Exhibit 10.49


INVESTMENT
MANAGEMENT AGREEMENT


This AGREEMENT is entered into on November 9, 2006
(this “Agreement”), between Berkley Regional Insurance Company, a
Delaware insurance company (“the Investor”), and CT High Grade Mezzanine
Manager, LLC, a Delaware limited liability company (the “the Manager”
and, together with the Investor, each a “Party”).


WHEREAS, the Investor desires to retain the Manager to
acquire, sell, and otherwise manage certain commercial real estate debt and
related investments of the Investor in a separate account (each, an “Account”)
in the manner and on the terms set forth herein;


NOW THEREFORE, in consideration of the mutual promises
and agreements herein contained and other good and valuable consideration, the
receipt of which is hereby acknowledged, it is agreed by and between the
parties hereto as follows:


1.                                       Services,
Investment Discretion.


(a)                                  The
Manager will source, underwrite, negotiate, close, manage and, in accordance
with Section 1(b), sell and/or liquidate on behalf of the Investor commercial
real estate debt and related investments (“Investments”).  At origination, such Investments shall meet
the investment criteria as listed in Exhibit A hereto (the “Investment
Criteria”) or as mutually agreed upon in writing by the Manager and the
Investor.


(b)                                 Following
origination or acquisition of an Investment, the Investor shall have the
authority and power to direct the Manager to sell or liquidate any such
Investment whereupon the Manager shall dispose of such Investment in accordance
with the Investor’s direction.


(c)                                  Subject
to Sections 1(a) and (b), the Investor hereby grants the Manager full and
exclusive discretion as to all decisions regarding the Investments made on
behalf of the Investor in accordance with Section 1(a) hereof.


2.                                       Commitments,
Capital Calls.


(a)                                  Subject
to the terms and conditions set forth in this Section 2, the Investor agrees to
make available for investment up to $85 million
(the Investor’s “Commitment”), such Commitment to be (i) reduced by the
amount of outstanding and committed Investments in the Account (on a cost
basis) and (ii) increased by any principal repayments with respect to the
Investor’s Investments during the Commitment Period (as defined below).


(b)                                 The
“Commitment Period” shall be a period beginning on the date hereof and
ending on the first anniversary of the date hereof at which time the Commitment
Period shall be automatically extended until the 45th day after the date that
either the Investor, on the one hand, or the Manager, on the other hand,
delivers written notice to the other Party 













hereto of its election to terminate the Commitment Period unless (i)
either the Investor, on the one hand, or the Manager, on the other hand,
provides 30 day prior notice of its election to terminate the Commitment Period
as of such first anniversary date or (ii) the Investor, on the one hand, or the
Manager, on the other hand, elects to terminate the Agreement.


(c)                                  During
the Commitment Period, the Investor shall meet capital calls made to the
Investor by depositing cash into a bank account (the Investor’s “Capital
Call Account”) from time to time when called by the Manager pursuant to a
written notice in accordance with Section 16(c) in the form of Exhibit B
hereto (a “Funding Notice”).  The
Investor will be required to fund into its Capital Call Account the amount set
forth in a Funding Notice on the date specified in such Funding Notice, which
date shall not be earlier than three Business Days after the date that such
Funding Notice was delivered to the Investor. 
For purposes of this Agreement, “Business Day” shall mean any day
of the week other than Saturdays, Sundays and days on which federally chartered
banks in the State of New York are not open for business.


(d)                                 The
Manager agrees that capital calls shall be made no earlier than is reasonably
necessary to fund the Investments at the scheduled closing on the transaction.
Subsequent to the Investor’s deposit of cash into the Capital Call Account, in
the event that the Manager becomes aware of a material delay in the closing of
the Investment with respect to which such cash was deposited, or the Manager
determines that such closing will not occur, the Manager will provide written
notice thereof to the Investor, whereupon the Investor may withdraw such cash
from the Capital Call Account (provided that such amount will be added back to
the Investor’s uncalled Commitment).


(e)                                  Notwithstanding
the foregoing, the Manager may require that the 
Investor deposit cash into its Capital Call Account following the
Commitment Period in order to fund the acquisition of any Investment which,
prior to the termination of the Commitment Period, the Manager, on behalf of
the Investor, entered into a binding commitment or letter of intent to acquire
or in order to meet unfunded commitments for outstanding Investments of the
Investor.


(f)                                    The
aggregate amount which the Investor will be required to fund into its Capital
Call Account shall not exceed its Commitment.


(g)                                 On
or about the date hereof, the Manager is entering into investment management
agreements substantially in the form of this Agreement (together with this
Agreement, the “Berkley Agreements”) with each of the entities
identified on Schedule A hereto (together, the “Berkley Entities”).  Investments will be acquired on behalf of the
Investor and the other Berkley Entities in a serial manner, i.e. the first
Investment closed under the Berkley Agreements will be acquired on behalf of
the first Berkley Entity listed on Schedule A, the second Investment closed
under the Berkley Agreements will be acquired on behalf of the second Berkley
Entity listed on Schedule A, the third Investment closed under the Berkley
Agreements will be acquired on behalf of the third Investor listed on Schedule
A, the fourth Investment closed under the Berkley Agreements will be acquired
on behalf of the first Berkley Entity listed on Schedule A and so on.



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3.                                       Agent
and Attorney-in-Fact.


To enable the Manager to exercise fully its discretion
and authority as provided in this Agreement, the Investor does hereby
constitute and appoint the Manager, and any officer of the Manager acting on
its behalf from time to time, as the Investor’s true and lawful representative
and attorney-in-fact, in its name, place and stead to make, execute, sign,
deliver and file any agreements, contracts, instruments, certificates or
documents authorized by the Manager in accordance with its authority under
Section 1.  This power of attorney is
deemed to be coupled with an interest.


4.                                       Servicing
and Custody.


(a)                                  The
Investor and the Manager agree to enter into a servicing agreement with Midland
Investment Services, Inc. (“Midland”), in the form of Exhibit E
hereto, pursuant to which Midland will be retained, at the Investor’s cost, to
perform customary servicing with respect to the Investor’s Investments,
including (i) the receipt of payments with respect to each of the Investor’s
Investment from the applicable primary servicer and distribution of such
payments to the Investor and (ii) the production of monthly servicing reports
which will be subject to review by the Manager.


(b)                                 The
Manager may cause each of the Investor’s Investments (and documents relating
thereto) to be held, at the Investor’s cost, by the Manager or by a custodian
agreed to by the Manager and the Investor, subject to insurance laws and
regulations governing the Investor.  The
Investor agrees to enter into a custodial agreement (providing for market
terms) with such custodian.


(c)                                  The
Manager agrees that it will maintain all records, memoranda, instructions or
authorizations relating to the acquisition or disposition of the Investor’s
Investments authorized hereunder on behalf of the Investor in accordance with
the Manager’s document retention standards and practices.  All documents maintained by Manager with
respect to the foregoing shall (i) be open at all times to inspection and audit
by the Investor or its authorized representatives; (ii) be delivered to the
Investor upon demand; and (iii) be and remain the property of the Investor. The
Manager will provide copies of documents retained in accordance with the
foregoing at the Investor’s cost.


(d)                                 The
Manager shall, at the request of the Investor and at the Investor’s cost,
assist and provide operational support in connection with the audit of any
documents with respect to the services provided under this Agreement undertaken
by the Investor’s internal auditors, certified public accountants or the
insurance department or commissioner of any state, or upon the request of any
governmental agency.


(e)                                  The
Manager shall provide, upon the Investor’s request and at the Investor’s cost,
copies any records which are necessary to file any report required by any
federal, state, or local government or agency.



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5.                                       Management,
Termination and Liquidation Fees.


(a)                                  During
the Commitment Period, the Investor shall pay to the Manager an annual
management fee (the “Management Fee”) equal to 0.25% of the aggregate
amount of the Investor’s Investments (on a cost basis, less any principal
repayments and realized losses thereon and less the amount of any such
Investment withdrawn from the Account pursuant to the last sentence of Section
10 hereof).  The Management Fee payable
by the Investor will be payable in advance on a quarterly basis based upon the
Investments of the Investor outstanding as of the first day of such quarter and
the Investments of the Investor acquired during the quarter on a pro rated
basis.  The payment of Management Fees by
the Investor shall not serve to reduce the Investor’s outstanding unfunded
Commitment.


(b)                                 If
the Investor shall terminate the Commitment Period pursuant to Section 2(b)(i),
the Investor shall continue to pay Management Fees to the Manager in accordance
with Section 5(a) until the Investor’s Investments have been satisfied or
liquidated in accordance with their terms.


(c)                                  If
the Investor shall terminate the Agreement pursuant to Section 2(b)(ii), the
Investor shall pay the Manager a termination fee equal to 0.25% of the
aggregate amount of the Investor’s Investments as of the effective date of such
termination (on a cost basis, less any principal repayments and realized losses
thereon and less the amount of any such Investment withdrawn from the Account
pursuant to the last sentence of Section 10 hereof), which fee shall be payable
within three Business Days of such termination. 
Notwithstanding the foregoing, if the Investor shall (i) terminate the
Agreement pursuant to Section 2(b)(ii) and (ii) direct the disposition of any
of the Investor’s Investments pursuant to Section 1(b), then the Investor shall
(x) pay the liquidation fee set forth in Section 5(d) with respect to each such
Investment which the Investor has directed should be disposed of and (y) pay
the termination fee set forth in this Section 5(c) with respect to each other
Investment.


(d)                                 If
the Investor shall direct the disposition of any of the Investor’s Investments
pursuant to Section 1(b), the Investor shall pay the Manager a liquidation fee
equal to 0.25% of the aggregate Disposition Amount (as defined herein) of the
Investment(s) directed to be disposed by the Investor, which fee shall be
payable within three Business Days of such disposition.  For the purposes hereof, with respect to any
Investment, “Disposition Amount” means the greater of (i) the cost of
such Investment, less any principal repayments and realized losses thereon and
less the amount of any such Investment withdrawn from the Account pursuant to
the last sentence of Section 10 hereof and (ii) the amount received in
connection with the disposition of such Investment.


(e)                                  Upon
termination of the Agreement, the Manager shall no longer have the right to
Management Fees other than Management Fees which have accrued but are unpaid as
of the date of termination of this Agreement.


6.                                       Expenses.


(a)                                  The
Investor, on the one hand, and the Manager, on the other hand, shall bear and
be responsible for the payment of all out of pocket expenses related to the 



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preparation of this Agreement and the organization of the Account
(including the Manager’s legal fees and expenses) on 50/50 even basis.  Thereafter, the Investor and the Manager
shall each bear their respective costs and expense related to any amendment or
modification of this Agreement.


(b)                                 The
Investor shall bear and be responsible for the payment of all reasonable, out
of pocket costs and expenses related to the Account’s activities and
operations, including all investment, reinvestment, holding, management and
disposition of the Investor’s Investments, and including, but not limited to
the following: (i) all out-of-pocket costs and expenses incurred in developing,
negotiating and structuring Investments allocated to the Investor in accordance
with Section 2(g) hereof, whether consummated or not consummated, and
acquiring, disposing of or otherwise dealing with such Investments, including,
without limitation, any investment banking, engineering, appraisal,
environmental, travel, legal and accounting expenses, any deposits and
commitment fees and other fees and out-of-pocket costs related thereto, provided
that in such cases where the Manager or an affiliate of the Manager and the
Investor both participate in the same transaction, expenses will be shared on pro rata basis; (ii) all costs and
expenses, if any, incurred in monitoring the Investor’s Investments, including,
without limitation, any engineering, environmental, third-party payment
processing, travel, legal, servicing, custodial and accounting expenses and
other fees and out-of-pocket costs related thereto, provided that in
such cases where the Manager or an affiliate of the Manager and the Investor
both have an interest in the same asset, expenses will be shared on pro rata basis; (iii) taxes of the
Investor; (iv) costs related to litigation and threatened litigation involving
the Account and Investments; (v) expenses associated with third party
accountants, attorneys and tax advisors with respect to the Account and its
activities, including the preparation of reports and statements and other
similar matters, and costs associated with the distribution of reports to the
Investor; (vi) origination fees or commissions and other investment costs
incurred by or on behalf of the Account and paid to third parties; (vii) all
costs and expenses associated with indemnifying the Covered Persons whom the
Investor has agreed to indemnify (except to the extent that any such costs or
expenses have otherwise been reimbursed pursuant to Section 11(b) hereof);
(viii) fees incurred in connection with the maintenance of bank or custodian
accounts on behalf of the Investor; and (ix) all expenses of the Account that
are not normally recurring operating expenses (collectively, “Investment
Expenses”); provided further that the Manager agrees that it will
not incur any costs and expenses in connection with the origination of any
Investment if such costs and expenses would reduce the weighted average Net
Spread (as defined herein) [****]; and provided further that the Manager
agrees that it will not incur any costs and expenses covered by clauses (i) and
(ix) of this Section 6(b) unless they reflect prevailing market rates.  For purposes hereof, “Net Spread”
means (A) the gross spread of all Investments originated for all Berkley
Entities (measured as of the date of origination or acquisition of any
Investment) pursuant to the Berkley Agreements less (B) the sum of all
Management Fees, servicing fees and Transaction Expenses (as defined herein)
paid or incurred under all Berkley Agreements. 
For purposes hereof, “Transaction Expenses” means all
out-of-pocket costs and expenses incurred in developing, negotiating and
structuring Investments and acquiring, disposing of or otherwise dealing with
Investments pursuant to all Berkley Agreements. 
In calculating Net Spread, Transaction Expenses will be amortized over a
period of two years.






****                         Material
omitted pursuant to a request for confidential treatment under Rule 24b-2 of
the Exchange Act of 1934.  Material filed
separately with the Securities and Exchange Commission.



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(c)                                  Any
Investment Expenses paid by the Manager on behalf of the Account (i.e., out of
Manager’s funds and not out of Account funds and other Investments) shall be
reimbursed by the Investor promptly upon the Manager’s written request
therefore.  The reimbursement of any
Investment Expenses by the Investor shall not serve to reduce the Investor’s
outstanding unfunded Commitment hereunder. 
Upon the Investor’s request, the Manager shall promptly provide to the
Investor documentation of the Investment Expenses.


(d)                                 The
Manager shall bear the following ordinary day-to-day expenses incidental to the
performance of its services hereunder: 
(i) all costs and expenses relating to office space, facilities, utility
service, supplies and necessary administrative and clerical functions in
connection with the Manager’s operations and (ii) compensation of and provision
of benefits to all employees of the Manager and its affiliates who are engaged
in the operation or management of the Manager’s business.


7.                                       Reports.


The Manager shall prepare and deliver to the Investor,
within 60 days following each calendar quarter, a quarterly statement regarding
the Account, each which quarterly report shall include the information
described in Exhibit C hereto. 
The Manager shall prepare and deliver to the Investor, within 15 days
following the date of acquisition of each Investment on behalf of the Investor,
a closing package with respect to such Investment, which shall include the
information contained in the then-standard closing package prepared in
connection with similar investments acquired by Capital Trust, Inc. (with
conforming changes thereto to reflect that the holder of such Investment is the
Investor).  Attached as Exhibit D
hereto is the standard Capital Trust, Inc. closing package as of the date
hereof.


8.                                       Representations
and Warranties.


(a)                                  The
Investor represents, warrants and covenants to the Manager as follows:


(i)                                     The
Investor has the requisite legal capacity and authority to execute, deliver and
perform its obligations under this Agreement. 
The person whose signature is affixed to this Agreement on behalf of the
Investor has full power and authority to execute this Agreement on the Investor’s
behalf.


(ii)                                  This
Agreement has been duly authorized, executed and delivered by the Investor and
is the legal, valid and binding agreement of the Investor, enforceable against
the Investor in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation, fraudulent conveyance and
other similar laws and principles of equity affecting creditors’ rights and
remedies generally.


(iii)                               The Investor’s execution
of this Agreement and the performance of its obligations hereunder do not
conflict with, or violate any provisions of, the governing documents of the
Investor or any obligations by which the Investor is bound, whether arising by
contract, operation of law or otherwise.



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(iv)                              The
Investor recognizes that the Investments involve certain risks and it has taken
full cognizance of and understands all of the investment considerations
relating thereto.  The Investor has such
knowledge and experience in financial and business matters that it is capable
of evaluating the merits and risks of the Investments and making informed
decisions with respect thereto.  The
Investor is able to bear the substantial economic risks related to its
Investments for an indefinite period of time, has no need for liquidity in its
Investments, and, at the present time, can afford a complete loss of its
Investments.  The Investor is relying on
its own business expertise and sophistication (and that of its advisors) and
has performed its own investigation and evaluation of the tax considerations
and regulatory matters associated with its Investments.  The Investor has carefully reviewed and fully
understands the types of charges, fees and expenses which will be assessed
against the Account.  The Investor
further acknowledges that, while the Manager will act as an investment advisor
to the Investor pursuant to the terms of this Agreement, none of the Manager or
any of its affiliates will guarantee that the Investor’s investment purposes
and objectives will be achieved.  The
Investor is aware that the investment strategies that may be used by the
Manager may result in a significant risk of loss and no one can guarantee
profits or freedom from loss in such investments and that in some cases it may
be necessary for the Investor to advance additional funds in order to protect
its Investments.  The Investor is aware
that past performance results achieved by funds or accounts supervised and/or
managed by the Manager may not be indicative of the performance results of the
Account.  The Investor is aware that the
Manager is not registered as an investment adviser with the Securities and
Exchange Commission under the Investment Advisors Act of 1940, as amended.


(b)                                 The
Manager represents, warrants and covenants to the Investor as follows:


(i)                                     The
Manager has the requisite legal capacity and authority to execute, deliver and
perform its obligations under this Agreement. 
The person whose signature is affixed to this Agreement on behalf of the
Manager has full power and authority to execute this Agreement on the Manager’s
behalf.


(ii)                                  This
Agreement has been duly authorized, executed and delivered by the Manager and
is the legal, valid and binding agreement of the Manager, enforceable against
the Manager in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation, fraudulent conveyance and
other similar laws and principles of equity affecting creditors’ rights and
remedies generally.


(iii)                               The Manager’s execution
of this Agreement and the performance of its obligations hereunder do not
conflict with, or violate any provisions of, the governing documents of the
Manager or any obligations by which the Manager is bound, whether arising by
contract, operation of law or otherwise.


9.                                       Confidentiality.


Except as required by law, (a) the Manager agrees to
maintain in strict confidence all information regarding the Investor and its
affiliates that is furnished to the Manager by the Investor or its affiliates
or representatives in connection with this Agreement or the transactions 



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contemplated herein and (b) the Investor agrees to maintain in strict
confidence all investment advice and information furnished to the Investor by
the Manager or its affiliates or its representatives in connection with this
Agreement or the transactions contemplated herein or otherwise obtained through
its access to information concerning the Account, including the details of any
Investment, in each case, unless required to do so by applicable law, rule or
regulation.  Notwithstanding the
foregoing, the Investor consents to the use and disclosure by the Manager of
the Manager’s entrance into this Agreement, investment experience and
performance with respect to the Account, without disclosing the identity of the
Investor or its affiliates in connection with such investment experience or
performance information (unless prior consent to identity disclosure is
obtained from the Investor in writing), and the Manager consents to the
Investor’s disclosure of such investment experience and performance information
(as well as of the identity of the Manager), but the Investor shall not
disclose any information concerning the details of any Investment, unless required
to do so by applicable law, rule or regulation.


10.                                 Right
to Engage in Other Activities.


The Investor acknowledges and understands that the
Manager engages in an investment advisory business apart from managing the
Account, including acting as the manager for it’s parent company’s balance
sheet investment activity and other affiliated entities.  This will create conflicts of interest with
respect to the amount of the Manager’s time devoted to managing the Account and
the allocation of investment opportunities among accounts (including the
Account) managed by the Manager.  The
Manager will attempt to resolve all such conflicts in a manner that is
generally fair to all of its clients. 
The Investor confirms that the Manager may give advice and take action
with respect to any of its other clients (including the other Berkley Entities)
that may differ from advice given to, or the timing or nature of action taken
with respect to, the Investor.  Nothing
in this Agreement shall be deemed to limit the Manager or its affiliates from
sourcing, underwriting, negotiating, closing, managing and selling or otherwise
liquidating investment opportunities for its own or its affiliates’ accounts; provided,
however, that without the prior written consent of the applicable
Investor, the Manager agrees that it will not knowingly cause or permit the
Account to sell any Investments to the Manager or any of its affiliates and provided
further, that the Manager shall promptly notify the applicable Investor in
writing if the Manager or any of its affiliates holds or sells an investment
which is secured by the same underlying collateral which serves as collateral
securing any of the Investor’s Investments. 
In addition, if the Account holds any Investment with respect to which
the Manager or any of its affiliates holds an investment which is secured by
the same underlying collateral and a default occurs with respect to either the
Investor’s Investment or the Manager’s investment, the Manager shall notify the
Investor of such default in writing promptly upon obtaining knowledge of such
default, and the Investor may, in its discretion, withdraw such Investment from
the Account.  Nothing in this Agreement
shall be deemed to obligate the Manager to acquire for the Investor any
investment that the Manager or its, affiliates, officers, partners, members or
employees may acquire for its or their own accounts or for the accounts of any
other client, if, in the absolute discretion of the Manager, it is not
practical or desirable to acquire a participation in such investment for the
Investor.



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11.                                 Standard
of Liability; Exculpation; Indemnification; Insurance.


(a)                                  The
Manager assumes no responsibility under this Agreement other than to render the
services called for hereunder with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in a like
capacity and familiar with such matters would use in the conduct of a like
character.  The Investor and the Manager
agree that the Manager will not be liable to the Investor for any loss, claim,
demand, damage, liability, cost or expense, including reasonable attorneys’
fees and expenses (each a “Loss”) incurred by the Investor that arises
out of or is in any way connected with any recommendation or other act or
failure to act of the Manager under this Agreement, including, but not limited
to, any error in judgment with respect to the Account, so long as such
recommendation or other act or failure to act does not arise from the Manager’s
bad faith, negligence, fraudulent or willful misconduct or breach of this
Agreement.  Under no circumstances will
the Manager be liable or responsible for any Loss incurred by reason of any act
or omission of any custodian, servicer, broker or dealer, whether appointed by
the Investor or chosen with reasonable care by the Manager.  With respect to Losses that arise out of or
are in any way connected with any recommendation or other act or failure to act
of the Manager under this Agreement, including, but not limited to, any error
in judgment with respect to the Account, which arise from the Manager’s
negligence (but not from the Manager’s bad faith, gross negligence, fraudulent
or willful misconduct or intentional breach of this Agreement) under no
circumstances will the Manager be liable or responsible for such Losses to the
extent that they exceed the aggregate amount of Management Fees received by the
Manager pursuant to this Agreement.


(b)                                 The
Investor agrees to indemnify and hold harmless the Manager and its respective
members, partners, shareholders, directors, officers, and employees (each, a “Covered
Person”), from and against any Loss to which any Covered Person may become
subject (including in connection with the defense or settlement of claims and
in connection with any administrative proceedings), insofar as such Loss (or
action in respect thereof) arises out of or relates to any act or omission
performed or omitted by the any Covered Person arising out of or in connection
with this Agreement, the Investor’s Investments and the Account; provided
that no Covered Person shall be entitled to be indemnified hereunder for any
Losses that are finally judicially determined to have resulted primarily from
(i) the bad faith, gross negligence or 
fraudulent or willful misconduct of a Covered Person or the Manager’s
breach of this Agreement (in the case of any Losses in respect of any action or
claim brought by any policy holders or shareholders of the Investor) or (ii)
the bad faith, negligence or fraudulent or willful misconduct of a Covered
Person or the Manager’s breach of this Agreement (in the case of all other
Losses); and provided, further, that in the case of a claim
involving an Investment in which the Manager and the Investor both participate
in the transaction, the indemnity shall be provided on a pro rata basis between the Manager, on the
one hand, and the Investor, on the other hand. 
If any Covered Person becomes involved in any capacity in any action,
proceeding or investigation in connection with any matter with respect to which
such Covered Person may seek to be indemnified hereunder, then the Investor
shall reimburse such Covered Person for its reasonable legal and other out of
pocket expenses (including the cost of any investigation and preparation) as
they are incurred in connection therewith; provided that if such Loss is
finally judicially determined to have resulted primarily from any of the events
described in clause (i) or (ii) above, a Covered Person shall repay to the
Investor all amounts which the Investor advanced to such 



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Covered Person pursuant to this Section; and provided, further,
that any Covered Person seeking indemnification under this Section (other than
the Manager) shall (at the time that such Covered Person seeks such
indemnification) execute an undertaking to repay to the Investor the amounts
advanced to such Covered Person hereunder if such Loss is finally judicially
determined to have resulted primarily from any of the events described in
clause (i) or (ii) above.  The
indemnities in this Section 11 are in addition to any liability that any
indemnifying party may otherwise have and will extend, upon the same terms and
conditions, to each person, if any, who controls any indemnified party within
the meaning of the Securities Act of 1933 Act, as amended.  If for any reason (other than by reason of
the exclusions from indemnification set forth above) the foregoing
indemnification is unavailable to any Covered Person, or insufficient to hold
it harmless, then the Investor shall, to the fullest extent permitted by law,
contribute to the amount paid or payable by such Covered Person as a result of
such loss, claim, damage, liability or expense in such proportion as is
appropriate to reflect the relative benefits received, as applicable, by the Investor,
on the one hand, and such Covered Person, on the other hand, or, if such
allocation is not permitted by applicable law, to reflect not only the relative
benefits referred to above but also any other relevant equitable
considerations.  Notwithstanding anything
herein to the contrary, the Investor shall only indemnify a Covered Person for
such Covered Person’s out of pocket expenses which are reasonable and
appropriate to the exposure being indemnified.


(c)                                  The
Manager shall maintain, with financially sound and reputable insurers,
insurance in such amounts and against such risks as are customarily maintained
by reputable companies under similar circumstances.


12.                                 Term
and Termination.


(a)                                  This
Agreement, unless sooner terminated upon the occurrence of any of the events
listed below, shall terminate on the earlier to occur of (i) the termination of
this Agreement pursuant to Section 2(b)(ii) and (ii) the date of the
liquidation of the last Investment held in the Account following the
termination of the Commitment Period pursuant to Section 2(b)(i).


(b)                                 The
Investor may terminate this Agreement by written notice to the Manager
immediately, upon the bankruptcy, liquidation or dissolution of the Manager or
in the event that the Manager materially breaches this Agreement and such
breach is not cured within 30 days of receipt by the Manager of the Investor
written notice of such breach.


(c)                                  The
Manager may terminate this Agreement by written notice to the Investor
immediately, upon the bankruptcy, liquidation, or dissolution of the Investor
or in the event that the Investor materially breaches this Agreement,
including, but not limited to, its obligation to fund the Account, and such
breach is not cured within 30 days of receipt by the Investor of the Manager’s written
notice of such breach.


(d)                                 Notwithstanding
any provision hereof to the contrary, in the event that either Party hereto
alleges that the other Party has been grossly negligent or committed fraudulent
or willful misconduct with respect to this Agreement or the transactions
contemplated hereunder, the alleging Party shall give written notice thereof to
the other Party, whereupon this 



 10
 









Agreement shall be suspended until the resolution of such allegation in
accordance with the provisions of Section 15 hereof.  During any such suspension, (i) the Investor
shall not be required to make any payments required to be made under Section 5
hereof to the Manager and (ii) the Manager shall not be required to perform any
services on behalf of the Investor or with respect to the Account or any
Investment; provided that any such suspension will not have any effect on the
Investor’s and the Manager’s respective rights and obligations (including the
Investor’s obligation to meet capital calls) with respect to any Investment
which, prior to the suspension of this Agreement, the Manager, on behalf of the
Investor, entered into a binding commitment or letter of intent to acquire or
in order to meet unfunded commitments for outstanding Investments of the
Investor.


(e)                                  Except
as otherwise provided herein, during the term of this Agreement, the Investor
may not, without the Manager’s prior written consent, withdraw funds or any
Investments from the Account.


(f)                                    Sections
2, 6 (to the extent of any unpaid costs and expenses), 9, 11, 12(e), 13, 14(b)
and 16 shall survive the termination of this Agreement.


13.                                 Anti-Money
Laundering.


The Investor represents, warrants and agrees
that:  (a) the Investor desires to open
the Account for legitimate, valid and legal business and/or personal reasons
and not with any intent or purpose to violate any applicable law or regulation;
(b) to the Investor’s knowledge, the funds used to open the Account are derived
from legitimate and legal sources, and neither such funds nor the Account (or
any proceeds thereof) will be used by the Investor or, to the Investor’s
knowledge, by any person associated with the Investor, to finance any terrorist
or other illegitimate, illegal or criminal activity; (c) the Investor  has in place, and will maintain during the
term of this Agreement, an appropriate anti-money laundering program that
complies in all material respects with all applicable laws and regulations
including, without limitation, the “USA PATRIOT ACT,” and that is reasonably
designed to detect and report any activity that raises suspicion of money
laundering activities, and the Investor has obtained all appropriate and
necessary background information respecting its officers and beneficial owners
to enable the Investor to comply with all applicable laws, rules and
regulations respecting money laundering activities; and (d) the Manager may
request, and the Investor will provide, such information as may be necessary
for the Manager to comply with applicable legal or regulatory requirements,
including, without limitation, anti-money laundering requirements, and that
notwithstanding any other provision of this Agreement the Manager may disclose
information respecting the Investor to governmental and/or regulatory or
self-regulatory authorities to the extent required by applicable law or
regulation and may file reports with such authorities as may be required by
applicable law or regulation.  If
required by applicable law, regulation, or interpretation thereof, the Manager
may suspend any and all activity with respect to the Account pending the
Manager’s receipt of instructions regarding the Account from the appropriate
governmental or regulatory authority.



 11















14.                                 ERISA.


(a)           The Investor represents and warrants
that (i) it or its parent corporation (direct or indirect) is an insurance
company regulated by at least one state and is investing assets held only in
its general account or, if it is a wholly-owned subsidiary of an insurance
company, it is investing assets contributed, directly or indirectly, only from
the general account of its parent corporation and (ii) none of its general
account assets or the general account assets of its direct or indirect parent corporation
include assets of an employee benefit plan subject to Part 4 of Title 1 of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
or Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”).  The Investor covenants that, if the assets
invested by the Investor constitute assets of such plans in the future, the
Investor will notify the Manager immediately. In such a case, notwithstanding
Section 12 hereof, the Manager may immediately terminate this Agreement.


(b)           The Investor shall indemnify the
Manager for any and all claims, liabilities, losses, costs, demands and
expenses (including, without limitation, reasonable attorney’s fees and
disbursements and all other amounts paid in preparation, investigation, defense,
mitigation or settlement of any claim, in each case, as such expenses are
incurred and paid) occasioned by the “plan assets status” of the Investor or
the Account, including, without limitation, arising out of any prohibited
transactions within the meaning of Section 406 of ERISA or 4975 of the Code
that may result during any period in which assets of the Account constitute
plan assets.


15.                                 Arbitration.


(a)           Any dispute arising out of or
relating in any manner to this Agreement or to the breach, termination,
enforcement, interpretation or validity of this Agreement, including the
determination of the scope or applicability of this agreement to arbitrate
(each a “Dispute”) shall be resolved in accordance with the procedures
specified in this Section 15, except that any action brought to obtain
injunctive relief shall be brought in any court of competent jurisdiction.  The procedures described in this Section 15
shall be the sole and exclusive procedures for the resolution of any Disputes.


(b)           Any Dispute shall be settled by final
and binding arbitration in New York City, New York before JAMS, or its
successor, pursuant to the United States Arbitration Act, 9 U.S.C. Sec. 1 et
seq., by filing a written demand for arbitration with JAMS, with a copy to the
other Party.  The arbitration will be
conducted in accordance with the provisions of JAMS’ Comprehensive Arbitration
Rules and Procedures in effect at the time of filing of the demand for
arbitration; provided that the Parties agree that each Party to the Dispute
shall have discovery to the same extent as provided under the Federal Rules of
Civil Procedure.


(c)           When a Dispute has been submitted for
arbitration, within 14 days of such submission, the Investors and the Manager
will cooperate with one another and with JAMS in (i) selecting one arbitrator
from their panel of neutrals and (ii) scheduling the arbitration proceedings.



 12
 









(d)           This agreement to arbitrate shall be
specifically enforceable against the Parties by any court of competent
jurisdiction, and may be challenged only upon the grounds provided in Section
10 to the United States Arbitration Act, 9 U.S.C. Sec. 10.  Application also may be made to such court to
confirm, modify or vacate any decision or award of the arbitrator, for an order
of enforcement and for any other remedies which may be necessary to effectuate
such decision or award.  The Parties
hereby consent to the jurisdiction of the arbitrator and of such court and
waive any objection to the jurisdiction of such arbitrator and such court.


(e)           As a part of any arbitration award,
in the discretion of the arbitrator, any Party may be awarded the reimbursement
of its costs and expenses (including reasonable attorneys’ fees) of
investigating, preparing and pursuing its arbitration claim.  No punitive damages may be awarded in the
arbitration.


16.                                 Miscellaneous.


(a)           No Party may assign any of its rights
or obligations under this Agreement without the prior written consent of the
other Parties.  This Agreement may not be
amended or modified except by written instrument duly executed by each of the
Parties hereto.


(b)           THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO NEW YORK CONFLICTS OF LAWS PRINCIPLES.  THE PARTIES HEREBY IRREVOCABLY WAIVE ANY
RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM AGAINST ANY PARTY RELATING IN
ANY WAY TO THIS AGREEMENT OR THE OPERATION OF THE ACCOUNT.


(c)           All communications under this
Agreement must be in writing and will be deemed to have been properly given (i)
immediately if delivered by hand, (ii) immediately if delivered by facsimile,
confirmation of transmission received, (iii) three days after sent by
certified mail, return receipt requested or (iv) one Business Day after being
deposited for next-day delivery with Federal Express or another nationally
recognized overnight delivery service, all charges or postage prepaid, in each
such case properly addressed to the Party to receive such notice at that
Party’s address indicated below, or at any other address that any Party may
designate by notice to the other Parties.


Address for notices to the Manager:


CT High Grade Mezzanine Manager, LLC

c/o Capital Trust, Inc.

410 Park Avenue

New York, New York 10022

Fax:  212-655-0244

Attention:  Geoffrey Jervis



 13
 









with a copy to:


Paul Hastings Janofsky & Walker, LLP

75 East 55th Street

New York, NY 10022

Fax: 212-319-4090

Attention: Michael L. Zuppone


Addresses for notices to the Investor:


Berkley Regional Insurance Company

c/o W.R. Berkley Corporation


475 Steamboat Road


Greenwich, CT  06830

Fax:  203-769-4096

Attention:  James Shiel


with a copy to:


W.R. Berkley
Corporation

475 Steamboat Road

Greenwich, CT  06830

Fax:  203-769-4097

Attention:  General Counsel


(d)           The invalidity or unenforceability of
any provision hereof shall in no way affect the validity or enforceability of
any and all other provisions hereof.


(e)           This Agreement is the entire
agreement of the Parties and supersedes all prior or contemporaneous written or
oral negotiations, correspondence, agreements and understandings, regarding the
subject matter hereof.


(f)            This Agreement may be executed by
facsimile and in any number of counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same
instrument.


(g)           Nothing in this Agreement shall be
deemed to create any right in any Person not a party hereto (other than each
Covered Person and the permitted successors and assigns of the parties hereto)
and this Agreement shall not be construed in any respect to be a contract in
whole or in part for the benefit of any third party (except as aforesaid).


[Signature
Page Follows]


 



 14














IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and delivered by their duly authorized
officers, on the date first written above.


	
  

  	
  CT HIGH GRADE MEZZANINE MANAGER, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Geoffrey G. Jervis

  	
   

  
	
   

  	
  Name: Geoffrey G. Jervis

  
	
   

  	
  Title:  Chief
  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BERKLEY REGIONAL
  INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eugene G. Ballard

  	
   

  
	
   

  	
  Name: Eugene G. Ballard

  
	
   

  	
  Title:  Senior
  Vice President

  



 











Schedule A


Schedule of Berkley Entities


1.             Berkley
Insurance Company


2.             Berkley
Regional Insurance Company


3.             Admiral
Insurance Company











Exhibit A


Investment Criteria and Constraints


1.               Investments are
limited to first mortgage loans or mezzanine loans or interests in mortgage
loans


2.               Fair market value
of the underlying real estate to be determined by a qualified appraiser at the
time of origination or acquisition


3.               $30 million
maximum/$15 million minimum individual investment size.


4.               67% maximum last
dollar Investment-to-value.


5.               Minimum credit
spread of [****].


6.               Floating rate.


7.               Maximum term 5
years.


8.               $125 million
maximum total exposure (across the accounts established in connection with all
Berkley Agreements) to single property type (i.e. hotel, retail, residential,
industrial).


9.               Investments limited
to United States and U.S. territories. 
$125 million maximum total exposure (across the accounts established in
connection with all Berkley Agreements), on a cost basis, to any single State.  $100 million maximum total exposure (across
the accounts established in connection with all Berkley Agreements), on a cost
basis, to New York City, New York.  No
investments in the State of Florida.


10.         Each mezzanine real
estate loan must comply with SSAP 83, as evidenced by a completed SSAP 83
Questionnaire, in the form of Exhibit F hereto, which the Manager shall
complete with respect to the applicable Investment and deliver with the
applicable Funding Notice.






**** Material omitted
pursuant to a request for confidential treatment under Rule 24b-2 of the
Exchange Act of 1934.  Material filed
separately with the Securities and Exchange Commission.











Exhibit B


Form of Funding Notice


From:      CT High Grade Mezzanine Manager, LLC

410 Park Avenue

New York, New York 10022


To:  Berkley
Regional Insurance Company

c/o W.R. Berkley Corporation

475 Steamboat Road

Greenwich, CT  06830

Fax:  203-769-4096

Attention:  James Shiel


Re:                               Capital
call pursuant to Section 2 of the Management Agreement, dated November 9, 2006,
between Berkley Regional Insurance Company and CT Investment Management Co, LLC


	
  Funding Notice Date:

  	
   

  	
   

  
	
  Funding Date:

  	
   

  	
   

  
	
   

  	
   

  
	
  Commitment
  Amount:

  	
  $

  	
   

  	
   

  
	
  Amount Funded to
  Date:

  	
   

  	
   

  	
   

  
	
  Current Funding
  Request:

  	
   

  	
   

  
	
  Remaining
  Unfunded Commitment:

  	
   

  	
   

  
	
   

  	
   

  
	
  Recent Appraised
  Value:

  	
   

  	
   

  
	
   

  	
   

  
	
  Compliance with
  Investment Criteria:

  	
   

  
	
   

  	
   

  
	
  Investment Size:

  	
   

  	
   

  
	
  Last dollar
  Investment to value:

  	
   

  	
   

  
	
  Credit spread
  over appropriate index:

  	
   

  	
   

  
	
  Floating rate
  (yes/no):

  	
   

  	
   

  
	
  Index:

  	
   

  	
   

  
	
  Term:

  	
   

  	
   

  
	
  Property
  Type/Total Exposure to Property Type:

  	
   

  	
   

  
	
  Location of
  Investment (State)/Total Exposure to this State:

  	
   

  	
   

  
							



 


NOTE: To the extent that any deviation from the
Investment Criteria is set forth above, the Manager must obtain the prior
written consent of the applicable Investor before the origination or
acquisition of the Investment.


 















Exhibit C


Outline of Quarterly Report


1.               The Manager Letter


2.               Servicer Report


3.                                       (a)           Commitment Summary


(b)                                 Management
Fee Summary


(c)                                  Investment
Expense Summary


(d)                                 Portfolio
Data Summary


(e)                                  Compliance
Report


(f)                                    Related
Party Report


(g)                                 Individual
Asset Write-ups


4.               Copies of all
Correspondence during the Covered Period











Exhibit D


Form of Closing Package











Exhibit E


Form of Servicing Agreement











Exhibit F


Form of SSAP 83 Questionnaire