would have, but performs no day-to-day management or similar role) with respect to such entities or ventures and such investment does not violate Section 8 hereof; and provided, further, that, in any case in which another party involved in the investment has a material business relationship with the Employer, Executive shall give notice prior written notice to the Managing Member and the CEO; or (iii) serving as a member of the Board of Directors of a for-profit corporation with the approval of the CEO and the Managing Member.

(c)            Travel .  In performing his duties hereunder, Executive shall be available for all reasonable travel as the needs of the Employer’s business may require.

3.              Compensation and Benefits .  In consideration of Executive’s services hereunder, the Employer shall compensate Executive as provided in this Agreement, and the Corporation shall have the obligations as set forth herein.

(a)            Base Salary .  The Employer shall pay Executive an aggregate minimum annual salary at the rate of $350,000 per annum during the Employment Period (“Base Salary”).  Base Salary shall be payable bi-weekly in accordance with the Employer’s normal business practices and shall be reviewed by the Managing Member at least annually (for purposes of possible, upward, but not downward, adjustment).

(b)            Incentive Compensation/Bonuses .  In addition to Base Salary, during the Employment Period, Executive shall be eligible for and shall receive from the Employer such discretionary annual bonuses as the Managing Member, in its sole discretion, may deem appropriate to reward Executive for job performance; provided, however, that Executive’s annual performance bonus shall not be less than $250,000 (the “Minimum Bonus”).  In addition, Executive shall be eligible to participate in any other bonus or incentive compensation plans in effect with respect to senior executive officers of the Employer.  If the term of this Agreement is extended under the penultimate sentence of Section 1, and Executive’s employment terminates as of the expiration of the term as so extended, then (i) upon such termination of employment, Executive shall receive (without duplication) an amount equal to (A) $250,000 multiplied by (B) a fraction (x) the numerator of which is the number of days in the fiscal year of termination during which Executive was employed and (y) the denominator of which is 365, and (ii) no other bonus-related amounts shall be payable under this Section 3(b) for the fiscal year of termination.

(c)            Equity-Based Awards .  In the discretion of the Board or the Compensation Committee thereof, Executive shall be eligible to participate in any current or future equity incentive plan that has been or may be established by the Corporation for senior executive officers.  It is acknowledged that Executive has been previously granted 10,000 shares of restricted stock under that certain Gramercy Capital Corp. 2004 Equity Incentive Plan Restricted Stock Award Agreement between the Corporation and Executive, and 140,000 options under that certain Gramercy Capital Corp. 2004 Equity Incentive Plan Option Award Agreement between the Corporation and Executive, both dated           , 2004, copies of each are attached hereto as Exhibits A and B, respectively.

(d)            Expenses .  Executive shall be reimbursed for all reasonable business related expenses incurred by Executive at the request of or on behalf of the Employer or the Corporation, provided that such expenses are incurred and accounted for in accordance with the policies and procedures established by the Employer or the Corporation.  Any expenses incurred during the Employment Period but not reimbursed by the Employer or the Corporation by the end of the Employment Period, shall remain the obligation of the Employer or the Corporation, as applicable to so reimburse Executive.

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(e)            Health and Welfare Benefit Plans .  During the Employment Period, Executive and Executive’s immediate family shall be entitled to participate in such health and welfare benefit plans as the Employer shall maintain from time to time for the benefit of senior executive officers of the Employer and their families, on the terms and subject to the conditions set forth in such plan.  Nothing in this Section shall limit the Employer’s right to change or modify or terminate any benefit plan or program as it sees fit from time to time in the normal course of business so long as it does so for all senior executives of the Employer.

(f)             Vacations .  Executive shall be entitled to paid vacations in accordance with the then regular procedures of the Employer governing senior executive officers.

(g)            Other Benefits .  During the Employment Period, the Employer shall provide to Executive such other benefits, as generally made available to other senior executives of the Employer.

4.              Indemnification and Liability Insurance .  The Employer and Corporation together and severally agree to indemnify Executive to the full extent permitted by applicable law, as the same exists and may hereafter be amended, from and against any and all losses, damages, claims, liabilities and expenses asserted against, or incurred or suffered by, Executive (including the costs and expenses of legal counsel retained by the Employer or the Corporation to defend Executive and judgments, fines and amounts paid in settlement actually and reasonably incurred by or imposed on such indemnified party) with respect to any action, suit or proceeding, whether civil, criminal administrative or investigative (a “Proceeding”) in which Executive is made a party or threatened to be made a party or is otherwise involved, either with regard to his entering into this Agreement with the Employer or in his capacity as an officer or director, or former officer or director, of the Employer, the Corporation or any affiliate thereof for which he may serve in such capacity.  The Employer and the Corporation also agree to secure promptly and maintain officers and directors liability insurance providing coverage for Executive, the coverage shall be reasonably comparable to the coverage maintained by SL Green Realty Corp., for such time as SL Green Realty Corp. controls the Employer, to the extent that coverage can be obtained on reasonable efforts at a comparable rate.  The provisions of this Section 4 shall remain in effect after this Agreement is terminated irrespective of the reasons for termination.

5.              Employer’s Policies .  Executive agrees to observe and comply with the reasonable rules and regulations of the Employer and the Corporation from time to time regarding the performance of his duties and to carry out and perform orders, directions and policies communicated to him from time to time by the Employer and the Corporation, so long as same are otherwise consistent with this Agreement.

6.              Termination .  Executive’s employment hereunder may be terminated under the following circumstances:

(a)            Termination by the Employer .

(i)             Death .  Executive’s employment hereunder shall terminate upon his death.

(ii)            Disability .  If, as a result of Executive’s incapacity due to physical or mental illness or disability, Executive shall have been incapable of performing his duties hereunder even with a reasonable accommodation on a full-time basis for the entire period of four consecutive months or any 120 days in a 180-day period, and within 30

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days after written Notice of Termination (as defined in Section 6(d)) is given he shall not have returned to the performance of his duties hereunder on a full-time basis, the Employer may terminate Executive’s employment hereunder.

(iii)           Cause .  The Employer may terminate Executive’s employment hereunder for Cause.  For purposes of this Agreement, “Cause” shall mean:  (i) Executive’s engaging in conduct which is a felony; (ii) Executive’s engaging in conduct constituting a material breach of fiduciary duty, gross negligence or willful and material misconduct, material fraud or willful and material misrepresentation; (iii) Executive’s material breach of any of his obligations under Section 8(a) through 8(e) of this Agreement; or (iv) Executive’s failure to competently perform his duties after receiving notice from the Employer specifically identifying the manner in which Executive has failed to perform (it being understood that, for this purpose, the manner and level of Executive’s performance shall not be determined based on the financial performace of the Employer or the Corporation (including, without limitation, the performance of the stock of the Corporation)).

(iv)           Without Cause .  Executive’s employment hereunder may be terminated by the Employer at any time with or without Cause (as defined in Section 6(a)(iii) above), by the Managing Member (or, in the case of the Corporation, by a majority vote of all of the members of the Board) upon written notice to Executive, subject only to the severance provisions specifically set forth in Section 7.

(b)            Termination by Executive .

(i)             Disability .  Executive may terminate his employment hereunder for Disability within the meaning of Section 6(a)(ii) above.

(ii)            With Good Reason .  Executive’s employment hereunder may be terminated by Executive with Good Reason effective immediately by written notice to the Employer.  For purposes of this Agreement, with “Good Reason” shall mean, without Executive’s prior written consent, (i) a failure by the Employer to pay compensation in accordance with the provisions of Section 3, which failure has not been cured within 14 days after the notice of the failure (specifying the same) has been given by Executive to the Employer; (ii) a material breach by the Employer of any other provision of this Agreement which has not been cured within 30 days after notice of noncompliance (specifying the nature of the noncompliance) has been given by Executive to the Employer, (iii) the Employer requires Executive to relocate his principal office more than 60 miles outside of Manhattan other than in connection with a change of the Employer’s principal office to the same new location; or (iv) the Employer enters into an employment agreement with any person pursuant to which such person will receive an annual base salary or guaranteed bonus in excess of the highest salary and guaranteed bonus payable to Executive, and the entering into of such employment agreement is in contravention of Section 6.4.11 of the LLC Agreement (as defined in Section 6(c) below).  On and after the occurrence of a Change-in-Control (as defined in Section 6(c) below), “Good Reason” shall also include, in addition to the foregoing:

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(A)           a change in duties, responsibilities, status or positions with the Employer that does not represent a promotion from or maintaining of Executive’s duties, responsibilities, status or positions as in effect immediately prior to the Change-in-Control, or any removal of Executive from or any failure to reappoint or reelect Executive to such positions, except in connection with the termination of Executive’s employment for Cause, disability, retirement or death;

(B)            a reduction by the Employer in Executive’s Base Salary or bonus compensation as in effect immediately prior to the Change-in-Control;

(C)            the failure by the Employer to continue in effect any of the benefit plans including, but not limited to ongoing stock option and equity awards, in which Executive is participating at the time of the Change-in-Control of the Employer (unless Executive is permitted to participate in any substitute benefit plan with substantially the same terms and to the same extent and with the same rights as Executive had with respect to the benefit plan that is discontinued) other than as a result of the normal expiration of any such benefit plan in accordance with its terms as in effect at the time of the Change-in-Control, or the taking of any action, or the failure to act, by the Employer which would adversely affect Executive’s continued participation in any of such benefit plans on at least as favorable a basis to Executive as was the case on the date of the Change-in-Control or which would materially reduce Executive’s benefits in the future under any of such benefit plans or deprive Executive of any material benefits enjoyed by Executive at the time of the Change-in-Control; provided, however, that any such action or inaction on the part of the Employer, including any modification, cancellation or termination of any benefits plan, undertaken in order to maintain such plan in compliance with any federal, state or local law or regulation governing benefits plans, including, but not limited to, the Employment Retirement Income Security Act of 1974, as amended, shall not constitute Good Reason for the purposes of this Agreement;

(D)           the failure by the Employer to obtain from any successor to the Employer an agreement to be bound by this Agreement pursuant to Section 17 hereof, which has not been cured within 30 days after the notice of the failure (specifying the same) has been given by Executive to the Employer.

 (iii)          Without Good Reason .  Executive shall have the right to terminate his employment hereunder without Good Reason, subject to the terms and conditions of this Agreement.

(c)            Definitions .  The following terms shall be defined as set forth below.

(i)             “Change-in-Control” shall mean the happening of any of the following:

(A)           any “person,” including a “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding the Employer or the Corporation, any entity controlling, controlled by or under common control with the Employer or the Corporation, any trustee, fiduciary or other person or entity

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holding securities under any employee benefit plan or trust of the Employer or the Corporation or any such entity, and Executive and any “group” (as such term is used in Section 13(d)(3) of the Exchange Act) of which Executive is a member), is or becomes the “beneficial owner” (as defined in Rule 13(d)(3) under the Exchange Act), directly or indirectly, of securities of the Employer or the Corporation representing 25% or more of either (A) the combined voting power of the Employer’s or the Corporation’s then outstanding securities or (B) the then outstanding common stock (or other similar equity interest, in the case of  a company other than a corporation) of the Employer or the Corporation (in either such case other than as a result of an acquisition of securities directly from the Employer or the Corporation); provided, however, that, in no event shall a Change-in-Control be deemed to have occurred upon an initial public offering of the common stock (or such other equity interest) of the Employer or the Corporation under the Securities Act; or

(B)            any consolidation or merger of the Employer or the Corporation where the shareholders of the Employer or the Corporation, as applicable, immediately prior to the consolidation or merger, would not, immediately after the consolidation or merger, beneficially own (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, shares representing in the aggregate 50% or more of the combined voting power of the securities of the corporation issuing cash or securities in the consolidation or merger (or of its ultimate parent corporation, if any); or

(C)            there shall occur (A) any sale, lease, exchange or other transfer (in one transaction or a series of transactions contemplated or arranged by any party as a single plan) of all or substantially all of the assets of the Employer or the Corporation, other than a sale or disposition by the Employer or the Corporation of all or substantially all of the Employer’s or the Corporation’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by “persons” (as defined above) in substantially the same proportion as their ownership of the Employer or the Corporation, as applicable, immediately prior to such sale or (B) the approval by shareholders of the Employer or the Corporation, as applicable, of any plan or proposal for the liquidation or dissolution of the Employer or the Corporation, as applicable; or

(D)           the members of the Board (the “Directors”) at the beginning of any consecutive 24-calendar-month period (the “Incumbent Directors”) cease for any reason other than due to death to constitute at least a majority of the members of the Board; provided that any Director whose election, or nomination for election by the Corporation’s shareholders was approved or ratified by a vote of at least a majority of the members of the Board then still in office who were members of the Board at the beginning of such 24-calendar-month period shall be deemed to be an Incumbent Director.

Notwithstanding the foregoing, (i) a