Exhibit 10.2
EXECUTION COPY
SERVICES AGREEMENT
THIS SERVICES AGREEMENT, dated as of
October 27, 2008 (this “ Agreement ”), by
and among GKK Capital LP, a Delaware limited partnership (“
GKKOP ”), Gramercy Capital Corp., a Maryland
corporation (“ GKK ” and, together with GKKOP,
the “ Company ”), SL Green Operating
Partnership, L.P., a Delaware limited partnership (“
SLGOP ”), and SL Green Realty Corp., a Maryland
corporation (“ SL Green ” and, together with
SLGOP, “ SLG ”). With respect to the
obligations of the Company as set forth herein, such obligations
shall be joint and several as between GKK and GKKOP.
WHEREAS, GKK, GKKOP and GKK Manager
LLC, a Delaware limited liability company (the “
Manager ”), are parties to that certain Second Amended
and Restated Management Agreement, dated as of the date hereof (the
“ Amended Management Agreement ”);
WHEREAS, SLG has agreed to provide
certain consulting services to the Company and to make Marc
Holliday, Andrew Mathias and David Schonbraun (each, a “
Designated Individual ” and collectively, the “
Designated Individuals ”) available in connection with
the provision of such consulting services for a period of time
after the date hereof; and
WHEREAS, SLG and the Company each
desire to make certain arrangements for the provision of certain
services (as more fully described below) in connection with the
future management and operations of the Company for the periods and
on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of
the mutual covenants contained herein, the parties hereto agree as
follows:
1.
Term .
(a)
With respect to each Designated
Individual, to the extent such Designated Individual remains
employed by SLG, SLG shall use commercially reasonable efforts to
provide the consulting services described in Section 2 hereof
(the “ Consulting Services ”) with respect to
such Designated Individual, from the date hereof through the
earliest to occur of (x) September 30, 2009, (y) the
termination of the Designated Individual’s employment with
SLG for any reason, or (z) a termination of the Amended
Management Agreement (the “ Consulting Term ”);
provided, that the Company, in its sole discretion, may
terminate the Consulting Services with respect to any one or all of
the Designated Individuals at any time during the Consulting Term
upon 30 days’ prior written notice to SLG.
(b)
With respect to the provision of the
Other Services (as defined below), SLG shall use commercially
reasonable efforts to provide the Other Services described in
Section 3 hereof, from the date hereof through the earliest to
occur of (x) the date which is ninety (90) days after the date
hereof or (y) a termination of the Amended Management
Agreement (the “ Other Services Term ”);
provided that the parties agree that if any Other Service
has not been completed within the initial Other Services Term, the
Other Services Term shall be extended for one thirty-day period
with respect to the incomplete Other Service(s) only (the
“ Additional Other Services Term ”); provided
further, that the Company may terminate this Agreement in
respect of any Other Service provided to it pursuant to this
Agreement (including the termination of all Other Services) by
giving written notice to SLG not less than thirty (30) days before
the applicable termination is to take effect. SLG shall cease
to provide the Other Services being terminated pursuant to such
notice upon the expiration of such 30-day period; provided,
however , that such termination shall not relieve or reduce the
Company’s obligation to pay the Other Services Fee.
Notwithstanding the foregoing, either SLG or the Company may
terminate this Agreement as it relates to
any particular Other Service (or, if applicable,
all Other Services) prior to the end of the Other Services Term in
one or more of the following circumstances:
(1)
if both SL Green and the GKK agree
in writing; or
(2)
by the non-defaulting party, if a
party shall commit a material breach of this Agreement with respect
to the particular Other Service (or all Other Services), and such
material breach remains unremedied after thirty (30) days following
the date on which the party alleging the breach first provided the
other party with written notice of the details of such alleged
breach.
2.
Consulting Services
.
(a)
During the Consulting Term, SLG,
through the Designated Individuals, shall provide the Consulting
Services and devote such business time, attention and efforts to
GKK as the board of directors of GKK (the “ Board
”) shall reasonably request; provided , however
, that such Consulting Services shall relate to the services
previously provided by each of the Designated Individuals as
officers of GKK; and provided further , that GKK
acknowledges and agrees that the Designated Individuals’
primary responsibilities and business attention shall be devoted to
SLG. The Company shall provide SLG and the Designated
Individuals with reasonable advance notice of the need for
Consulting Services. SLG shall use commercially reasonable
efforts to ensure that the Consulting Services performed by SLG
pursuant to this Agreement, either directly or through the
Designated Individuals, is performed with a professional level of
skill and will conform in all material respects to the terms and
conditions set forth herein.
(b)
During the Consulting Term, SLG
shall provide the Consulting Services in the capacity as an
independent contractor. Nothing in this Agreement shall be
construed as constituting a joint venture or partnership between
the parties hereto or as giving one party to this Agreement control
over the managerial practices, financial administration or
personnel practices, policies or procedures of the other
party. As between the Company and SLG, SLG shall have full
and exclusive liability for the payment of compensation,
workers’ compensation and employer’s liability
insurance premiums with respect to the Designated Individuals and
for the payment of all taxes, contributions and other payments for
unemployment compensation now or hereinafter imposed upon employers
by the government of the United States of America or by any
individual state or local authority with respect to the Designated
Individuals. The Company will not provide to SLG or the
Designated Individuals, and, as between the Company and SLG, SLG
shall be solely responsible for, any liability and other insurance
or health insurance and benefits, Social Security and other payroll
taxes, unemployment taxes, employee benefits or coverage under any
employee benefit plans. SLG also acknowledges and agrees that
SLG is solely responsible for any and all compensation of the
Designated Individuals.
3.
Other Services
.
(a)
The parties agree that, upon the
terms and subject to the conditions set forth in this Agreement and
Schedule A hereto, SLG shall, or shall cause one or more of
its subsidiaries or Affiliates to, provide to the Company and/or
its subsidiaries and Affiliates those services described on
Schedule A (the “ Other Services
”). Each Other Service shall only be provided in the
manner specified for such Other Service on Schedule A
. The scope of the Other Services required to be performed
hereunder shall not, unless the parties mutually agree in writing,
materially exceed the scope of the Other Services described in
Schedule A . For the purposes of this Agreement,
“Affiliate” means, with respect to any Person, any
other Person that directly, or indirectly through one or more of
its intermediaries, controls or is controlled by or is under common
control with the Person specified. The term
“control” (including the
2
terms “controlling,”
“controlled by” and “under common control
with”) means possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by
contract or otherwise. The term “Person” means
any natural person, corporation, general partnership, limited
partnership, limited or unlimited liability company,
proprietorship, joint venture, other business organization, trust,
union, association or governmental authority.
(b)
SLG shall provide, or shall cause to
be provided, the Other Services in a manner generally consistent in
all material respects with the manner and level of care and
expertise with which such Other Services were provided to the
Company by SLG or one of its Affiliates prior to the date
hereof. SLG shall provide, or shall cause to be provided, the
Other Services using employees who are duly qualified or skilled or
otherwise have the requisite expertise in the areas required to
provide the Other Services generally in accordance with past
practice. For the avoidance of doubt, nothing herein shall
require SLG to hire any additional employees or maintain the
employment of any specific employee.
(c)
The Company acknowledges that
certain Other Services to be provided by SLG are dependent upon
data to be provided by the Company to SLG and the Company agrees to
promptly provide such data to the extent necessary and agrees that
SLG shall not be in breach of this Agreement for the failure to
provide a Other Service dependent upon data that has not been
provided by the Company following a request for such data from
SLG.
(d)
Each party shall reasonably
cooperate and provide in good faith such mutual assistance as is
reasonably necessary in connection with the Other Services,
including for SLG to provide the Other Services in the manner
required by this Agreement (including Schedule A
). This cooperation shall include, but not be limited to,
(i) the timely provision of all materials and information
reasonably required by SLG in connection with the performance of
the Other Services and (i
