Gramercy Capital (GKK)

Section 2.11           U.S. Tax Treatment of Notes.

(a)      Each of the Issuer and the Co-Issuer intends that, for U.S. federal income tax purposes, the Offered Notes be treated as debt.  Each prospective purchaser and any subsequent transferee of an Offered Note or any interest therein shall, by virtue of its purchase or other acquisition of such Offered Note or interest therein, be deemed to have agreed to treat such Offered Note as debt for U.S. federal income tax purposes.

(b)      For U.S. federal, state and local income and franchise tax purposes, the Issuer agrees, and each Holder of a Note or any interest therein, by virtue of its purchase or other acquisition of such Note or interest therein, shall be deemed to have agreed, to treat the Notes as debt and the Issuer as a Qualified REIT Subsidiary.

(c)      If the Issuer is treated as a foreign corporation that is not a Qualified REIT Subsidiary and is not engaged in a United States trade or business, the Issuer shall not file, or

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Section 2.11           U.S. Tax Treatment of Notes.

(a)      Each of the Issuer and the Co-Issuer intends that, for U.S. federal income tax purposes, the Senior Notes be treated as debt.  Each prospective purchaser and any subsequent transferee of a Senior Note or any interest therein shall, by virtue of its purchase or other acquisition of such Senior Note or interest therein, be deemed to have agreed to treat such Senior Note as debt for U.S. federal income tax purposes.

Section 2.11           U.S. Tax Treatment of Notes.

(a)      Each of the Issuer and the Co-Issuer intends that, for U.S. federal income tax purposes, the Notes be treated as debt.  Each prospective purchaser and any subsequent transferee of a Note or any interest therein shall, by virtue of its purchase or other acquisition of such Note or interest therein, be deemed to have agreed to treat such Note as debt for U.S. federal income tax purposes.

(b)      In the case of the Preferred Shares and any Class of Notes that is deemed equity for U.S. federal income tax purposes by the Internal Revenue Service (the “IRS”), if the Holder of such Security so requests, the Issuer agrees to timely provide each Holder of such a Security with a PFIC Annual Information Statement, signed by the Issuer or its authorized representative, on an annual basis that contains the following information as required under Treasury Regulation section 1.1295-1(g)(i):

(i)            the first and last days of the taxable year of the Issuer to which the PFIC Annual Information Statement applies;

(ii)           sufficient information to enable each Holder of such Securities to calculate its pro rata share of the Issuer’s ordinary earnings and net capital gain for that taxable year;

(iii)          the amount of cash and the fair market value of other property distributed or deemed distributed to such Holder of such Securities during the taxable year of the Issuer to which the PFIC Annual Information Statement pertains; and

(iv)          a statement that the Issuer shall permit the Holder of any such Securities to inspect and copy the Issuer’s permanent books of account, records and such other documents as may be maintained by the Issuer to establish that the Issuer’s ordinary earnings and net capital gain are computed in accordance with U.S. federal income tax principles and to verify these amounts and the Holder’s pro rata interest thereof.

Notwithstanding the foregoing, if the Holder of such Security so requests and such Holder informs the Issuer or its authorized representative of the par value of each Class of Securities held by such Holder during such taxable year (including, if any Securities were acquired or sold during such taxable year, the date such Securities were acquired or sold, and par value of such Securities), the Issuer or its authorized representative will inform such Holder of its pro rata share of the Issuer’s ordinary earnings and net capital gain in a timely manner.

(c)      The Issuer and the Co-Issuer shall account for the aforementioned Securities and prepare any reports to Noteholders and tax authorities, including without limitation the report specified in paragraph (b) above, consistent with the intentions expressed in Sections 2.11(a) above.

(d)      Each Holder of Notes shall timely furnish to the Issuer, the Co-Issuer or its agents any U.S. federal income tax form or certification (such as IRS Form W-8BEN (Certification of Foreign Status of Beneficial Owner) (with Part III marked), IRS Form W-8IMY (Certification of Foreign Intermediary Status), IRS Form W-9 (Request for Taxpayer

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