Document:

Exhibit 10.65

 

CONSULTING
AGREEMENT

 

THIS
CONSULTING AGREEMENT
(this “Agreement”) is made and entered into effective as of April 12,
2006 (the “Effective Date”), by and between LIQUIDMETAL
TECHNOLOGIES, Inc.,
a Delaware corporation (the “Company”), and William
Johnson an individual (the “Consultant”).

 

RECITALS

 

WHEREAS, upon the terms and conditions set forth in
this Agreement, the Company desires to engage the Consultant to provide
consulting services to the Company; and

 

WHEREAS, the Consultant desires to provide consulting
services to the Company upon the terms and conditions set forth in this
Agreement.

 

NOW,
THEREFORE, in
consideration of the foregoing recitals and for other good and valuable
consideration, the parties hereto covenant and agree as follows:

 

1.                                       Consulting
Engagement. The Company hereby engages the Consultant to provide consulting services
to the Company, and the Consultant hereby accepts such engagement, upon the
terms and conditions set forth in this Agreement. The consulting services to be
provided by the Consultant hereunder will be provided on an as-needed basis (as
requested by the Company, in its discretion), and such consulting services will
consist of the provision of advice,
information, and consultation regarding the development, manufacture,
fabrication, marketing, distribution, and sale of amorphous metal alloys. These
business development actions will include government and commercial research
and development as well as product development (collectively, the “Consulting
Services”). Under this Agreement, Consultant will be required to provide approximately
eight (8) hours of Consulting Services each calendar week, unless
otherwise agreed upon by both parties. To the extent that the Company shall
have any parent company, subsidiaries, affiliated corporations, partnerships,
or joint ventures (collectively “Related Entities”), the Consultant
shall, without additional compensation, perform the Consulting Services
for these entities, during the term of this agreement, to the same extent as
for the Company.

 

2.                                       Term. Subject to the terms
and conditions of this Agreement, including, but not limited to, the provisions
for early termination set forth in Section 5 hereof, the consulting
engagement of the Consultant under this Agreement shall commence as of January 1,
2006 (for past services provided from January 1, 2006 thru the date of
this agreement) and shall continue through December 31, 2006 (the “Consulting Term”).

 

3.                                       Independent
Contractor. At all times during the Consultant’s engagement, the Consultant will act
as an independent contractor. The Consultant will not be considered an employee
of the Company for any purpose and will not be entitled to any of the benefits
that the Company may provide for its employees. Moreover, it is expressly
agreed by the parties that no agency relationship is, or will be deemed to have
been, created by this Agreement, and no party will by reason of this Agreement
have the power or authority to bind any other party contractually or otherwise.
The Consultant will be solely responsible for the payment and reporting of any
and all federal and state taxes and withholdings due on amounts paid hereunder,
and Company will not withhold any amounts for federal, state or local income
taxes or taxes, assessments or withholding liabilities, and the Consultant will
indemnify and hold Company harmless from and against any costs, damages or
liabilities relating to any 

 

 

such taxes, assessments
or withholdings. In addition to the foregoing, nothing set forth in this Agreement
shall be construed as creating a partnership or joint venture between the
Consultant and the Company.

 

4.                                       Consulting
Fees and Expenses.

 

(a)                                  Fee. As compensation for Consultant’s services and in consideration for
the Consultant’s covenants contained in this Agreement, the Company shall pay
the Consultant a total consulting fee of Sixty thousand dollars ($60,000) (the “Consulting
Fee”). The Consulting Fee shall be payable monthly in arrears, and
following receipt of invoice from the Consultant.

 

(b)                                 Reimbursement of Expenses. The Consultant shall be reimbursed for
standard travel expenses (coach airfare, moderate lodging, standard rental car,
etc.), plus other reasonable and customary business expenses incurred by the
Consultant and approved by the Company in connection with the performance of
Consulting Services hereunder, provided that such reimbursement shall be
subject to, and in accordance with, any travel policies, expense reimbursement
policies and/or expense documentation requirements of the Company that may be
in effect from time to time.

 

5.                                       Termination.

 

(a)                                  Death. The Consulting Term shall terminate early immediately upon Consultant’s
death. In the event of a termination pursuant to this Section 5(a), the
Consultant’s estate shall be entitled to receive any unpaid Consulting Fees
owing to Consultant up through and including the date of the Consultant’s
death.

 

(b)                                 Termination By Consultant. Consultant may, prior to the scheduled
expiration of the Consulting Term, terminate the Consulting Term at any time
without cause and without penalty, provided that at least thirty (30) days’
prior written notice of termination is provided by the Consultant to the
Company. In the event of a termination pursuant to this Section 5(b), the
Consultant shall be entitled to receive any unpaid Consulting Fees owing to
Consultant up through and including the effective date of the termination of
the Consulting Term.

 

(c)                                  Termination By Company With Cause. The Company may terminate the
Consulting Term at any time with Cause. As used in this Agreement, “Cause”
shall include the following: (1) the Consultant’s failure or inability to
perform Consultant’s duties under this Agreement; (2) dishonesty or
other serious misconduct, (3) the commission of an unlawful act material
to Consultant’s engagement hereunder, (4) a material violation of the
Company’s policies or practices which reasonably justifies immediate
termination; (5) committing, pleading guilty, nolo contendre or no contest
(or their equivalent) to, entering into a pretrial intervention or diversion
program regarding, or conviction of, a felony or any crime or act involving
moral turpitude, fraud, dishonesty, or misrepresentation; (6) the
commission by the Consultant of any act which could reasonably affect or impact
to a material degree the interests of the Company or Related Entities or in
some manner injure the reputation, business, or business relationships of the
Company or Related Entities; or (7) any material breach by the Consultant
of this Agreement. The Company may terminate the Consulting Term for Cause
at any time without notice. In the event of a termination for Cause, the
Company shall be relieved of all its obligations to the Consultant provided for
by this Agreement as of the effective date of termination, and all payments to
the Consultant hereunder shall immediately cease and terminate as of such date,
except that Consultant shall be entitled to the Consulting Fee hereunder up to
and including the effective date of termination.

 

(d)                                 Survival of Certain Provisions. The provisions set forth in Sections 6
through 13 of this Agreement shall survive the expiration or termination of the
Consulting Term, regardless of the reason for termination and regardless of
which party causes the termination.

 

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6.                                       Nonsolicitation
and Nondisclosure Covenants.

 

(a)                                  Rationale for Restrictions. Consultant acknowledges that the Consulting
Services to be provided hereunder are of a special, unique, and extraordinary
character, and Consultant’s engagement by the Company places Consultant in a
position of confidence and trust with customers, suppliers, and other persons
and entities with whom the Company and its Related Entities have a business
relationship. The Consultant further acknowledges that the rendering of
services under this Agreement will likely require the disclosure to Consultant
of Confidential Information (as defined below) relating to the Company and/or
Related Entities. As a consequence, the Consultant agrees that it is reasonable
and necessary for the protection of the goodwill and legitimate business
interests of the Company and Related Entities that the Consultant make the
covenants contained in this Section 6, that such covenants are a material
inducement for the Company to engage the Consultant and to enter into this
Agreement, and that the covenants are given as an integral part of and
incident to this Agreement.

 

(b)                                 Nonsolicitation Covenants. As used herein, the term “Restrictive
Period” means the time period commencing on the Effective Date of this
Agreement and ending on the second (2nd) anniversary of the date on
which the Consulting Term expires or is terminated. In addition, the term “Covered
Business” means any business which is the same as, or similar to, any
business conducted by the Company or any of the Related Entities at any time
during the Restrictive Period. The Consultant agrees that the Consultant will
not engage in any of the following acts anywhere in the world during the
Restrictive Period:

 

(i)                                    directly or indirectly assist, promote or
encourage any existing or potential employees, customers, clients, or vendors
of the Company or any Related Entity, as well as any other parties which have a
business relationship with the Company or a Related Entity, to terminate,
discontinue, or reduce the extent of their relationship with the Company or a
Related Entity;

 

(ii)                                 directly or indirectly solicit business of
the same or similar type as a Covered Business, from any person or entity known
by the Consultant to be a customer or client of the Company, whether or not the
Consultant had contact with such person or entity during the Consultant’s
engagement by the Company;

 

(iii)                              disparage the Company, any Related Entities, and/or any shareholder,
director, officer, employee, or agent of the Company or any Related Entity;
and/or

 

(iv)                             engage in any practice the purpose of which is to evade the provisions
of this Section 6 or commit any act which adversely affects the Company,
any Related Entity, or their respective businesses.

 

The
Consultant acknowledges and agrees that, in light of the unique nature of the
Company’s business, the Company will market its products on a worldwide basis
and will compete with various companies and businesses across and world. Accordingly,
the Consultant agrees that the geographic scope of the above covenants is a
reasonable means of protecting the Company’s (and the Related Entities’)
legitimate business interests.

 

(c)                                  Disclosure of Confidential Information. The Consultant acknowledges that the
inventions, innovations, software, trade secrets, business plans, financial
strategies, finances, and all other confidential or proprietary information
with respect to the business and operations of the Company and Related Entities
are valuable, special, and unique assets of the Company. Accordingly, the
Consultant agrees not to, at any time whatsoever either during or after the
Consulting Term, disclose, 

 

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directly or indirectly, to any person or
entity, or use or authorize any person or entity to use, any confidential or
proprietary information with respect to the Company or Related Entities without
the prior written consent of the Company, including, without limitation,
information as to the financial condition, results of operations, identities of
clients or prospective clients, products under development, acquisition
strategies or acquisitions under consideration, pricing or cost information,
marketing strategies or any other information relating to the Company or any of
the Related Entities which could be reasonably regarded as confidential
(collectively referred to as “Confidential Information”). However, the
term “Confidential Information” does not include any information which is or
shall become generally available to the public other than as a result of
disclosure by the Consultant or by any person or entity which the Consultant
knows (or which the Consultant reasonably should know) has a duty of
confidentiality to the Company or a Related Entity with respect to such
information. In addition to the foregoing, Company will be fully entitled to
all of the protections and benefits afforded by the Florida Uniform Trade
Secrets Act and other applicable law.

 

Notwithstanding
the foregoing, the Company acknowledges that technology and know-how related to
the Company’s core technology have been and continue to be the subject of
research in the Johnson research group at the Department of Materials Science
for the California Institute of Technology (CIT). Consultant’s past, present,
and continuing federally sponsored research projects at CIT have dealt with and
continue to deal with the development of bulk amorphous alloys (bulk metallic
glasses), composites, and engineering properties of these materials. These
included current federally supported research projects sponsored by NASA, NSF,
and DARPA. The areas of research and development being investigated under these
CIT projects have substantial overlap with “core technology”, intellectual property
position, and research activities within the Company. The Company acknowledges
that CIT policies alone govern these CIT research projects and that Consultant,
as CIT faculty member, is bound by these policies. Consultant has specific
obligations to CIT and his research group at CIT and Consultant’s employment
agreement at CIT permits him to consult, participate in the creation of startup
companies, and actively participate in transferring technology developed at CIT
to the Company. It also recognizes the importance of protecting intellectual
property developed at and assignable to CIT by way of patents, licensing
agreements, and copyright agreements and requires Consultant to maintain and
protect CIT’s interest in this regard. It also imposes strict adherence to the
concept of free and open dissemination of research results developed and/or
discovered at CIT. Members of the CIT community, and specifically Johnson’s
research group at CIT, should be unrestricted and free to disseminate and
publish research results obtained in CIT research projects in the form of
publications, conference presentations, conference proceedings, informal
discussions, and presentations to colleagues.

 

(d)                                 Prevention of Premature Disclosure of
Information. The Consultant
agrees and acknowledges that, because the success of the Company is heavily
dependent upon maintaining the secrecy of the Company’s Confidential
Information and preventing the premature public disclosure of the Company’s
proprietary information and technology, the Consultant agrees to use the
Consultant’s best efforts and his highest degree of care, diligence, and
prudence to ensure that no Confidential Information prematurely leaks or
otherwise prematurely makes its way into the public domain or any public forum,
including, without limitation, into any trade publications, internet chat
rooms, or other similar forums. In the event that the Consultant becomes aware
of any premature leak of Confidential Information or becomes aware of any
circumstances creating a risk of such a leak, the Consultant shall immediately
inform the Company of such leak or of such circumstances.

 

(e)                                  Removal and Return of Proprietary Items. The Consultant will not remove from the
Company’s premises (except to the extent such removal is for purposes of the
performance of the Consulting Services at home or while traveling, or except as
otherwise specifically authorized by the 

 

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Company) any document, record, notebook,
plan, model, component, device, or computer software or code, whether embodied
in a disk or in any other form (collectively, the “Proprietary Items”).
The Consultant recognizes that, as between the Company and the Consultant, all
of the Proprietary Items, whether or not developed by the Consultant, are the
exclusive property of the Company. Upon expiration or termination of the
Consulting Term, or upon the request of the Company during the Consulting Term,
the Consultant will return to the Company all of the Proprietary Items in the
Consultant’s possession or subject to the Consultant’s control, and the
Consultant shall not retain any copies, abstracts, sketches, or other physical
embodiment of any of the Proprietary Items.

 

(f)                                    Enforcement and Remedies. In the event of any breach of any of the
covenants set forth in this Section 6, the Consultant recognizes that the
remedies at law will be inadequate and that in addition to any relief at law
which may be available to the Company for such violation or breach and
regardless of any other provision contained in this Agreement, the Company
shall be entitled to equitable remedies (including an injunction) and such
other relief as a court may grant after considering the intent of this Section 6.
Additionally, the period of time applicable to any covenant set forth in this Section 6
will be extended by the duration of any violation by the Consultant of such
covenant. In the event a court of competent jurisdiction determines that any of
the covenants set forth in this Section 6 are excessively broad as to
duration, geographic scope, prohibited activities or otherwise, the parties
agree that this covenant shall be reduced or curtailed to the extent, but only
to the extent, necessary to render it enforceable.

 

7.                                       Work Product.

 

(a)                                  Definition. For purposes of this Agreement, “Work Product” means any idea,
invention, technique, modification, process, or improvement (whether patentable
or not), any industrial design (whether registerable or not), any mask work,
however fixed or encoded, that is suitable to be fixed, embedded or programmed
in a semiconductor product (whether recordable or not), and any work of
authorship (whether or not copyright protection may be obtained for it)
created, conceived, or developed by the Consultant, either solely or in conjunction
with others, during the Consulting Term or during the six (6) month period
following the Consulting Term, that relates in any way to amorphous alloys or
composite materials containing amorphous alloys (including, but not limited to,
the composition, processing, manufacturing properties, or application of
amorphous alloys or composites thereof, except that innovations in the
preparation of titanium, zirconium, hafnium, vanadium, niobium, tantalum, and
any of their alloys with any element(s) by the so-called Fray, FFC, or
Cambridge Process are specifically excluded.

 

(b)                                 Ownership of Work Product. Consultant agrees and acknowledges that all
Work Product will belong exclusively to the Company and that all items of Work
Product are works made for hire and the property of the Company, including any
copyrights, patents, semiconductor mask protection, or other intellectual
property rights pertaining thereto. If it is determined that any such works are
not works made for hire, the Consultant hereby assigns to the Company all of
the Consultant’s right, title, and interest, including all rights of copyright,
patent, semiconductor mask protection, and other intellectual property rights,
to or in such Work Product. The Consultant covenants that the Consultant will
promptly:

 

(i)                                   disclose to the Company in writing any Work
Product;

 

(ii)                                assign to the Company or to a party designated by the Company, at the
Company’s request and without additional compensation, all of the Consultant’s
right to the Work Product for the United States and all foreign jurisdictions;

 

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(iii)                             execute and deliver to the Company such applications, assignments, and
other documents as the Company may request in order to apply for and
obtain patents or other registrations with respect to any Work Product in the
United States and any foreign jurisdictions;

 

(iv)                            sign all other papers necessary to carry out the above obligations; and

 

(v)                               give testimony and render any other assistance in support of the
Company’s rights to any Work Product.

 

8.                                       Essential
and Independent Covenants. The Consultant’s covenants in Sections 6 and 7 of this
Agreement are independent covenants, and the existence of any claim by the
Consultant against the Company under this Agreement or otherwise will not
excuse the Consultant’s breach of any covenant in Section 6 or 7.

 

9.                                       Representations
and Warranties by The Consultant. The Consultant represents and warrants to the
Company that the execution and delivery by the Consultant of this Agreement do
not, and the performance by the Consultant of the Consultant’s obligations
hereunder will not, with or without the giving of notice or the passage of
time, or both: (a) violate any judgment, writ, injunction, or order of any
court, arbitrator, or governmental agency applicable to the Consultant, or (b) conflict
with, result in the breach of any provisions of or the termination of, or
constitute a default under, any agreement to which the Consultant is a party or
by which the Consultant is or may be bound, including, without limitation,
any noncompetition agreement or similar agreement.

 

10.                                 Notices. For purposes of this
Agreement, notices and all other communications provided for herein shall be in
writing and shall be deemed to have been duly given when hand-delivered, sent
by facsimile transmission (as long as receipt is acknowledged), or mailed by
United States certified or registered mail, return receipt requested, postage
prepaid, addressed to the address or facsimile number for each party set forth
on the signature page hereto, or to such other address or facsimile number
as either party may have furnished to the other in writing in accordance
herewith, except that a notice of change of address shall be effective only
upon receipt.

 

11.                                 Miscellaneous. No provision of this
Agreement may be modified or waived unless such waiver or modification is
agreed to in writing signed by both of the parties hereto. No waiver by any
party hereto of any breach by any other party hereto shall be deemed a waiver
of any similar or dissimilar term or condition at the same or at any prior or
subsequent time. This Agreement is the entire agreement between the parties
hereto with respect to the Consultant’s engagement by the Company, and there
are no agreements or representations, oral or otherwise, expressed or implied,
with respect to or related to the engagement of the Consultant which are not
set forth in this Agreement. This Agreement shall be binding upon, and inure to
the benefit of, the Company, its respective successors and assigns, and the
Consultant and Consultant’s heirs, executors, administrators and legal
representatives. The duties and covenants of the Consultant under this
Agreement, being personal, may not be delegated or assigned by the Consultant
without the prior written consent of the Company, and any attempted delegation
or assignment without such prior written consent shall be null and void and
without legal effect. The parties agree that if any provision of this Agreement
shall under any circumstances be deemed invalid or inoperative, the Agreement
shall be construed with the invalid or inoperative provision deleted and the
rights and obligations of the parties shall be construed and enforced
accordingly.

 

12.                                 Governing
Law; Resolution of Disputes. The validity, interpretation, construction, and
performance of this Agreement shall be governed by the laws of the State of
California without regard to 

 

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principles of choice of
law or conflicts of law thereunder. Any action or proceeding seeking to enforce
any provision of, or based on any right arising out of, this Agreement may be
brought against either of the parties in the courts of the State of California,
County of Orange, or, if it has or can acquire jurisdiction, in the United
States District Court located in Orange County, California, and each of the
parties consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on either party anywhere in the world. THE
PARTIES HEREBY WAIVE A JURY TRIAL IN ANY LITIGATION ARISING UNDER OR RELATING
TO THIS AGREEMENT.

 

13.                                 Counterparts;
Facsimile Signatures. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may be
effective upon the execution and delivery by any party hereto of facsimile
copies of signature pages hereto duly executed by such party; provided,
however, that any party delivering a facsimile signature page covenants
and agrees to deliver promptly after the date hereof two (2) original
copies to the other party hereto.

 

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

 

 

	
   

  	
  LIQUIDMETAL TECHNOLOGIES

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: /s/ Ricardo A. Salas

  	
   

  
	
   

  	
   

  	
  Ricardo A. Salas, CEO and President

  
	
   

  	
   

  	
   

  
	
   

  	
  Liquidmetal Technologies

  
	
   

  	
  25800 Commercentre Drive, Suite 100

  
	
   

  	
  Lake Forest, CA 92630

  
	
   

  	
  Facsimile Number: (949) 206-8008

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CONSULTANT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: /s/ William Johnson

  	
   

  
	
   

  	
  William Johnson, Individual

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  3546 Mountain View Street

  
	
   

  	
  Pasadena, CA 91107

  
				

 

7Exhibit 10.1

 

AMENDED
AND RESTATED

MANAGEMENT
AGREEMENT

 

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

 

W I T N E S S E T
H :

 

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

 

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

 

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

 

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

 

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

 

AGREEMENT

 

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

 

1.                                       Definitions.

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2.                                       Appointment and Duties of Manager.

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

(vi)                              providing
executive and administrative personnel;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

(xxv)                       taking
the foregoing actions for the Subsidiaries.

 

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

 

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

 

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

 

6

 

(f)                                    Reporting
Requirements.

 

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

 

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

 

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

 

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

 

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

 

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

 

3.                                       Dedication; Other Activities.

 

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

 

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

 

7

 

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

 

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

 

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

 

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

 

6.                                       Records; Confidentiality.

 

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

 

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

 

8

 

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

 

7.                                       Obligations of Manager; Restrictions.

 

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

 

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

 

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

 

9

 

8.                                       Compensation.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

13.                                 Term; Termination.

 

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

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

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

 

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

 

15.                                 Reserved.

 

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

 

13

 

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

 

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

 

If to the Parent or the Operating Partnership:    Gramercy Capital Corp.

 

	
   

  	
  420 Lexington Avenue

  
	
   

  	
  New York, New York 10170

  
	
   

  	
  Attention: Office of General Counsel

  
	
   

  	
   

  
	
  If to Manager:

  	
  GKK Manager LLC

  
	
   

  	
  c/o SL Green Realty Corp.

  
	
   

  	
  420 Lexington Avenue

  
	
   

  	
  New York, New York 10170

  
	
   

  	
  Attention: General Counsel

  

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

15

 

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

 

16

 

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

 

	
   

  	
  GKK MANAGER LLC

  
	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GRAMERCY CAPITAL CORP.

  
	
   

  	
  a Maryland corporation

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GKK CAPITAL LP

  
	
   

  	
  a Maryland limited partnership

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

17

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