Exhibit
10.48


INVESTMENT
MANAGEMENT AGREEMENT


This AGREEMENT is entered into on November 9, 2006
(this “Agreement”), between Berkley 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 $85million (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 



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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 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 INSURANCE COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Eugene G. Ballard

  	
   

  
	
   

  	
   

  	
   

  	
  Name:Eugene G. Ballard

  
	
   

  	
   

  	
   

  	
  Title: Senior Vice President

  




 15
 









Schedule A


Schedule of Berkley Entities


1.             Berkley
Insurance Company


2.             Berkley
Regional Insurance Company


3.             Admiral
Insurance Company


 



 16














 


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 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 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