINE LOAN AGREEMENT

    

    This
Amendment to Junior Mezzanine Loan Agreement (this “Amendment”), dated as
of March 9, 2010, by and between GOLDMAN SACHS MORTGAGE COMPANY, a New York
limited partnership (“GSMC”), CITICORP
NORTH AMERICA, INC., a New York corporation (“Citigroup”), and SL
GREEN REALTY CORP., a Maryland corporation (“SL Green”, and
together with GSMC, Citigroup and their respective successors and assigns,
including any lawful holder of any portion of the Indebtedness (as hereinafter
defined) collectively, “Lender”), and GKK
STARS JUNIOR MEZZ 2 LLC, a Delaware limited liability company (“Borrower”), amends
that certain Junior Mezzanine Loan Agreement, dated as of August 22, 2008 (the
“Loan
Agreement”; all capitalized terms used but not defined herein shall have
the respective meanings given such terms in the Loan Agreement).

     

    WHEREAS,
Lender and Borrower desire to amend the Loan Agreement with respect to the
matters set forth herein.

     

    NOW
THEREFORE, in consideration of the mutual premises contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby represent, warrant, covenant and agree
as follows:

     

    Section
1.  Amendments of
Loan Agreement.  Lender and Borrower hereby agree to amend the
terms of the Loan Agreement as hereinafter set forth:

     

    (a)       The
defined term “LIBOR Strike Rate” is hereby deleted in its entirety and the
following is inserted in lieu thereof:

     

    ““LIBOR Strike Rate”
means (1) with respect to the Initial Interest Rate Cap Agreement, 5.25%; and
(2) with respect to any Extension Interest Rate Cap Agreement,
2.00%.”

     

    (b)       The
defined term “Major Lease” is hereby deleted in its entirety and the following
is inserted in lieu thereof:

     

    ““Major Lease” means
the Lease covering the Dana Portfolio on the date hereof, as amended or modified
in accordance herewith, and any Lease which (i) when aggregated with all other
Leases at the applicable Property with the same Tenant (or affiliated Tenants),
and assuming the exercise of all expansion rights and all preferential rights to
lease additional space contained in each such Lease, is expected to contribute
more than 7.5% of Net Operating Income during any 12-month period (after
adjustment to eliminate the effect of free rent periods), (ii) is with an
Affiliate of Borrower, Senior Mezzanine Borrower or a Property Owner as Tenant,
(iii) requires an expenditure by landlord of $1,000,000 or more with respect to
Tenant Improvements and/or Leasing Commissions applicable to such Lease, or (iv)
is entered into during the continuance of an Event of Default.”

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    (c)        The
following definitions are hereby inserted in the “DEFINITIONS” section of the
Loan Agreement in alphabetical order:

     

    ““Permitted
Distributions” means:

     

     (1)
a single distribution from the Qualified Operating Account to reimburse Sponsor
for costs and expenses related to compliance with Section 1.2(b) of the
Loan Agreement, the Senior Mezzanine Loan Agreement and the Mortgage Loan
Agreement and the related amendments of such loan agreements, provided that such
distribution does not cause the amount contained in the Qualified Operating
Account to be less than $5,000,000; and

     

    (2)
without regard to the distribution described in preceding clause (1),
distributions from the Qualified Operating Account, to the extent such
distributions (i) do not exceed $2,500,000 per Fiscal Quarter in the aggregate,
and (ii) are used solely for the purpose payment (or reimbursement) of corporate
overhead actually incurred and allocated to AFRT.

     

    ““Qualified Operating
Account” means the account identified as follows:

     

    
      
        	
                Account
      Holder

              	
                First
      States Group

                680
      Old York Road

                Jenkintown,
      PA 19046

              
	 
      	 
      
	
                Bank

              	
                Wachovia
      Bank N.A.

              
	 
      	 
      
	
                Account
      Number

              	
                2000011520836

              
	 
      	 
      
	
                ABA
      Number

              	
                031
      201 467”

              

      

    

     

    ““Qualified Operating Account
Control Agreement” means an agreement relating to the Qualified Operating
Account, among Lender, Senior Mezzanine Lender, the holder of such account and
the Eligible Institution at which such account is maintained, pursuant to which
such account is pledged to Lender and Senior Mezzanine Lender and the Borrower
is given full access to the funds on deposit therein but provides for the
discontinuance of such access upon receipt by such Eligible Institution of
written notice from Servicer of the occurrence and continuance of an Event of
Default or Senior Mezzanine Loan Event of Default, as such agreement may be
amended, modified, supplemented, or replaced in accordance
herewith.”

     

    (d)               
Section 3.2(a) of the Loan Agreement is hereby modified by deleting the last
sentence thereof.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (e)                Section
3.2(b)(iv) of the Loan Agreement is hereby deleted in its entirety and the
following is inserted in lieu thereof:

     

    “(iv)  
all remaining amounts to the Qualified Operating Account, unless a Mortgage Loan
Event of Default shall have occurred and be continuing, in which case, all
remaining amounts to the Mortgage Loan Cash Management Account.”

     

    (f)                 The
following Section 3.6 is hereby inserted immediately following Section 3.5 of
the Loan Agreement:

     

    “3.6.  Qualified Operating Account;
No Distributions.

     

    (a)         Borrower
shall cause the Qualified Operating Account to be maintained at all
times.  Borrower shall (i) cause all amounts payable with respect to
operating expenses for the Properties to be paid exclusively from the Qualified
Operating Account, accounts that sweep on a daily basis into the Qualified
Operating Account and accounts established pursuant to the Encumbered Property
Debt Documents (and from no other accounts), (ii) not permit excess cash
attributable to the Properties or the operations of AFRT to be contained in any
account other than the Qualified Operating Account, accounts that sweep on a
daily basis into the Qualified Operating Account or accounts established
pursuant to the Encumbered Property Debt Documents and (iii) not permit the
amounts contained in the Qualified Operating Account to be used for any purpose
other than in connection with the Properties and the making of Permitted
Distributions.  Borrower shall not permit any distributions, transfers
or disbursements to be made from the Qualified Operating Account (or any other
account containing funds related to the Properties and/or the operations of
AFRT) to its direct or indirect equityholders, except for Permitted
Distributions.  In the event that any distribution described in clause
(2) of the definition of “Permitted Distribution” shall be in excess of the
amount required to pay the corporate overhead of AFRT for the period for which
such Permitted Distribution was made (as a result of such overhead being less
than the amount budgeted therefor), Borrower shall cause such excess to be
promptly returned to the Qualified Operating Account.  Borrower shall
deliver to Lender each month the monthly bank statement related to the Qualified
Operating Account.

     

    (b)         Within
10 days after receipt of a written request from Lender and Senior Mezzanine
Lender, Borrower shall use its good faith commercially reasonable efforts to
cause the Qualified Operating Account to be subject to a Qualified Operating
Account Control Agreement reasonably acceptable to Lender and Senior Mezzanine
Lender; provided that, in the
event that Borrower is unable to cause the institution at which the Qualified
Operating Account is held to promptly enter into such an agreement, Borrower
shall replace the Qualified Operating Account with an Eligible Account at
another Eligible Institution that will enter into such an agreement within 30
days after Borrower’s receipt of such written request (in which case, such
replacement account shall be deemed to be the “Qualified Operating Account” for
all purposes hereunder).”

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (g)                Section
5.14 of the Loan Agreement is hereby modified by inserting the following
immediately after clause (iv) thereof:

     

    “Notwithstanding
anything to the contrary contained in this Section 5.14, from
and after the first day of the Extension Term, without further request from
Lender, Borrower shall deliver to Lender the monthly reports described in this
Section 5.14
for each month until the Indebtedness has been repaid in full.  All
such reports shall include, in addition to the information described above,
monthly cash flow statements tied to bank statements, including a reconciliation
of beginning cash balances to ending cash balances (including, without
limitation, a reconciliation of the Qualified Operating Account as to income
from rents, operating expenses, Tenant Improvements and Leasing Commissions,
Permitted Distributions and such other items as Lender shall reasonably
request).”

     

    (h)                Section
5.23 of the Loan Agreement is hereby modified by inserting the following
immediately after the last sentence thereof:

     

    “Without
in any way limiting the requirements of this Section 5.23,
Borrower shall not permit any funds constituting Distributions to be swept
through, or concentrated in, any account other than the Qualified Operating
Account, accounts that sweep on a daily basis into the Qualified Operating
Account and accounts established pursuant to the Encumbered Property Debt
Documents, prior to such funds being remitted to the Cash Management Account in
accordance with this Section
5.23.”

     

    (i)                 The
following Section 5.25 is hereby inserted immediately following Section 5.24 of
the Loan Agreement:

     

    “5.25.  Business
Plan.  Within 90 days after the first day of the Extension
Term, Borrower shall deliver to Lender a comprehensive long-term business plan
and restructuring proposal addressing repayment of the Loan, in each case, in a
format, and containing a level of detail, reasonably acceptable to
Lender.  Such comprehensive long-term business plan and restructuring
proposal shall include, without limitation, (i) income statements, balance
sheets and cash flow statements prepared in accordance with GAAP, both on a
consolidated basis (i,e., GKK as a whole) and on a consolidating basis (i.e.,
the GKK finance  business versus the GKK real estate business), (ii)
individual Property-level projections, projected rent rolls and such other
projections as Lender shall reasonably request, (iii) a detailed narrative as to
all material operating, balance sheet and financing assumptions and (iv) such
other reports and components as Lender shall reasonably request.  To
the extent applicable, the foregoing shall be presented on a monthly basis for
the first 12 months of the period covered by such plans and on an annual basis
for the remainder of the period covered by such plans.”

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    Section
2.     Conditions
Precedent.  Contemporaneously with the execution and delivery
of this Amendment, Borrower shall comply with the conditions set forth in
Section 1.2(b) of the Loan Agreement, as modified by this Amendment (Lender
hereby acknowledging satisfaction of clause (i) thereof).  In
addition, the effectiveness of this Amendment is subject to the satisfaction of
the following conditions:

     

    (a)           On
the effective date of this Amendment, the Qualified Operating Account shall
contain no less than $5,000,000, and Borrower shall have delivered to Lender
reasonably satisfactory evidence thereof.

     

    (b)           Borrower
shall have paid or reimbursed Lender for all of its out-of-pocket costs and
expenses (including, without limitation, reasonable out-of-pocket legal fees)
related to the negotiation, execution and delivery of this Amendment and the
commencement of the Extension Term.

     

    (c)           Borrower
shall have delivered a fully executed copy of this Amendment to
Lender.

     

    Section
3.    Miscellaneous.

     

    (a)           All
of the terms and conditions of the Loan Agreement are incorporated herein by
reference with the same force and effect as if fully set forth
herein.  Except as expressly amended hereby, the Loan Agreement and
each of the other Loan Documents remains in full force and effect in accordance
with its terms.  For the avoidance of doubt, Borrower and Lender
acknowledge and agree that (i) subject to the satisfaction of the conditions set
forth in Section
2 hereof, the Maturity Date shall be the Payment Date in March 2011 or
such earlier date as may result from acceleration and (ii) Borrower has no
further options to extend the Maturity Date of the Loan.

     

    (b)           This
Amendment shall be governed by and construed and interpreted in accordance with
the laws of the State of New York, without regard to principles of conflicts of
law.

     

    (c)           Borrower
hereby (1) unconditionally ratifies and confirms, renews and reaffirms all
of its obligations under the Loan Agreement and each of the other Loan
Documents, (2) acknowledges and agrees that such obligations remain in full
force and effect, binding on and enforceable against it in accordance with the
terms, covenants and conditions of the Loan Agreement as amended hereby and the
other Loan Documents, in each case, without impairment, and (3) represents,
warrants and covenants that it is not in default under the Loan Agreement or any
of the other Loan Documents beyond any applicable notice and cure periods, and
there are no defenses, offsets or counterclaims against the
Indebtedness.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (d)           Sponsor
hereby (1) unconditionally approves and consents to the execution by
Borrower of this Amendment and the modifications to the Loan Documents effected
thereby, (2) unconditionally ratifies, confirms, renews and reaffirms all of its
obligations under the Guaranty, the Environmental Indemnity and Cooperation
Agreement (the “Sponsor Documents”),
(3) acknowledges and agrees that its obligations under the Sponsor
Documents remain in full force and effect, binding on and enforceable against it
in accordance with the terms, covenants and conditions of such documents without
impairment, and (4) represents, warrants and covenants that it is not in
default under any Sponsor Document beyond any applicable notice and cure
periods, and there are no defenses, offsets or counterclaims against its
obligations under the Sponsor Documents.

     

    (e)           Borrower
acknowledges and agrees that no oral communication or course of dealing from or
on behalf of Lender shall constitute any waiver, agreement, commitment, or
evidence of any assurance or intention of Lender with respect to the Loan, the
Loan Agreement and/or the other Loan Documents, and that any waiver, agreement,
commitment, assurance, or intention of Lender with respect to the Loan, the Loan
Agreement and/or the other Loan Documents shall be effective only if in writing
and duly executed by Lender.  Borrower acknowledges and agrees that no
Default or Event of Default shall be waived by Lender, unless such waiver is in
writing and duly executed by Lender.

     

    (f)           This
Amendment may be executed by facsimile signatures and in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all of
which counterparts together shall constitute but one and the same
instrument.

     

    (g)           Lender
hereby consents to the execution of that certain Second Amendment to Loan
Agreement relating to the Mortgage Loan and that certain Amendment to Amended
and Restated Senior Mezzanine Loan Agreement, each dated as of the date
hereof.  The Mortgage Lender and Senior Mezzanine Lender may rely on
such consent for purposes of any applicable intercreditor or co-lender
agreement, and the Senior Mezzanine Lender may rely on such consent for purposes
of any applicable loan repurchase agreement.

     

    [Signatures
appear on following page]

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, for good and valuable consideration, the sufficiency of which
is hereby acknowledged and agreed, the parties hereto have executed and
delivered this Amendment as of the date first hereinabove set
forth.

     

    
      
        
          
            
              
                
                  	 
      	
                          BORROWER:

                        
	 	 
	 
      	
                          GKK
      STARS JUNIOR MEZZ 2 LLC, a Delaware

                          limited
      liability company

                        
	 
      	 
      
	 
      	
                          By:

                        	
                          /s/ Timothy J. O'Connor

                        
	 
      	 
      	
                          Name:
      Timothy J. O'Connor

                        
	 
      	 
      	
                          Title:
      President

                        
	 
      	 
      
	 
      	
                          Solely
      with respect to Section 3(d)
      hereof:

                        
	 
      	 
      
	 
      	
                          SPONSOR:

                        
	 
      	 
      
	 
      	
                          GRAMERCY
      CAPITAL CORP., a Maryland

                          corporation 

                        
	 
      	 
      
	 
      	
                          By:

                        	
                          /s/ Timothy J. O'Connor

                        
	 
      	 
      	
                          Name:
      Timothy J. O'Connor

                        
	 
      	 
      	
                          Title:
      President

                        

                

              

            

          

        

      

    

    

    [Signatures continued on following
page]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      
        
          
            	 
      	
                    LENDER:

                  
	 	 
	 
      	
                    GOLDMAN
      SACHS MORTGAGE COMPANY, a New York limited partnership

                  
	 
      	 
      
	 
      	
                    By:

                  	
                    Goldman
      Sachs Real Estate Funding

                  
	 
      	 
      	
                    Corp.,
      its general partner

                  
	 
      	 
      
	 
      	 
      	
                    BBy:

                  	
                    /s/ Mark Buono

                  
	 
      	 
      	 
      	
                    Name:
      Mark Buono

                  
	 
      	 
      	 
      	
                    Title:
      Authorized Signatory

                  
	 
      	 
      
	 
      	
                    CITICORP
      NORTH AMERICA, INC., a New York

                    corporation

                  
	 
      	 
      
	 
      	
                    By:

                  	
                    /s/ Michael M. Schadt

                  
	 
      	 
      	
                    Name:
      Michael M. Schadt

                  
	 
      	 
      	
                    Title:
      Director

                  
	 
      	 
      
	 
      	
                    SL
      GREEN REALTY CORP., a Maryland

                    corporation

                  
	 
      	 
      
	 
      	
                    By:

                  	
                    /s/ Andrew S. Levine

                  
	 
      	 
      	
                    Name:
      Andrew S. Levine

                  
	 
      	 
      	
                    Title:
      Executive Vice
President

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