Unassociated Document


  
    
      
         

        
          

        

         

      

    

    
      SECURITIES
PURCHASE AGREEMENT

       

      DATED
AS OF MAY 11, 2004

       

      among

       

      CAPITAL
TRUST, INC.

       

      and

       

      W.
R. BERKLEY CORPORATION

       

      and

       

      CERTAIN
STOCKHOLDERS OF CAPITAL TRUST, INC.

       

      
        
          

        

      

       

      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      
        TABLE
OF CONTENTS

        


        Page

         

      

      
        
          
            	
                    ARTICLE
      I

                  	
                    Sale
      of the Shares and the Warrant

                  	
                    1

                  
	
                    Section
      1.1

                  	
                    Authorization
      of Issuance and Sale and Delivery of the Shares and the
      Warrant

                  	
                    1

                  
	
                    Section
      1.2

                  	
                    The
      Closings of the Sales of the Shares and the Warrant

                  	
                    1

                  
	
                    ARTICLE
      II

                  	
                    Certain
      Agreements

                  	
                    2

                  
	
                    Section
      2.1

                  	
                    Delivery
      of Prospectus

                  	
                    2

                  
	
                    Section
      2.2

                  	
                    Filing
      of Prospectus

                  	
                    2

                  
	
                    Section
      2.3

                  	
                    Board
      of Directors

                  	
                    3

                  
	
                    Section
      2.4

                  	
                    Stockholder
      Approval

                  	
                    3

                  
	
                    Section
      2.5

                  	
                    Post-Closing
      Compliance

                  	
                    4

                  
	
                    Section
      2.6

                  	
                    Commercially
      Reasonable Efforts

                  	
                    4

                  
	
                    Section
      2.7

                  	
                    Purchaser
      Lock-Up Agreement

                  	
                    4

                  
	
                    ARTICLE
      III

                  	
                    Conditions
      to the Obligations of the Purchaser

                  	
                    5

                  
	
                    Section
      3.1

                  	
                    Obligations

                  	
                    5

                  
	
                    Section
      3.2

                  	
                    Representations
      and Warranties

                  	
                    5

                  
	
                    Section
      3.3

                  	
                    Absence
      of Litigation

                  	
                    5

                  
	
                    Section
      3.4

                  	
                    Consents
      and Approvals

                  	
                    5

                  
	
                    Section
      3.5

                  	
                    No
      Change in Law

                  	
                    6

                  
	
                    Section
      3.6

                  	
                    Opinion
      of Counsel

                  	
                    6

                  
	
                    Section
      3.7

                  	
                    NYSE
      Approval

                  	
                    6

                  
	
                    Section
      3.8

                  	
                    Registration
      Rights Agreement

                  	
                    6

                  
	
                    Section
      3.9

                  	
                    Conditions
      Applicable to Subsequent Closing

                  	
                    6

                  
	
                    ARTICLE
      IV

                  	
                    Conditions
      to Obligation of the Company

                  	
                    7

                  
	
                    Section
      4.1

                  	
                    Representations
      and Warranties

                  	
                    7

                  
	
                    Section
      4.2

                  	
                    Absence
      of Litigation

                  	
                    7

                  
	
                    Section
      4.3

                  	
                    Consents
      and Approvals

                  	
                    7

                  
	
                    Section
      4.4

                  	
                    No
      Change in Law

                  	
                    7

                  
	
                    Section
      4.5   

                  	
                    NYSE
      Approval

                  	
                    8

                  


          

           

          
            
               


            

            
              -i-

              
                

              

            

            
               


            

          

           

          
            TABLE
OF CONTENTS

            (continued)

             

            Page

             

          

          
            	
                    Section
      4.6

                  	
                    Conditions
      Applicable to Subsequent Closing

                  	
                    8

                  
	
                    ARTICLE
      V

                  	
                    Representations
      and Warranties of the Company

                  	
                    8

                  
	
                    Section
      5.1

                  	
                    Registration
      Statement

                  	
                    8

                  
	
                    Section
      5.2

                  	
                    Organization;
      Good Standing; Qualification and Power

                  	
                    9

                  
	
                    Section
      5.3

                  	
                    Authorization;
      Enforceability; Corporate and Other Proceedings

                  	
                    9

                  
	
                    Section
      5.4

                  	
                    Non
      Contravention

                  	
                    9

                  
	
                    Section
      5.5

                  	
                    Anti-Takeover
      Law and REIT Restrictions

                  	
                    10

                  
	
                    Section
      5.6

                  	
                    Capitalization
      of the Company

                  	
                    10

                  
	
                    Section
      5.7

                  	
                    Use
      of Proceeds

                  	
                    11

                  
	
                    Section
      5.8

                  	
                    SEC
      Reports

                  	
                    11

                  
	
                    Section
      5.9

                  	
                    Financial
      Statements

                  	
                    11

                  
	
                    Section
      5.10

                  	
                    No
      Material Adverse Change

                  	
                    11

                  
	
                    Section
      5.11

                  	
                    No
      Consent or Approval Required

                  	
                    12

                  
	
                    Section
      5.12

                  	
                    New
      York Stock Exchange Listing

                  	
                    12

                  
	
                    Section
      5.13

                  	
                    Tax
      Matters

                  	
                    12

                  
	
                    Section
      5.14

                  	
                    Legal
      Compliance

                  	
                    12

                  
	
                    Section
      5.15

                  	
                    Litigation

                  	
                    13

                  
	
                    Section
      5.16

                  	
                    Material
      Contracts

                  	
                    13

                  
	
                    Section
      5.17

                  	
                    Brokers
      or Finders

                  	
                    13

                  
	
                    Section
      5.18

                  	
                    Liabilities

                  	
                    13

                  
	
                    Section
      5.19   

                  	
                    Loan
      and Investment Losses

                  	
                    13

                  
	
                    ARTICLE
      VI

                  	
                    Representations
      and Warranties of the Purchaser

                  	
                    14

                  
	
                    Section
      6.1

                  	
                    Organization;
      Good Standing; Qualification and Power

                  	
                    14

                  
	
                    Section
      6.2

                  	
                    Authorization;
      Enforceability; Corporate and Other Proceedings

                  	
                    14

                  
	
                    Section
      6.3

                  	
                    Non
      Contravention

                  	
                    14

                  
	
                    Section
      6.4

                  	
                    No
      Consent or Approval Required

                  	
                    15

                  
	
                    Section
      6.5

                  	
                    Beneficial
      Ownership

                  	
                    15

                  


          

           

          
            
               


            

            
              -ii-

              
                

              

            

            
               


            

          

           

          
            TABLE
OF CONTENTS

            (continued)

             

            Page

          

           

          
            	
                    Section
      6.6

                  	
                    Brokers
      or Finders

                  	
                    15

                  
	
                    ARTICLE
      VII

                  	
                    Termination

                  	
                    15

                  
	
                    Section
      7.1

                  	
                    Termination
      Events

                  	
                    15

                  
	
                    Section
      7.2

                  	
                    Effect
      of Termination

                  	
                    16

                  
	
                    ARTICLE
      VIII

                  	
                    Indemnification

                  	
                    16

                  
	
                    Section
      8.1

                  	
                    Indemnification
      Generally

                  	
                    16

                  
	
                    Section
      8.2

                  	
                    Indemnification
      Procedures For Third Party Claims

                  	
                    16

                  
	
                    Section
      8.3

                  	
                    Survival
      of Representations, Warranties, Agreements, Etc.

                  	
                    17

                  
	
                    ARTICLE
      IX

                  	
                    Miscellaneous

                  	
                    17

                  
	
                    Section
      9.1

                  	
                    Expenses
      and Taxes

                  	
                    17

                  
	
                    Section
      9.2

                  	
                    Further
      Assurances

                  	
                    18

                  
	
                    Section
      9.3

                  	
                    Public
      Announcement

                  	
                    18

                  
	
                    Section
      9.4

                  	
                    No
      Third Party Beneficiaries

                  	
                    18

                  
	
                    Section
      9.5

                  	
                    Entire
      Agreement

                  	
                    19

                  
	
                    Section
      9.6

                  	
                    Successors
      and Assigns

                  	
                    18

                  
	
                    Section
      9.7

                  	
                    Counterparts

                  	
                    18

                  
	
                    Section
      9.8

                  	
                    Notices

                  	
                    19

                  
	
                    Section
      9.9

                  	
                    Governing
      Law; Submission to Jurisdiction

                  	
                    20

                  
	
                    Section
      9.10

                  	
                    Amendments
      and Waivers

                  	
                    20

                  
	
                    Section
      9.11

                  	
                    Incorporation
      of Schedules

                  	
                    21

                  
	
                    Section
      9.12

                  	
                    Construction

                  	
                    21

                  
	
                    Section
      9.13

                  	
                    Interpretation

                  	
                    21

                  
	
                    Section
      9.14

                  	
                    Severability

                  	
                    21

                  
	
                    Section
      9.15   

                  	
                    Waiver
      of Jury Trial.

                  	
                    22

                  


          

        

        


        
          
             


          

          
            -iii-

            
              

            

          

          
             


          

        

      

    

    
       

    

    
      	
              Annexes

               

              Annex I

               

              Exhibits

              
                 

                Exhibit
      A 

                Exhibit
      B 

                Exhibit
      C 

                Exhibit
      D

                 

                
                  Schedules

                   

                  Schedule
      A

                  Schedule
      B

                  Schedule
      5.5

                  Schedule
      5.10

                  Schedule
      5.19

                

              

            	
               
      

               
      

              –
      Certain Definitions

               

               

               

              Form of Warrant

              Form of Paul, Hastings, Janofsky & Walker LLP Opinion

              Form of Venable LLP Opinion

              Form of Registration Rights
Agreement

            


    

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    This
SECURITIES PURCHASE
AGREEMENT (this “Agreement”), dated as
of May 10, 2004, is entered into among Capital Trust, Inc., a
Maryland corporation (the “Company”), W. R. Berkley Corporation, a
Delaware corporation (“Berkley”), and,
solely for purposes of Section 2.4 hereof, the holders of shares of Class A
Common Stock, par value $.01 per share, of the Company (the “Common Stock”)
identified on Schedule
A attached hereto (collectively, the “Stockholders”).  Berkley
and its designated controlled Affiliates identified on Schedule B attached
hereto are collectively referred to in this Agreement as the “Purchaser” (provided
that only Berkley shall be a direct party hereto and responsible for its
obligations hereunder).

     

    RECITALS

     

    WHEREAS, the Company desires
to sell to the Purchaser, and the Purchaser desires to purchase from the
Company, (1) on the date hereof (i) 1,310,000 shares (the “Tranche 1 Shares”) of
Common Stock and (ii) one or more warrant(s) in the form attached as Exhibit A hereto (the
“Warrant”)
initially exercisable for a total of 365,000 shares (the “Warrant Shares”) of
Common Stock and (2) on the Subsequent Closing Date (as defined below), 325,000
shares (the “Tranche 2
Shares” and, together with the Tranche 1 Shares and the Warrant Shares,
the “Shares”)
of Common Stock;

     

    NOW, THEREFORE, in
consideration of the mutual promises herein made, and in consideration of the
representations, warranties, and covenants herein contained, the Company and the
Purchaser agree as follows:

     

    All
capitalized terms used and not otherwise defined in this Agreement shall have
the definitions set forth on Annex I
hereto.

     

    ARTICLE
I

    Sale
of the Shares and the Warrant

     

    Section
1.1                      Authorization of Issuance
and Sale and Delivery of the Shares and the Warrant.

     

    (1)      Subject
to the terms and conditions hereof, the Purchaser agrees to purchase at the
Initial Closing (as defined below), and the Company agrees to sell and issue to
the Purchaser at the Initial Closing, the Tranche 1 Shares and the
Warrant.

     

    (2)      Subject
to the terms and conditions hereof, the Purchaser agrees to purchase at the
Subsequent Closing (as defined below), and the Company agrees to sell and issue
to the Purchaser at the Subsequent Closing, the Tranche 2 Shares.

     

    Section
1.2                      The Closings of the Sales of
the Shares and the Warrant.

     

    (1)      Subject
to the terms and conditions of this Agreement, the sale of the Tranche 1 Shares
and the Warrant by the Company to the Purchaser contemplated hereby shall take
place at a closing (the “Initial Closing”) on
the date hereof (the “Initial Closing
Date”), simultaneously with the execution and delivery of this Agreement,
at the offices of Paul, Hastings, Janofsky & Walker LLP, 75 East 55th
Street, New York, New York 10022 (the “Closing
Location”).  Subject to the terms and conditions of this
Agreement, the sale of the Tranche 2 Shares by the Company to the Purchaser
contemplated hereby shall take place at a closing (the “Subsequent Closing”)
at the Closing Location at 10:00 a.m., New York time, on the later of (a) June
18, 2004 or (b) the date that is two Business Days following the satisfaction or
waiver of all of the conditions contained herein (the “Subsequent Closing
Date”), or at such other time and date as may be agreed upon between the
Purchaser and the Company.  For the purposes of this Agreement, (i)
the Initial Closing and the Subsequent Closing may be referred to herein as a
“Closing” and
(ii) the Initial Closing Date and the Subsequent Closing Date may be referred to
herein as a “Closing
Date”.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    (2)      At
the Initial Closing, on the terms and subject to the conditions contained
herein, the Company shall issue and deliver the Tranche 1 Shares and the Warrant
against receipt by the Company of $30,654,000 by wire transfer of immediately
available funds to an account designated by the Company prior to the Initial
Closing in writing.  The Tranche 1 Shares and the Warrant shall be
evidenced by certificates, registered in the name of the Purchaser or the name
of the Purchaser’s nominee(s) or designee(s) identified to the Company at least
two Business Days prior to such Closing.

     

    (3)      At
the Subsequent Closing, on the terms and subject to the conditions contained
herein, the Company shall issue and deliver the Tranche 2 Shares against receipt
by the Company of $7,605,000 by wire transfer of immediately available funds to
an account designated by the Company prior to the Subsequent Closing in
writing.  The Tranche 2 Shares shall be evidenced by a certificate,
registered in the name of the Purchaser or the name of the Purchaser’s
nominee(s) or designee(s) identified to the Company at least two Business Days
prior to such Closing.

     

    ARTICLE
II

    Certain
Agreements

     

    Section
2.1                      Delivery of
Prospectus.  Concurrently with the execution and delivery of
this Agreement and the Initial Closing, the Company is delivering to the
Purchaser a final prospectus supplement relating to the offer and sale of the
Shares to the Purchaser together with a prospectus to be filed with the
Commission in accordance with Rule 424(b) under the Securities Act (the “Prospectus”) to amend
the prospectus forming part of the Company’s registration statement on Form S-3
(file number 333-111261) (the “Registration
Statement”).

     

    Section
2.2                      Filing of
Prospectus.  Concurrently with the Initial Closing, the Company
will file the Prospectus in the form delivered to the Purchaser with the
Commission pursuant to Rule 424(b) under the Securities Act.

     

    
      
         


      

      
        2

        
          

        

      

      
         


      

    

     

    Section
2.3                      Board of
Directors.  On the date hereof, the Company shall, consistent
with and subject to the Maryland General Corporation Law (“MGCL”), acting
through its board of directors (the “CT Board”), appoint
to the CT Board one (1) representative designated by the
Purchaser.  From and after the date hereof until the earlier of (i)
such time as the Purchaser collectively owns less than fifty percent (50%) of
the Shares purchased by the Purchaser hereunder and pursuant to the Warrant and
(ii) such time after May 10, 2007 as the Purchaser collectively owns less than
an aggregate of five (5%) of the Company’s outstanding shares of Common Stock on
a fully diluted basis assuming the conversion and exercise of outstanding
convertible or exercisable securities (the “Termination Date”),
the Company shall, consistent with and subject to the MGCL, acting through the
CT Board, nominate for election to the CT Board one (1) representative designed
by the Purchaser (the “Purchaser
Designee”).  At any time when the Purchaser shall have the
right to designate a representative for appointment, or nomination for election,
to the CT Board, pursuant to this Section 2.3, the Company shall give William R.
Berkley notice (in the same manner as notice is given to directors) and permit
William R. Berkley to attend as observer, all meetings of the CT
Board.

     

    Section
2.4                      Stockholder
Approval.

     

    (1)      From
and after the date hereof until the Termination Date, on each occasion at which
the holders of Common Stock of the Company meet, or act by written consent in
lieu of meeting, for the purpose of electing directors, each Stockholder shall
vote all shares of Common Stock they beneficially own or over which they have
voting control over for the election of the Purchaser Designee in accordance
with the provisions of Section 2.4(2) at such time as such designee stands for
election to the CT Board.

     

    (2)      From
and after the date hereof until the Termination Date, the Stockholders who are
directors of the Company shall, consistent with and subject to their duties as
directors under the MGCL, in their capacity as directors, take such action as
may reasonably be within their power to cause the CT Board to appoint, elect or
nominate for election to the CT Board the Purchaser Designee and shall promptly
provide prior written notice of the CT Board’s consideration of individuals to
be nominated for election as directors of CT, whereupon the Purchaser shall
promptly provide written notice of the name(s) of the Purchaser Designee
designated by them to the extent that the incumbent Purchaser Designee is unable
to stand for reelection for any reason or the Purchaser intends to designate an
individual to replace such designee and biographical information relating to
such designee in a form compliant with applicable securities laws and
regulations and with the charter and bylaws of the Company.  In the
absence of such notice from the Purchaser, the incumbent Purchaser Designee then
serving on the CT Board shall be deemed to be the Purchaser Designee designated
by the Purchaser.  From and after the date hereof until the
Termination Date, any Stockholder who is a director of the Company shall,
consistent with and subject to his duties as a director under the MGCL, in his
capacity as a director, recommend to the CT Board that the board nominate the
Purchaser Designee for, and actively solicit stockholder proxies in favor of his
or her, election as a director of the Company.

     

    
      
         


      

      
        3

        
          

        

      

      
         


      

    

     

    (3)      From
and after the date hereof until the Termination Date, the Stockholders shall not
take, or support the taking of, any action to remove as a director the Purchaser
Designee unless the Purchaser has requested that such director be removed (in
which case the Stockholders shall cooperate in effecting such removal and
electing a replacement).  In the event that the Purchaser Designee
ceases to serve as a director of the Company due to death, resignation or
removal of said director at any time prior to the Termination Date, the
Purchaser may submit written notice to the Stockholders designating an
individual to replace said Purchaser Designee.  From and after the
date hereof until the Termination Date, any Stockholder who is a director of the
Company shall, consistent with and subject to his duties as a director under the
MGCL, in his capacity as a director, promptly recommend that the CT Board
appoint such replacement designee as a director of the Company to fill any
vacancy resulting from the death, resignation or removal of the Purchaser
Designee and, when called for a vote of the CT Board, vote for such replacement
designee.

     

    (4)      At
the Company’s 2004 annual meeting of stockholders or at any adjournment or
postponement thereof, the Stockholders shall vote (or cause to be voted) all
shares of Common Stock they beneficially own or have voting control over in
favor of the issuance and sale of the Tranche 2 Shares and the Warrant
Shares.

     

    (5)      From
and after the date hereof until the earlier of (i) the Subsequent Closing Date
and (ii) the termination of this Agreement in accordance with Section 7.1
hereof, each Stockholder shall not sell, transfer or otherwise dispose of any of
the shares of Common Stock such Stockholder beneficially owns or over which such
Stockholder has voting control; provided, however, that the foregoing shall not
prohibit any Stockholder from pledging or creating any lien or granting a
security interest on any shares of Common Stock beneficially owned by such
Stockholder or over which such Stockholder has voting control.

     

    (6)      Notwithstanding
anything to the contrary herein, the rights and obligation contained in Sections
2.4(5) shall terminate and shall be of no further legal force on the earlier of
(i) the Subsequent Closing Date and (ii) the termination of this Agreement in
accordance with Section 7.1 hereof.

     

    Section
2.5                      Post-Closing
Compliance.  From and after the Initial Closing Date until the
Termination Date, the Company will use its commercially reasonable efforts to
comply with all applicable rules and regulations of the Commission and the New
York Stock Exchange or such other securities exchange or quotation system on
which the Common Stock is then listed for trading or quoted, as the case may
be.

     

    Section
2.6                      Commercially Reasonable
Efforts.  Upon the terms and subject to the conditions of this
Agreement, from and after the Initial Closing Date until the Termination Date,
the Company shall use its commercially reasonable efforts to take, or cause to
be taken, all action, and to do, or cause to be done, all things necessary,
proper or advisable consistent with applicable law to consummate and make
effective in the most expeditious manner practicable the transactions
contemplated hereby.

     

    
      
         


      

      
        4

        
          

        

      

      
         


      

    

     

    Section
2.7                      Purchaser Lock-Up
Agreement.

     

    From and
after the date hereof until November 11, 2004, the Purchaser shall not sell,
transfer or otherwise dispose of any of the Shares or Warrants beneficially
owned by the Purchaser or over which the Purchaser has voting control (the
“Beneficially Owned Securities”); provided, however, that the foregoing shall
not prohibit the Purchaser from pledging or creating any lien or granting a
security interest on any of the Beneficially Owned Securities or transferring
any of the Beneficially Owned Securities to any controlled Affiliate of Berkley;
provided, further, that, if as a result of action taken by the Company, the
Purchaser shall at any time beneficially own Common Stock (including any Warrant
Shares obtained upon exercise of the Warrants) representing 20% or more of the
outstanding shares of voting stock of the Company, the foregoing shall not
prohibit the Purchaser from selling, transferring or otherwise disposing of up
to such number of Shares as shall be necessary so that after such sale, transfer
or disposition, the Purchaser shall beneficially own shares of Common Stock
representing less than 20% of the outstanding shares of voting stock of the
Company.

     

    ARTICLE
III

    Conditions
to the Obligations of the Purchaser

     

    The
obligations of the Purchaser to consummate the transactions to be performed by
it in connection with any Closing are subject to satisfaction of each of the
following conditions as of such Closing, unless otherwise waived in writing by
the Purchaser:

     

    Section
3.1                      Obligations.

     

    The
obligations of the Company set forth in Article II hereof shall be complied with
and performed in all material respects by the Company.

     

    Section
3.2                      Representations and
Warranties.

     

    The
representations and warranties of the Company set forth in Article V hereof
shall be true, correct and complete in all material respects on and as of the
applicable Closing Date (other than those that are qualified by a reference to
materiality, which representations and warranties as so qualified shall be true,
correct and complete in all respects).

     

    Section
3.3                      Absence of
Litigation.

     

    There
shall not be (a) any Order of any nature issued by a Governmental Entity with
competent jurisdiction directing that the transactions provided for herein or
any material aspect of them not be consummated as herein provided or (b) any
Proceeding pending wherein an Order would prevent the performance of this
Agreement or the consummation of any material aspect of the transactions or
events contemplated by this Agreement, declare unlawful any material aspect of
the transactions or events contemplated by this Agreement, cause any material
aspect of the transactions contemplated by this Agreement to be rescinded or be
reasonably likely to have a Material Adverse Effect on the Company or the
Purchaser.

     

    
      
         


      

      
        5

        
          

        

      

      
         


      

    

     

    Section
3.4                      Consents and
Approvals.

     

    All
consents, approvals or authorizations of, or declarations to or filings with,
any Governmental Entity necessary to permit the Company and the Purchaser to
perform their obligations under this Agreement and consummate the transactions
contemplated thereby have been obtained or made and are in full force and
effect.

     

    Section
3.5                      No Change in
Law.

     

    There
shall not have been any change in any Law applicable to the Purchaser that would
prevent the performance of this Agreement or the consummation by the Purchaser
of any material aspect of the transactions contemplated hereby.

     

    Section
3.6                      Opinion of
Counsel.

     

    The
Purchaser shall have received an opinion of Paul, Hastings, Janofsky &
Walker LLP, counsel to the Company, in the form attached as Exhibit B hereto, and
an opinion of Venable LLP, Maryland counsel to the Company, in the form attached
as Exhibit C
hereto.  For purposes of the Subsequent Closing, the Purchaser shall
have received a bringdown of the opinions referred to in this Section 3.6 as of
the Subsequent Closing Date.

     

    Section
3.7                      NYSE
Approval.

     

    The New
York Stock Exchange shall have admitted the Tranche 1 Shares and the Tranche 2
Shares and Warrant Shares to listing, subject to official notice of issuance
and, in the case of the Tranche 2 Shares and the Warrant Shares, subject to
notice of shareholder approval of the issuance of the Tranche 2 Shares and the
Warrant Shares.

     

    Section
3.8                      Registration Rights
Agreement.

     

    The
Registration Rights Agreement, in the form attached as Exhibit D hereto,
shall have been executed by the Company.

     

    Section
3.9                      Conditions Applicable to
Subsequent Closing.

     

    In
addition to the foregoing conditions, the obligations of the Purchaser to
consummate the transactions to be performed by it in connection with the
Subsequent Closing are subject to satisfaction of each of the following
conditions, unless otherwise waived in writing by the Purchaser:

     

    
      
         


      

      
        6

        
          

        

      

      
         


      

    

     

    (1)      during
the period from the date of this Agreement to the Subsequent Closing Date, there
shall not have occurred any event that, individually or when taken together with
any other event or circumstance, has had or could reasonably be expected to have
a Material Adverse Effect on the Company;

     

    (2)      the
issuance of the Tranche 2 Shares and the Warrant Shares, shall have been
approved by an affirmative vote of a majority of the votes cast at the Company’s
2004 annual meeting of Stockholders or at any adjournment or postponement
thereof in accordance with applicable New York Stock Exchange rules (the “Stockholder
Approval”); and

     

    (3)      in
no way limiting the foregoing, the representations and warranties of the Company
set forth in Section 5.18 and Section 5.19 hereof shall be true, correct and
complete in all material respects on and as of the Subsequent Closing Date (as
if made on the Subsequent Closing Date) (other than those that are qualified by
a reference to materiality, which representations and warranties as so qualified
shall be true, correct and complete in all respects).

     

    ARTICLE
IV

    Conditions
to Obligation of the Company

     

    The
obligations of the Company to consummate the transactions to be performed by it
in connection with any Closing are subject to satisfaction of each of the
following conditions as of such Closing, unless otherwise waived in writing by
the Company:

     

    Section
4.1                      Representations and
Warranties.

     

    The
representations and warranties of the Purchaser set forth in Article VI hereof
shall be true, correct and complete in all material respects on and as of the
applicable Closing Date (other than those that are qualified by a reference to
materiality, which representations and warranties as so qualified shall be true,
correct and complete in all respects).

     

    Section
4.2                      Absence of
Litigation.

     

    There
shall not be (a) any Order of any nature issued by a Governmental Entity with
competent jurisdiction directing that the transactions provided for herein or
any material aspect of them not be consummated as herein provided or (b) any
Proceeding pending wherein an Order would prevent the performance of this
Agreement or the consummation of any material aspect of the transactions or
events contemplated hereby, declare unlawful any material aspect of the
transactions or events contemplated by this Agreement, or cause any material
aspect of any transaction contemplated by this Agreement to be rescinded or be
reasonably likely to have a Material Adverse Effect on the Company or the
Purchaser.

     

    
      
         


      

      
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    Section
4.3                      Consents and
Approvals.

     

    All
consents, approvals or authorizations of, or declarations to or filings with,
any Governmental Entity necessary to permit the Company and the Purchaser to
perform their obligations under this Agreement and consummate the transactions
contemplated thereby have been obtained or made and are in full force and
effect.

     

    Section
4.4                      No Change in
Law.

     

    There
shall not have been any change in any Law applicable to the Company that would
prevent the performance of this Agreement or the consummation by the Company of
any material aspect of the transactions contemplated hereby.

     

    Section
4.5                      NYSE
Approval.

     

    The New
York Stock Exchange shall have admitted the Tranche 1 Shares and the Tranche 2
Shares and Warrant Shares to listing, subject to official notice of issuance
and, in the case of the Tranche 2 Shares and the Warrant Shares, subject to
notice of shareholder approval of the issuance of the Tranche 2 Shares and the
Warrant Shares.

     

    Section
4.6                      Conditions Applicable to
Subsequent Closing.

     

    (1)      In
addition to the foregoing conditions, the obligations of the Company to
consummate the transactions to be performed by it in connection with the
Subsequent Closing are subject to the receipt of the Stockholder
Approval.

     

    ARTICLE
V

    Representations
and Warranties of the Company

     

    As an
inducement to the Purchaser to enter into and perform its obligations under this
Agreement, the Company hereby represents and warrants as of the Initial Closing
and the Subsequent Closing to the Purchaser as follows:

     

    Section
5.1                      Registration
Statement.

     

    (1)      The
Company meets the requirements for use of Form S-3 under the Securities Act and
the Registration Statement has been filed with the Commission for
registration under the Securities Act of the offering and sale of debt
and equity securities of the Company and has been declared effective under the
Securities Act and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted, or to the best knowledge of the Company, are contemplated by
the Commission. 

     

    
      
         


      

      
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    (2)      On
the effective date of the Registration Statement (the “Effective Date”), the
Registration Statement did, and when the Prospectus is first filed with the
Commission in accordance with Rule 424(b) under the Securities Act and
at the Closing, the Prospectus will, comply in all material respects with
the applicable requirements of the Securities Act and the Exchange Act and the
respective rules thereunder; on the Effective Date, the Registration Statement
did not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and on the date of any filing pursuant to
Rule 424(b) and at the Closing, the Prospectus will not, include
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

     

    Section
5.2                      Organization; Good Standing;
Qualification and Power.

     

    The
Company and each of its Subsidiaries are duly organized, validly existing and in
good standing under the Laws of their respective jurisdictions of formation,
have all requisite power (corporate or otherwise) to carry on their respective
businesses as presently being conducted and are qualified to do business and in
good standing in every jurisdiction in which the failure so to qualify or be in
good standing could reasonably be expected to have a Material Adverse Effect on
the Company.

     

    Section
5.3                      Authorization;
Enforceability; Corporate and Other Proceedings.

     

    (1)      The
Company has all requisite power and authority (corporate or otherwise) to
execute and deliver this Agreement and to perform its obligations
hereunder.  This Agreement has been duly authorized by all necessary
corporate action (corporate or otherwise) on the part of the Company, and this
Agreement has been duly executed and delivered by the Company, and, assuming due
execution and delivery of this Agreement by the Purchaser, constitutes the valid
and legally binding obligation of the Company, enforceable in accordance with
its terms and conditions, except to the extent that its enforceability may be
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
similar Laws affecting the enforcement of creditors’ rights generally and to
general equitable principles.

     

    (2)      The
authorization, issuance, sale and delivery of the Shares and the Warrant have
been duly authorized by all requisite action of the CT Board and, to the extent
required by applicable Law or the rules of the New York Stock Exchange as of the
Subsequent Closing Date, will have been duly approved by the Company’s
stockholders.  The Shares being issued as of the applicable Closing
Date will be validly issued and outstanding, fully paid and nonassessable, with
no personal Liability attaching to the ownership thereof, free and clear of any
Liens whatsoever and with no restrictions on the voting rights thereof, and
other incidents of record and beneficial ownership pertaining thereto, except as
provided in the Company’s charter.  The Warrant Shares, if and when
issued in accordance with the terms of the Warrant and this Agreement, will be
validly issued and outstanding, fully paid and nonassessable, with no personal
Liability attaching to the ownership thereof, free and clear of any Liens
whatsoever and with no restrictions on the voting rights thereof, and other
incidents of record and beneficial ownership pertaining thereto, except as
provided in the Company’s charter.

     

    
      
         


      

      
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    Section
5.4                      Non
Contravention.

     

    The
execution, delivery and performance by the Company of this Agreement, the
consummation of the transactions contemplated hereby and compliance with the
provisions thereof, including the issuance, sale and delivery of the Shares and
the Warrant have not, do not and shall not, (a) violate any provision of the
Fundamental Documents of the Company, (b) violate any Law to which the Company
is subject, (c)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify
or cancel, or require any notice under any material contract to which the
Company is a party or (d) result in the imposition of any Lien upon any of the
Assets of the Company, except where such violation, conflict, default,
acceleration, termination, modification, cancellation or imposition with respect
to clauses (b), (c) and (d) could not reasonably be expected to have a Material
Adverse Effect on the Company.

     

    Section
5.5                      Anti-Takeover Law and REIT
Restrictions.

     

    (1)      The
CT Board has amended the Amended and Restated Bylaws of the Company to provide
that Title 3, Subtitle 7 of the Corporations and Associations Article of the
Annotated Code of Maryland (or any successor statute) shall not apply to any
acquisition of shares of Class A Common Stock by the Purchaser and that such
amendment shall not be repealed without the consent of Berkley.

     

    (2)      The
CT Board has resolved that the Purchaser shall be excluded from the definition
of “interested stockholder” as a result of the approval of the offering of the
Shares and Warrant pursuant to § 3-601(j)(3) of the MGCL.

     

    (3)      The
CT Board has resolved that, pursuant to Section 7.2.7 of the Company’s charter,
William R. Berkley and up to one other major shareholder of Berkley, who shall
be identified in writing to the Company by Berkley upon the request of the
Company from time to time (the “Berkley
Shareholder”), shall be exempt from the Aggregate Stock Ownership Limit
(as defined in the Company’s charter) and the Common Stock Ownership Limit (as
defined in the Company’s charter), and an Excepted Holder Limit (as defined in
the Company’s charter) of 6.0% and 4.0% of the outstanding Common Stock shall be
established for William R. Berkley and the Berkley Shareholder,
respectively.

     

    Section
5.6                      Capitalization of the
Company.

     

    (1)      As
of the Initial Closing Date, the authorized capital stock of the Company and the
issued and outstanding shares of the capital stock of the Company after giving
effect to the sale of the Tranche 1 Shares and the Tranche 2 Shares is as set
forth on Schedule
5.6.

     

    
      
         


      

      
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    (2)      Except
as contemplated by the Agreement or as otherwise set forth on Schedule 5.6,
there are, and immediately after consummation of the Closing there will be, no
(i) outstanding warrants, options, agreements, convertible securities or
other commitments or instruments pursuant to which the Company is or may become
obligated to issue or sell any shares of its capital stock or other securities
or (ii) preemptive or similar rights to purchase or otherwise acquire shares of
the capital stock or other securities of the Company pursuant to any provision
of Law, the Company’s Fundamental Documents or any contract, “shareholders’
rights plan”, “poison pill” or similar plan, arrangement or scheme to which the
Company is a party.

     

    (3)      All
shares of the capital stock and other securities issued by the Company have been
issued in transactions in accordance with applicable foreign, state and federal
Laws and regulations governing the sale and purchase of securities.

     

    Section
5.7                      Use of
Proceeds.

     

    Unless
otherwise consented to in writing by the Purchaser, the proceeds received by the
Company from the sale of the Shares and the Warrant and, if and when issued, the
Warrant Shares, shall be used by the Company for general corporate purposes,
including funding balance sheet investments, capital commitments to private
equity funds, repayment of indebtedness, working capital purposes and potential
business acquisitions.

     

    Section
5.8                      SEC
Reports.

     

    The
Company has since its inception filed all required forms, reports and documents
required to be filed by it (“SEC Reports”) with
the Commission when due in accordance with the Securities Act and Exchange
Act.  As of their respective dates, the SEC Reports complied in all
material respects with all applicable requirements of the Exchange Act or the
Securities Act, as the case may be.  As of their respective dates,
none of the SEC Reports contained any untrue statement of a material fact or
omitted to state a material fact required to be stated or incorporated by
reference therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.

     

    Section
5.9                      Financial
Statements.

     

    The
consolidated financial statements of the Company contained in the SEC Reports
(the “Financial
Statements”) complied as to form in all material respects with the
published rules and regulations of the Commission with respect thereto, were
prepared in accordance with GAAP applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and fairly
present in all material respects, in conformity with GAAP (except as may be
indicated in the notes thereto), the consolidated financial position of the
Company and its consolidated Subsidiaries as of the dates thereof and their
consolidated results of operations and changes in financial position for the
periods then ended (subject to normal year-end adjustments in the case of any
unaudited interim financial statements).

     

    
      
         


      

      
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    Section
5.10                      No Material Adverse
Change.

     

    Since
December 31, 2003, except in each case as disclosed or contemplated in the
Prospectus (A) there has been no material adverse change in or affecting the
business, Assets, condition (financial or otherwise), operating results or
Liabilities of the Company and its Subsidiaries taken as a whole, whether or not
arising in the ordinary course of business, (B) there have been no transactions
entered into by the Company or any of its Subsidiaries which are material with
respect to the Company and its Subsidiaries taken as a whole, other than those
in the ordinary course of business, and (C) except in the ordinary course of
business, there has not been any material decrease in the total Assets of the
Company and its Subsidiaries, taken as a whole, or any material increase in the
total Liabilities of the Company and its Subsidiaries, taken as a
whole.

     

    Section
5.11                      No Consent or Approval
Required.

     

    Except as
set forth on Schedule
5.11, no material consent, approval or authorization of, or declaration
to or filing with, any Person is required by the Company for the valid
authorization, execution and delivery by the Company of this Agreement or for
its consummation of the transactions contemplated hereby or for the valid
authorization, issuance and delivery of the Shares and the Warrant, other than
those consents, approvals, authorizations, declarations or filings which have
been obtained or made, as the case may be.

     

    Section
5.12                      New York Stock Exchange
Listing.

     

    The New
York Stock Exchange has admitted the Tranche 1 Shares and the Tranche 2 Shares
and Warrant Shares to listing, subject to official notice of issuance and, in
the case of the Tranche 2 Shares and the Warrant Shares, subject to notice of
shareholder approval of the issuance of the Tranche 2 Shares and the Warrant
Shares.

     

    Section
5.13                      Tax
Matters.

     

    The CT
Board has authorized the Company to file its tax returns to be taxed as a real
estate investment trust (a “REIT”) under the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the “Code”), for taxable
year ending December 31, 2003, such authorization has not been amended, revoked
or rescinded, the Company has operated in conformity with the requirements for
qualification as a REIT under the Code since January 1, 2003 and the Company
intends to properly and formally elect to be taxed as a REIT when it files its
federal income tax returns for the taxable year ending December 31, 2003 on or
before September 15, 2004.

     

    Section
5.14                      Legal
Compliance.

     

    The
Company and its Subsidiaries are in compliance with, and the respective
businesses of the Company and its Subsidiaries are being conducted in compliance
with, all applicable Laws, Orders and Permits which are necessary to conduct the
business now operated by them, and neither the Company nor any of its
Subsidiaries has received written notice of any Proceeding alleging any failure
to so comply, except in each case such as could not reasonably be expected to
have a Material Adverse Effect.  The material Permits under which the
Company or any of its Subsidiaries is operating or bound (a) constitute all
material Permits used or required in the conduct of the respective businesses of
the Company and its Subsidiaries as presently conducted and (b) are in full
force and effect, except in each case as could not reasonably be expected to
have a Material Adverse Effect.

     

    
      
         


      

      
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    Section
5.15                      Litigation.

     

    Except as
disclosed in the Registration Statement, there is no Proceeding pending or, to
the knowledge of the Company, threatened against, or affecting the Assets of the
Company or any of its Subsidiaries or any of their respective predecessors, in
each case which could reasonably be expected to have a Material Adverse
Effect.

     

    Section
5.16                      Material
Contracts.

     

    Neither
the Company nor any of its Subsidiaries is in default, and no event has occurred
which, with due notice or lapse of time or both, would constitute such a default
under, any material contract, agreement, instrument, commitment and other
arrangement to which the Company or any of its Subsidiaries is a party or
otherwise relating to or affecting any of their respective assets, including,
without limitation, employment, severance or consulting agreements, loan, credit
or security agreements, joint venture agreements and license and distribution
agreements, except in each case such as could not reasonably be expected to have
a Material Adverse Effect.

     

    Section
5.17                      Brokers or
Finders.

     

    The
Company has not retained any investment banker, broker or finder in connection
with the purchase of the Shares and the Warrant.

     

    Section
5.18                      Liabilities.

     

    As of the
Initial Closing Date, to the best knowledge of the Company, the Company has no
liability or obligation, absolute or contingent (individually or in the
aggregate), including, without limitation, any tax liability due and payable,
which is not reflected on the consolidated balance sheet of the Company as of
December 31, 2003 contained in the Financial Statements for the year ended
December 31, 2003 (the “Balance Sheet”),
other than liabilities and obligations incurred after the date of the Balance
Sheet in the ordinary course of business.  To the best knowledge of
the Company, there were no “loss contingencies” (as such term is used in
Statement of Financial Accounting Standards No. 5 issued by the Financial
Accounting Standards Board in March 1975) that were not adequately provided for
on the Balance Sheet.

     

    
      
         


      

      
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    Section
5.19                      Loan and Investment
Losses.

     

    As of the
Initial Closing Date, to the best knowledge of the Company, except as set forth
on Schedule 5.19 hereof,
none of the Company’s loans are in default and the Company has not received
notice from any borrower under any of its loans that a default is imminent and
all of the Company’s investments are making payments in accordance with their
contractual terms.

     

    ARTICLE
VI

    Representations
and Warranties of the Purchaser

     

    As an
inducement to the Company to enter into and perform its obligations under this
Agreement, the Purchaser hereby represents and warrants as of the Initial
Closing and the Subsequent Closing to the Company as follows:

     

    Section
6.1                      Organization; Good Standing;
Qualification and Power.

     

    The
Purchaser is a corporation duly incorporated, validly existing and in good
standing under the Laws of its jurisdiction of formation, has all requisite
power (corporate or otherwise) to carry on its business as presently being
conducted and is qualified to do business and in good standing in every
jurisdiction in which the failure so to qualify or be in good standing could
reasonably be expected to have a Material Adverse Effect on the
Purchaser.

     

    Section
6.2                      Authorization;
Enforceability; Corporate and Other Proceedings.

     

    The
Purchaser has all requisite power and authority (corporate or otherwise) to
execute and deliver this Agreement and any and all instruments necessary or
appropriate in order to effectuate fully the terms and conditions of this
Agreement and all related transactions and to perform its obligations hereunder
and thereunder.  This Agreement, and the transactions contemplated
hereby have been duly authorized by all necessary action (corporate or other) on
the part of the Purchaser, and this Agreement has been duly executed and
delivered by the Purchaser, and, assuming due execution and delivery of this
Agreement by the Company, constitutes the valid and legally binding obligation
of the Purchaser, enforceable against the Purchaser in accordance with its terms
and conditions, except to the extent that its enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws
affecting the enforcement of creditors’ rights generally and to general
equitable principles.

     

    Section
6.3                      Non
Contravention

     

    The
execution, delivery and performance by the Purchaser of this Agreement, the
consummation of the transactions contemplated hereby and compliance with the
provisions hereof, including the purchase of the Shares and the Warrant have
not, do not and shall not, (a) violate any provision of the Fundamental
Documents of the Purchaser, (b) violate any Law to which the Purchaser is
subject or (c) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify or cancel, or require any notice under any material contract
to which the Purchaser is a party, except where such violation, conflict,
default, acceleration, termination, modification or cancellation with respect to
clauses (b) and (c) could not reasonably be expected to have a Material Adverse
Effect on the Purchaser.

     

    
      
         


      

      
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    Section
6.4                      No Consent or Approval
Required.

     

    No
material consent, approval or authorization of, or declaration to or filing
with, any Person is required by the Purchaser for the valid authorization,
execution and delivery by the Purchaser of this Agreement or for its
consummation of the transactions contemplated hereby other than those consents,
approvals, authorizations, declarations or filings which have been obtained or
made, as the case may be.

     

    Section
6.5                      Beneficial
Ownership.

     

    As of the
Initial Closing Date, William R. Berkley is currently the owner of less than 15%
of the outstanding shares of Berkley and the other Purchasers.  For
purposes of the foregoing, “own” means ownership or determined in accordance
with Section 856(h) of the Internal Revenue Code of 1986, as
amended.

     

    Section
6.6                      Brokers or
Finders.

     

    The
Purchaser has not retained any investment banker, broker or finder in connection
with the purchase of the Shares and the Warrant.

     

    ARTICLE
VII

    Termination

     

    Section
7.1                      Termination
Events.

     

    This
Agreement may, by notice given prior to or at the Subsequent Closing, be
terminated:

     

    (1)      by
either the Company or the Purchaser if a material breach or default of any
provision of this Agreement has been committed by the other party which would
make the conditions to this Agreement incapable of being satisfied; provided
that neither party may terminate this Agreement prior to the date set forth in
paragraph (3) below if the breaching or defaulting party has not had an adequate
opportunity to cure such breach or default;

     

    (2)      by
mutual consent of the Company and the Purchaser;

     

    (3)      by
the Purchaser or the Company if the Stockholder Approval has not been obtained
on or before June 25, 2004; or

     

    
      
         


      

      
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    (4)      by
either the Company or the Purchaser if the Subsequent Closing has not occurred
(other than through the failure of any party seeking to terminate this Agreement
to comply fully with its obligations under this Agreement) on or before June 30,
2004 or such later date as the parties may agree upon.

     

    Section
7.2                      Effect of
Termination.

     

    Each
party’s right of termination under Section 7.1 is in addition to any other
rights it may have under this Agreement or otherwise, and the exercise of a
right of termination will not be an election of remedies.  If this
Agreement is terminated pursuant to Section 7.1, all further obligations of
the parties under this Agreement will terminate, except that the obligations in
Sections 8.1 and 8.2 and Article IX will survive; provided, however, that if this
Agreement is terminated by a party because of the breach or default of the
Agreement by the other party or because one or more of the conditions to the
terminating party’s obligations under this Agreement is not satisfied as a
result of the other party’s failure to comply with its obligations under this
Agreement, the terminating party’s right to pursue all legal remedies will
survive such termination unimpaired.

     

    ARTICLE
VIII

    Indemnification

     

    Section
8.1                      Indemnification
Generally.

     

    The
Company, on the one hand, and the Purchaser, on the other hand (each an “Indemnifying Party”),
shall indemnify the other from and against any and all losses, damages,
liabilities, claims, charges, actions, proceedings, demands, judgments,
settlement costs and expenses of any nature whatsoever (including, without
limitation, reasonable attorneys’ fees and expenses) or deficiencies
(collectively, “Losses”) resulting
from any breach of a representation, warranty or covenant by the Indemnifying
Party and all claims, charges, actions or proceedings incident to or arising out
of the foregoing.  The Company shall further indemnify the Purchaser
for any and all Losses incurred by the Purchaser which arise out of any claim by
or on behalf of any stockholder, security holder, private equity fund investor
or joint venture partner of the Company in connection with any act or omission
by the Company in respect of its obligations under this
Agreement.  Except with respect to third party claims being defended
in good faith or claims for indemnification with respect to which there exists a
good faith dispute, the Indemnifying Party shall satisfy its obligations
hereunder within thirty (30) days of receipt of a notice of claim under this
Section 8.1.

     

    Section
8.2                      Indemnification Procedures
For Third Party Claims.

     

    If a
claim by a third party is made against a Person entitled to indemnification
under this Article VIII (an “Indemnified Party”)
and such Indemnified Party intends to seek indemnity with respect thereto from
any Indemnifying Party, such Indemnified Party shall give notice in writing as
promptly as reasonably practicable to each such Indemnifying Party of any action
commenced against or by it in respect of which indemnity may be sought
hereunder, but failure to so notify an Indemnified Party shall not relieve such
Indemnifying Party from any liability that it may have otherwise than on account
of this indemnity agreement so long as such failure shall not have materially
prejudiced the position of the Indemnifying Party.  Upon such
notification, the Indemnifying Party shall assume the defense of such action
brought by a third party, and after such assumption, the Indemnified Party shall
not be entitled to reimbursement of any expenses incurred by it in connection
with such action except as described below.  In any such action, any
Indemnified Party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
unless (i) the Indemnifying Party shall have failed to promptly assume and
thereafter vigorously conduct such defense, (ii) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the contrary or (iii) the named
parties in any such action (including any impleaded parties) include both the
Indemnifying Party and the Indemnified Party and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
or conflicting interests between them.  No Indemnifying Party, in the
defense of a third party claim shall, except with the consent of the Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
of such claim.  The Indemnifying Party shall not be liable for any
settlement of any proceeding effected without its written consent (which shall
not be unreasonably withheld or delayed by such Indemnifying Party), but if
settled with such consent or if there be final judgment for the plaintiff, the
Indemnifying Party shall indemnify the Indemnified Party from and against any
loss, damage or liability by reason of such settlement or judgment.

     

    
      
         


      

      
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    Section
8.3                      Survival of Representations,
Warranties, Agreements, Etc.

     

    All
representations and warranties contained in this Agreement or made in writing by
or on behalf of the Company in connection with the transactions contemplated by
this Agreement shall survive for the duration of any statutes of limitation
applicable thereto, the execution and delivery of this Agreement, any
investigation at any time made by the Company, the Purchaser or on such party’s
behalf, the purchase of the Shares by the Purchaser under this Agreement and any
disposition of or payment on the Shares.  All statements contained in
any certificate or other instrument delivered to the Purchaser by or on behalf
of the Company pursuant to this Agreement shall be deemed representations and
warranties of the Company under this Agreement.  Except as otherwise
provided herein, all covenants and agreements contained herein shall survive for
the duration of any statutes of limitations applicable thereto or until, by
their respective terms, they are no longer operative.

     

    
      
         


      

      
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    ARTICLE
IX

    Miscellaneous

     

    Section
9.1                      Expenses and
Taxes.

     

    (1)      At
each Closing, the Company shall pay fifty percent (50%) of all of the reasonable
out-of-pocket expenses (including but not limited to attorneys’ and accountants’
fees and expenses) of the Purchaser arising in connection with the preparation,
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby; provided, however, that the Company shall not
be required to pay more than $50,000 of such expenses in the
aggregate.

     

    (2)      Subject
to Section 9.1(1), each party to this Agreement shall bear its own respective
costs and expenses incurred in connection with the preparation, execution and
delivery of this Agreement and the agreements and consummation of the
transactions contemplated hereby.

     

    (3)      All
transfer, stamp (including documentary stamp Taxes, if any), and other similar
Taxes with respect to the purchase and sale of the Shares, shall be borne by the
Company.

     

    Section
9.2                      Further
Assurances.

     

    The
Purchaser and the Company shall duly execute and deliver, or cause to be duly
executed and delivered, at their own cost and expense, such further instruments
and documents and to take all such action, in each case as may be necessary or
proper in the reasonable judgment of the other party to carry out the provisions
and purposes of this Agreement.

     

    Section
9.3                      Public
Announcement.

     

    The
Purchaser and the Company will consult with each other before issuing any press
release or otherwise making any public statements with respect to the
transactions contemplated by this Agreement, and shall not issue any such press
release or make any such public statement prior to such consultation, except as
may be required based upon the reasonable opinion of counsel by applicable law
or by obligations pursuant to any listing agreement with any national securities
exchange or transaction reporting system or automated quotation
system.

     

    Section
9.4                      No Third Party
Beneficiaries.

     

    Except as
expressly provided herein, this Agreement shall not confer any rights or
remedies upon any Person other than the parties hereto and their respective
successors and permitted assigns.

     

    
      
         


      

      
        18

        
          

        

      

      
         


      

    

     

    Section
9.5                      Entire
Agreement.

     

    This
Agreement constitutes the entire agreement among the parties hereto and
supersedes any prior understandings, agreements or representations by or among
such parties, written or oral, that may have related in any way to the subject
matter of this Agreement.

     

    Section
9.6                      Successors and
Assigns.

     

    This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.  No party may
assign either this Agreement or any of its rights, interests, or obligations
hereunder without the prior written approval of the other party; provided, however, that the
Berkley may assign all or any of its rights and obligations hereunder to one or
more designated controlled Affiliates without such prior written approval
provided that Berkley remains responsible for the obligations under this
Agreement with respect to such assignee.

     

    Section
9.7                      Counterparts.

     

    This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.

     

    Section
9.8                      Notices.

     

    All
notices, requests, demands, claims, and other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered personally,
telecopied, sent by internationally-recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):

     

    If to the
Company, to:

     

    Capital
Trust, Inc.

    410 Park
Avenue, 14th Floor

    New York,
New York 10022

    Telephone:  (212)
655-0220

    Telecopy:   (212)
655-0044

    Attention:  John
R. Klopp

                        Chief
Executive Officer

     

    with a
copy to:

     

    Paul,
Hastings, Janofsky & Walker LLP

    75 East
55th Street

    New York,
New York  10022

    Telephone:  (212)
318-6000

    Telecopy:   (212)
319-4090

    Attention:  Michael
L. Zuppone, Esq.

     

    
      
         


      

      
        19

        
          

        

      

      
         


      

    

     

    If to the
Purchasers:

     

    W. R.
Berkley Corporation

    475
Steamboat Road

    Greenwich,
Connecticut 06830

    Telephone:
(203) 629-3000

    Telecopy:
(203) 769-4098

    Attention:  Ira
S. Lederman, Esq.

                        General
Counsel

     

    with a
copy to:

     

    Willkie
Farr & Gallagher LLP

    787
Seventh Avenue

    New York,
New York 10019-6099

    Telephone:
(212) 728-8000

    Telecopy:
(212) 728-8111

    Attention:
Gordon R. Caplan, Esq.

     

    All such
notices and other communications shall be deemed to have been given and received
(i) in the case of personal delivery, on the date of such delivery, (ii) in the
case of delivery by telecopy, on the date of such delivery, (iii) in the case of
delivery by internationally-recognized overnight courier, on the third Business
Day following dispatch and (iv) in the case of mailing, on the seventh Business
Day following such mailing.

     

    Section
9.9                      Governing Law; Submission to
Jurisdiction.

     

    This
agreement shall be governed by and construed in accordance with the internal
laws of the state of New York, without regard to the principles of conflicts of
laws thereof.  All actions and proceedings arising out of or relating
to this Agreement shall be heard and determined in a New York State or federal
court sitting in the City of New York, and the parties hereto irrevocably submit
to the exclusive jurisdiction of such courts in any such action or proceeding
and irrevocably waive the defense of an inconvenient forum to the maintenance of
any such action or proceeding (and the parties agree not to commence any actions
or proceedings relating hereto except in such courts).  The parties
hereby irrevocably and unconditionally waive any objection to the laying of
venue of any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in the courts of the State of New York or the
United States of America located in the State of New York, and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.

     

    
      
         


      

      
        20

        
          

        

      

      
         


      

    

     

    Section
9.10                      Amendments and
Waivers.

     

    No
amendment of any provision of this Agreement shall be valid unless the same
shall be in writing and signed by all of the parties.  No waiver by
any party of any default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any prior or
subsequent default, misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.

     

    Section
9.11                      Incorporation of
Schedules.

     

    The
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.

     

    Section
9.12                      Construction.

     

    Where
specific language is used to clarify by example a general statement contained
herein, such specific language shall not be deemed to modify, limit or restrict
in any manner the construction of the general statement to which it
relates.  The use in this Agreement of the term “including” means
“including, without
limitation.”  The language used in this Agreement shall be
deemed to be the language chosen by the parties to express their mutual intent,
and no rule of strict construction shall be applied against any
party.

     

    Section
9.13                      Interpretation.

     

    Unless
otherwise indicated, references to “$” are references to
the U.S. dollar.  Accounting terms used but not otherwise defined
herein shall have the meanings given to them under GAAP.  As used in
this Agreement (including all Schedules and amendments hereto), the masculine,
feminine and neuter gender and the singular or plural number shall be deemed to
include the others whenever the context so requires.  References to
Articles and Sections refer to articles and sections of this
Agreement.  Similarly, references to Schedules refer to schedules
attached to this Agreement.  Unless the content requires otherwise,
words such as “hereby,” “herein,” “hereinafter,” “hereof,” “hereto,” “hereunder” and words
of like import refer to this Agreement.  The article and section
headings contained in this Agreement are inserted for convenience only and shall
not affect in any way the meaning or interpretation of this
Agreement.

     

    Section
9.14                      Severability.

     

    It is the
desire and intent of the parties that the provisions of this Agreement be
enforced to the fullest extent permissible under the Laws and public policies
applied in each jurisdiction in which enforcement is
sought.  Accordingly, if any particular provision of this Agreement
shall be adjudicated by a court of competent jurisdiction to be invalid,
prohibited or unenforceable for any reason, such provision, as to such
jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of this
Agreement or affecting the validity or enforceability of such provision in any
other jurisdiction.  Notwithstanding the foregoing, if such provision
could be more narrowly drawn so as not to be invalid, prohibited or
unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so
narrowly drawn, without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.

     

    
      
         


      

      
        21

        
          

        

      

      
         


      

    

     

    Section
9.15                      Waiver of Jury
Trial.

     

    EACH
OF THE PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER DOCUMENT.

     

     

    [Signature
pages to follow]

     

    
      
         


      

      
        22

        
          

        

      

      
         


      

    

     

    IN WITNESS WHEREOF, the
undersigned have executed or caused to be executed this Agreement as of the date
first above written by their respective officers thereunto duly
authorized.

     

     

    
      
        	 	CAPITAL TRUST,
      INC.	 
	 	 	 	 
	
                 

              	
                By: 

              	/s/ John R. Klopp	 
	 	 	Name:  John
      R. Klopp	 
	 	 	Title:    Chief
      Executive Officer	 


      

    

     

     

    
      
        	 	
                W.
      R. BERKLEY CORPORATION

              	 
	 	 	 	 
	
                 

              	
                By: 

              	/s/ William R. Berkley	 
	 	 	Name:
       William R. Berkley	 
	 	 	Title:    Chief
      Executive Officer	 


      

    

     

     

    
      SIGNATURE
PAGE TO STOCK PURCHASE AGREEMENT

       

    

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

     

    
      
        	Solely for purposes of Section 2.4 of
      this Agreement the following: 
	 	 
	 	 
	/s/ John R. Klopp	 
	John
      R. Klopp	 
	 	 
	JRK
      Investment Partnership LP 	 


      

    

    

       

      
        
          	
                  By: 

                	/s/ John R. Klopp	 
	 	Name: 	 
	 	Title: 	 
	 	 	 


        

      

       

      
        
          
            	/s/ Craig M. Hatkoff	 
	Craig
      M. Hatkoff	 
	 	 
	CMH
      Investment Partnership LP	 


          

        

         

        
          
            	 	 	 
	
                    By: 

                  	/s/ Craig M. Hatkoff	 
	 	Name: 	 
	 	Title: 	 
	 	 	 


          

        

        
           

          
            
              	Veqtor Finance Company,
    L.L.C. 	 
	 	 
	 	 	 
	
                      By: 

                    	/s/ Donald Liebentritt	 
	 	Name: 	 
	 	Title: 	 
	 	 	 


            

          

          
             

            
              
                	Samstock, L.L.C. 	 
	 	 
	 	 	 
	
                        By: 

                      	/s/ Donald Liebentritt	 
	 	Name: 	 
	 	Title: 	 
	 	 	 


              

            

             

            
              
                 


              

              
                2

                
                  

                

              

              
                 


              

            

          

        

      

    

     

    Annex 1

     

    CERTAIN
DEFINITIONS

     

    “Affiliates” means,
with respect to any Person, any Person directly or indirectly controlling,
controlled by or under common control with such Person.  The term
“control”
includes, without limitation, the possession, directly or indirectly, of the
power to direct the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

     

    “Assets” means, with
respect to any Person, all of the assets, rights, interests and other
properties, real, personal and mixed, tangible and intangible, owned by such
Person.

     

    “Business Day” means
any day that is not a Saturday, Sunday, legal holiday or other day on which
banks are required to be closed in New York, New York.

     

    “Commission” means the
Securities and Exchange Commission.

     

    “Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

     

    “Fundamental
Documents” means, with respect to a corporation, the charter and bylaws
(each as amended) or, with respect to any other Person, the documents by which
such Person (other than an individual) establishes its legal existence or which
govern its internal affairs.

     

    “GAAP” means, at any
time, generally accepted accounting principles in the jurisdiction in which the
Person to which such principles are applied is organized at such
time.

     

    “Governmental Entity”
means any court, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign, federal, state or
local.

     

    “Law” means any
constitution, law, statute, treaty, rule, directive, requirement or regulation
or Order, domestic or foreign, of any Governmental Entity, including, without
limitation, the rules and regulations of any stock exchange and/or quotation
system on which the subject Person’s securities are listed for trading or
quoted, as the case may be.

     

    “Liability” means any
liability or obligation, whether known or unknown, asserted or unasserted,
absolute or contingent, accrued or unaccrued, liquidated or unliquidated and
whether due or to become due, regardless of when asserted.

     

    “Lien” means any
security interest, pledge, bailment (in the nature of a pledge or for purposes
of security), mortgage, deed of trust, the grant of a power to confess judgment,
conditional sale, trust receipt or other title retention agreement (including
any lease in the nature thereof), charge, encumbrance, easement, reservation,
restriction, cloud, right of first refusal or first offer, option, equity or
adverse claim or other similar arrangement or interest in real or personal
property.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    “Material Adverse
Effect” means, with respect to any Person, a material adverse effect on
the business, operations, Assets, condition (financial or otherwise), operating
results, or prospects of such Person and its Subsidiaries, if any, taken as a
whole; provided, however, with respect
to the Company, that any decrease in the trading price or volume of the
Company’s Common Stock that occurs in the absence of a material adverse effect
on any of the foregoing shall not, in itself, be deemed to be a “Material
Adverse Effect.”

     

    “Order” means any
order, writ, judgment, injunction, decree, determination or award issued by a
Governmental Entity.

     

    “Permits” means all
permits, licenses, authorizations, registrations, franchises, approvals,
consents, certificates, variances and similar rights obtained, or required to be
obtained, from Governmental Entities.

     

    “Person” means any
individual, corporation, partnership, limited liability company, trust, estate,
or unincorporated organization, or other entity or Governmental Entity or other
juridical entity.

     

    “Proceeding” means any
action, suit, proceeding, complaint, charge, hearing, inquiry or investigation
before or by a Governmental Entity or an arbitrator, mediator or
tribunal.

     

    “Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

     

    “Subsidiary” means (i)
any entity in which the Company owns directly or indirectly, more than 50% of
the voting capital stock or equity interest and (ii) any commercial real estate
mezzanine investment fund managed by the Company or any subsidiary (whether or
not the Company or any subsidiary owns a majority interest).

     

    “Tax” or “Taxes” as used in
this Agreement, means, with respect to any Person, (a) all taxes, customs duties
and other Taxes, fees, assessments or charges of any kind whatsoever including
without limitation all income, gross receipts, sales, use, ad valorem, transfer,
franchise, license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property or windfall profits Taxes, alternative or add-on
minimum Taxes, together with all interest and penalties, additions to Tax and
other additional amounts imposed by any taxing authority (domestic or foreign)
on such Person (if any) and (b) any Liability for the payment of any amount of
the type described in clause (a) above as a result of being a “transferee” (within
the meaning of Section 6901 of the Internal Revenue Code of 1986, as amended, or
any other applicable Law) of another entity or a member of an affiliated or
combined group, and (c) any liability under any tax sharing or other contractual
arrangement.

     

    
      
         


      

      
        I-2

        
          

        

      

      
         


      

    

     

    EXHIBIT
A

     

    CAPITAL
TRUST, INC.

     

    Warrant
for Class A Common Stock

     

           FOR
VALUE RECEIVED, Capital Trust, Inc., a Maryland corporation (the"Company"),
hereby grants, pursuant hereto (this "Warrant"), to ________ (the "Initial
Holder") or its permitted assigns, the right, subject to the terms and
conditions contained herein, to purchase from the Company, at any time or from
time to time commencing at the Commencement Time (as defined below) and prior to
5:00 p.m., Eastern Time, on December 31, 2004, up to ______________ (____)
(subject to adjustment as provided herein) fully paid and non-assessable shares
of class A common stock, par value $.01 per share, of the Company for
twenty-three dollars and forty cents ($23.40) per share (subject to adjustment
as provided herein) for an aggregate purchase price (assuming full exercise) of
______________ ($_________). The Aggregate Exercise Price is not subject to
adjustment.

     

           Hereinafter,
(i) said class A common stock, par value $.01 per share, of the Company, is
referred to as the "Common Stock," (ii) the shares of the Common Stock
purchasable hereunder or under any other Warrant (as hereinafter defined) are
referred to as the "Warrant Shares," (iii) the aggregate purchase price payable
for the Warrant Shares purchasable hereunder is referred to as the "Aggregate
Exercise Price," (iv) the price payable for each of the Warrant Shares is
referred to as the "Per-Share Exercise Price," (v) this Warrant, and all
warrants hereafter issued in exchange for, in substitution for or upon transfer
of this Warrant are referred to as the "Warrants" and (vi) the holders of this
Warrant or any portion hereof in accordance with the terms hereof from time to
time are each referred to as a "Holder" and are collectively referred to as the
"Holders.") Definitions of other capitalized terms used herein are set forth in
Section 15 hereof.

     

    1.
Exercise of Warrant.

     

    (a) This Warrant may be exercised in
whole at any time, or in part from time to time, commencing at the Commencement
Time and prior to 5:00 p.m., Eastern Time, on December 31, 2004 (the "Exercise
Period") by the Holder by the surrender of this Warrant (with the subscription
form at the end hereof duly executed) to the Company at the address set forth in
Section 11 hereof, together with proper payment of the Aggregate Exercise Price,
or the proportionate part thereof if this Warrant is exercised in part, with
payment for the Warrant Shares made by wire transfer of immediately available
funds or certified or official bank check payable to the order of the Company.
If this Warrant is exercised in part, it must be exercised for a number of whole
shares of Common Stock.

     

    (b) The "Commencement Time" shall begin
when the issuance of the Warrant Shares shall have been approved by an
affirmative vote of a majority of the votes cast at the Company's 2004 annual
meeting of shareholders or at any adjournment or postponement thereof in
accordance with Sections 310.00 and 312.03(c) of the New York Stock Exchange,
Inc. Listed Company Manual.

     

    
      
         


      

      
        A-1

        
          

        

      

      
         


      

    

     

    (c) After any partial exercise or
exchange, the Holder will be entitled to receive a new Warrant covering the
Warrant Shares as to which this Warrant has not been exercised or exchanged and
setting forth the proportionate part of the Aggregate Exercise Price applicable
to such Warrant Shares.

     

    (d) As
soon as practicable, but within ten (10) days following the surrender of this
Warrant and the receipt of payment of the Aggregate Exercise Price, or the
proportionate part thereof, as the case may be, pursuant to subsection (a) of
this Section 1, the Company, within seven (7) days,

     

                          (i)
will issue a certificate or certificates in the name of the Holder or such other
Person designated in writing by the Holder for the largest number of whole
shares of Common Stock to which the Holder shall be entitled by the exercise
(full or partial, in accordance with the subscription form) or exchange of this
Warrant;

     

                          (ii)
will, if this Warrant is exercised in whole, in lieu of any fractional share of
Common Stock to which the Holder shall be otherwise entitled, pay to the Holder
cash in an amount equal to the fair value of such fractional share (determined
in such reasonable manner as the Board of Directors shall determine),
and

     

                          (iii)
will deliver the other securities and properties receivable upon the exercise or
exchange of this Warrant, or the proportionate part thereof if this Warrant is
exercised or exchanged in part, pursuant to the provisions of this
Warrant.

     

    2.
Reservation of Warrant Shares; Listing. The Company shall at all times reserve
and keep available, free from preemptive rights, out of its authorized but
unissued shares of Common Stock, for the purpose of effecting the exercise of
Warrants, the full number of shares of Common Stock then issuable upon the
exercise of all outstanding Warrants. Throughout the period of time during which
this Warrant may be exercised, the Company shall use its commercially reasonable
efforts to keep the Warrant Shares authorized for listing on the New York Stock
Exchange or on any other successor national securities exchange or other
relevant market on which the Common Stock is listed, admitted to trading or
traded.

     

    3.
Protection Against Dilution. The Per-Share Exercise Price and the number of
Warrant Shares purchasable upon the exercise of the Warrants shall be subject to
adjustment from time to time as set forth in this Section 3. Whenever the
Per-Share Exercise Price is adjusted by operation of this Section 3, the number
of Warrant Shares to be delivered upon exercise of the Warrants shall be
adjusted as provided in subsection (n) of this Section 3.

     

    
      
         


      

      
        A-2

        
          

        

      

      
         


      

    

     

    (a) In case the Company shall, while
any of the Warrants are outstanding, (i) pay a dividend or make any other
distribution with respect to shares of Common Stock in shares of Common Stock,
(ii) subdivide outstanding shares of Common Stock, (iii) combine outstanding
shares of Common Stock into a smaller number of shares or (iv) issue by
reclassification of its Common Stock any shares of stock of the Company (other
than the reclassifications covered by subsection (d) of this Section 3), the
Per-Share Exercise Price shall be adjusted to be equal to a fraction, the
numerator of which shall be the Aggregate Exercise Price and the denominator of
which shall be the number of shares of Common Stock or other stock of the
Company that the Holder would have owned immediately following such action had
such Warrant been exercised immediately prior thereto or, in the case of a
dividend, distribution, subdivision, combination or reclassification with
respect to which a record date has been established, prior to such record date.
An adjustment made pursuant to this subsection (a) shall be made immediately
prior to the opening of business on the day following (x) the date of the
payment of the dividend or distribution (retroactive to the record date) or (y)
the effective date in the case of a subdivision, combination or reclassification
(retroactive to the record date, if any). If the Board of Directors shall
declare any dividend or distribution or resolve to take any action referred to
in this subsection (a), it shall provide written notice thereof to the Holder
not less than ten (10) days prior to the record date fixed for determining the
stockholders entitled to participate therein.

     

    (b) In case the Company shall, while
any of the Warrants are outstanding, issue rights or warrants to purchase, or
securities convertible into or exchangeable for, Common Stock ("Rights") to any
holders of its outstanding shares of Common Stock entitling them (for a period
expiring within 45 days after the record date mentioned below) to subscribe for,
purchase, convert or exchange shares of Common Stock at a price per share less
than the current market price per share of Common Stock (as determined pursuant
to subsection (e) of this Section 3) on the record date mentioned below,
provided the purchase price is less than the Per-Share Exercise Price
theretofore in effect, the Per-Share Exercise Price shall be adjusted so that
the same shall equal the amount determined by multiplying the Per-Share Exercise
Price theretofore in effect by a fraction the numerator of which shall be the
number of shares of Common Stock outstanding on the date of issuance of such
Rights plus the number of shares which the aggregate offering price would
purchase at such current market price, and the denominator of which shall be the
number of shares of Common Stock outstanding on the date of issuance of such
Rights plus the number of additional shares of Common Stock offered for
subscription or purchase. "Aggregate offering price," as used in the preceding
sentence, shall mean the amount received or receivable by the Company in
consideration of the issuance or sale of Rights plus any additional
consideration payable to the Company upon exercise thereof, in each case with
reference to the total number of shares of Common Stock offered for subscription
or purchase. Such adjustment shall be made immediately prior to the opening of
business on the day following the date of issuance of Rights, retroactive to the
record date for the determination of stockholders entitled to receive
Rights.

     

    
      
         


      

      
        A-3

        
          

        

      

      
         


      

    

     

     (c) In case the Company shall, by
dividend or otherwise, distribute to any holders of its outstanding shares of
Common Stock, evidences of its indebtedness, shares of any class or series of
its stock, assets, securities convertible into or exchangeable for any of its
stock or rights or warrants to subscribe for or purchase any of its securities
(excluding any Rights referred to in subsection (b) of this Section 3, any
dividend or other distribution paid exclusively in cash and any dividend or
other distribution referred to in subsection (a) of this Section 3), the
Per-Share Exercise Price shall be reduced so that the same shall equal the price
determined by multiplying the Per-Share Exercise Price theretofore in effect by
a fraction the numerator of which shall be the current market price (determined
as provided in subsection (e) of this Section 3) per share of Common Stock on
the record date referred to below less the fair market value (as determined in
good faith by the Board of Directors, whose determination shall be conclusive),
on the record date referred to below, of the portion of the evidences of
indebtedness, shares of stock, assets, convertible or exchangeable securities,
rights or warrants (including fractions)so distributed with respect to each
share of Common Stock and the denominator of which shall be such current market
price per share of Common Stock. Such adjustment shall be made immediately prior
to the opening of business on the day following the date on which any such
distribution is made, retroactive to the record date for the determination of
stockholders entitled to receive such distribution. In the event that no such
dividend or other distribution is so paid or made, the Per-Share Exercise Price
shall again be adjusted to be the Per-Share Exercise Price which would then be
in effect if such dividend or other distribution had not occurred. If the Board
of Directors determines the fair market value of any distribution for purposes
of this subsection (c) by reference to the actual or when-issued trading market
for any securities comprising such distribution, it must in doing so consider
the prices in such market over the same period used in computing the current
market price per share of Common Stock (determined as provided in subsection (e)
of this Section 3).

     

     (d) In the case of any capital
reorganization of the Company or reclassification of the Common Stock, or any
consolidation or merger to which the Company is a party other than a merger or
consolidation in which the Company is the continuing corporation, or in the case
of any sale or conveyance to another entity of the property of the Company as an
entirety or substantially as an entirety, or in the case of any statutory
exchange of securities with another corporation (including any exchange effected
in connection with a merger of a third corporation into the Company), the Holder
shall have the right thereafter to receive on the exercise of this Warrant the
kind and amount of securities, cash or other property which the Holder would
have owned or have been entitled to receive immediately after such
reorganization, reclassification, consolidation, merger, statutory exchange,
sale or conveyance had this Warrant been exercised immediately prior to the
effective date of such reorganization, reclassification consolidation, merger,
statutory exchange, sale or conveyance and in any such case, if necessary,
appropriate adjustment shall be made in the application of the provisions set
forth in this Section 3 with respect to the rights and interests thereafter of
the Holder to the end that the provisions set forth in this Section 3 shall
thereafter correspondingly be made applicable, as nearly as may reasonably be,
in relation to any shares of stock or other securities or property thereafter
deliverable on the exercise of the Warrant. Notice of any such reorganization,
reclassification, consolidation, merger, exchange, sale or conveyance shall be
mailed to the Holder not less than ten (10) days prior to such event. The above
provisions of this subsection (d) shall similarly apply to successive
reorganizations, reclassifications, consolidations, mergers, statutory
exchanges, sales or conveyances. The Company shall require the issuer of any
shares of stock or other securities or property thereafter deliverable on the
exercise of the Warrant to be responsible for all of the agreements and
obligations of the Company hereunder.

     

    
      
         


      

      
        A-4

        
          

        

      

      
         


      

    

     

     (e) For the purpose of any
computation under subsection (b) or (c) of this Section 3, the current market
price per share of Common Stock on any date in question shall be deemed to be
the average of the daily Closing Prices for the five (5) Trading Day period
ending on the earlier of the day in question and, if applicable, the last
Trading Day before the "ex" date with respect to the issuance or distribution
requiring such computation; provided, however, that if more than one event
occurs that would require an adjustment pursuant to subsections (a) through (d)
of this Section 3, inclusive, the Board of Directors shall in good faith make
such adjustments to the Closing Prices during such five(5) Trading Day period as
it reasonably deems appropriate to effectuate the intent of the adjustment
provisions in this Section 3, in which case any such determination by the Board
of Directors shall be conclusive. For purposes of this paragraph, the term "ex"
date means the first date on which the shares of Common Stock trade regular way,
without the right to receive such issuance or distribution, on the New York
Stock Exchange or on such successor securities exchange as the shares of Common
Stock may be listed on or in the relevant market from which the Closing Prices
were obtained.

     

     (f) No adjustment in the
Per-Share Exercise Price shall be required unless such adjustment would require
an increase or decrease of at least 1% in the Per-Share Exercise Price;
provided, however, that any adjustments which by reason of this subsection (f)
are not required to be made shall be carried forward and taken into account in
determining whether any subsequent adjustment shall be required.

     

    (g) If any action would require
adjustment of the Per-Share Exercise Price pursuant to more than one of the
provisions described above, only one adjustment shall be made and such
adjustment shall be the amount of adjustment that has the highest absolute value
to the Holder.

     

    (h) Except as stated above, the
Per-Share Exercise Price will not be adjusted for the issuance of shares of
Common Stock or any securities convertible into, or exchangeable for, shares of
Common Stock, or carrying the right to purchase any of the
foregoing.

     

    (i) In case the Company shall, by
dividend or otherwise, declare or make a distribution on the shares of Common
Stock referred to in subsection (c) of this Section 3, the Holder, upon the
exercise thereof subsequent to the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution and prior to
the effectiveness of the Per-Share Exercise Price adjustment in respect of such
distribution, shall be entitled to receive, for each share of Common Stock for
which the Warrant is exercised, the portion of the evidences of indebtedness,
shares of stock, assets, securities convertible into or exchangeable for any of
its stock, or rights or warrants to subscribe for or purchase any of its
securities (including fractions) so distributed with respect to each share of
Common Stock; provided, however, that, at the election of the Company with
respect to all Holders so exercising, the Company may, in lieu of distributing
to such Holder any portion of such distribution not consisting of cash or
securities of the Company, pay such Holder an amount in cash equal to the fair
market value thereof (as determined in good faith by the Board of Directors,
whose determination shall be conclusive). If any exercise of a Warrant described
in the immediately preceding sentence occurs prior to the payment date for a
distribution to holders of shares of Common Stock which the Holder of a Warrant
so exercised is entitled to receive in accordance with the immediately preceding
sentence, the Company may elect to distribute to such Holder a due bill for the
evidences of indebtedness, shares of stock, assets, securities convertible into
or exchangeable for any of its stock, or rights or warrants to subscribe for or
purchase any of its securities to which such Holder is so entitled, provided,
that such due bill (a) meets any applicable requirements of the principal
national securities exchange or other market on which the shares of Common Stock
are then traded and (b) requires payment or delivery of such evidences of
indebtedness, shares of stock, assets, securities convertible into or
exchangeable for any of its stock, or rights or warrants to subscribe for or
purchase any of its securities no later than the date of payment or delivery
thereof to holders of Common Stock receiving such distribution.

     

    
      
         


      

      
        A-5

        
          

        

      

      
         


      

    

     

     (j) Whenever the Per-Share
Exercise Price is adjusted as provided in this Section 3 and upon any
modification of the rights of the Holder in accordance with this Section 3, the
Company shall promptly prepare a certificate signed by the chief executive
officer or the chief financial officer setting forth the adjusted Per-Share
Exercise Price and showing in reasonable detail the facts requiring such
adjustment or modification and the manner of computing the same ("Adjustment
Certificate") and cause copies of such certificate to be mailed to the
Holder.

     

    (k) If the Board of Directors shall
authorize and the Company shall declare any dividend or other distribution with
respect to the Common Stock other than a distribution exclusively in cash, the
Company shall mail notice thereof to the Holder not less than ten (10) days
prior to the record date fixed for determining stockholders entitled to
participate in such dividend or other distribution.

     

    (l) If, as a result of an adjustment
made pursuant to this Section 3, the Holder of any Warrant thereafter
surrendered for exercise shall become entitled to receive shares of two or more
classes of stock or other securities, the Board of Directors shall in good faith
determine the allocation of the adjusted Per-Share Exercise Price between or
among such classes of stock or other securities (whose determination shall be
conclusive).

     

     (m) Upon the expiration of any
rights, options, warrants or conversion privileges with respect to the issuance
of which an adjustment to the Per-Share Exercise Price had been made, if such
shall not have been exercised, the Per-Share Exercise Price, to the extent this
Warrant has not then been exercised, shall, upon such expiration, be readjusted
and shall thereafter be such as they would have been had they been originally
adjusted (or had the original adjustment not been required, as the case may be)
on the basis of (A) the Common Stock, if any, actually issued or sold upon the
exercise of such rights, options, warrants or conversion privileges, and (B)
such shares of Common Stock, if any, that were issued or sold for the
consideration actually received by the Company upon such exercise plus the
consideration, if any, actually received by the Company for the issuance, sale
or grant of all such rights, options, warrants or conversion privileges whether
or not exercised; provided, however, that no such readjustment shall have the
effect of increasing the Per-Share Exercise Price by an amount in excess of the
amount of the adjustment initially made in respect of the issuance, sale or
grant of such rights, options, warrants or conversion privileges.

     

     (n) Whenever the Per-Share
Exercise Price is adjusted as provided pursuant to this Section 3, the number of
Warrant Shares purchasable upon the exercise of this Warrant shall be adjusted
by multiplying such number of Warrant Shares immediately prior to such
adjustment by a fraction, the numerator of which shall be the Per-Share Exercise
Price immediately prior to such adjustment, and the denominator of which shall
be the Per-Share Exercise Price immediately thereafter.

     

    
      
         


      

      
        A-6

        
          

        

      

      
         


      

    

     

    (o) In case any event shall occur as to
which the other provisions of this Section 3 are not strictly applicable but as
to which the failure to make any adjustment would not fairly protect the
purchase rights represented by this Warrant in accordance with the essential
intent and principles hereof then, in each such case, the Board of Directors
shall in good faith determine the adjustment, if any, on a basis consistent with
the essential intent and principles established herein, necessary to preserve
the purchase rights represented by the Warrants (whose determination shall be
conclusive) and shall promptly make the adjustments described
therein.

     

     (p) If the Company shall take a
record of the holders of its Common Stock for any purpose requiring an
adjustment hereunder, but shall, thereafter and before the consummation of the
event requiring such adjustment legally abandon its plan, then thereafter no
adjustment shall be required by reason of the taking of such record and any such
adjustment previously made in respect thereof shall be rescinded and
annulled.

     

     (q) Notwithstanding anything
herein to the contrary, no adjustment to the Per-Share Exercise Price hereunder
shall be made, to the extent it would cause the Per-Share Exercise Price to be
less than the par value of the Common Stock.

     

    4. Fully
Paid Stock; Taxes. The shares of the Common Stock represented by each and every
certificate for Warrant Shares delivered upon the exercise of this Warrant shall
at the time of such delivery, be duly authorized, validly issued and
outstanding, fully paid and nonassessable, and not subject to preemptive rights
or rights of first refusal. The Company shall pay all documentary, stamp or
similar taxes and other similar governmental charges that may be imposed with
respect to the issuance or delivery of any shares of Common Stock upon exercise
of the Warrants (other than income taxes); provided, however, that if the shares
of Common Stock are to be delivered in a name other than the name of the Holder,
no such delivery shall be made unless the Person requesting the same has paid to
the Company the amount of transfer taxes or charges incident thereto, if
any.

     

    5. HSR.
To the extent required by the Hart-Scott-Rodino Antitrust Improvements Act of
1976 (the "HSR Act") following any exercise or exchange of this Warrant pursuant
to Section 1 by the Holder and prior to the issuance and delivery of the
certificates for the shares of Common Stock required thereby, the Company and
the Holder shall cooperate in the preparation of, and file with the United
States Federal Trade Commission and the United States Department of Justice, the
notification and report form required for such and any supplemental or
additional information which may be reasonably requested in connection therewith
pursuant to the HSR Act and shall comply in all material respects with the
requirements of the HSR Act. The fees to be paid in connection with any such
filing under the HSR Act shall be paid by the Holder.

     

    
      
         


      

      
        A-7

        
          

        

      

      
         


      

    

     

    6.
Transfer; Etc.

     

    (a) This Warrant may not be transferred
without the consent of the Company; provided, however, that that the Initial
Holder may assign all or any portion of this Warrant to one or more designated
controlled Affiliates of W. R. Berkley Corporation, a Delaware corporation, by
execution of the form of assignment attached hereto or a substantially
equivalent assignment form. Until this Warrant is transferred on the books of
the Company, the Company may treat the registered Holder of this Warrant as he
or it appears on the Company's books at any time as the Holder for all purposes.
The Company shall permit any Holder of a Warrant or his duly authorized
attorney, upon written request during ordinary business hours, to inspect and
copy or make extracts from its books showing the registered holders of
Warrants.

     

    (b) This Warrant may not be sold,
transferred, assigned or hypothecated by the Holder except in compliance with
the provisions of the Securities Act of 1933 and the applicable state securities
"blue sky" laws, and is so transferable only upon the books of the Company which
it shall cause to be maintained for such purpose.

     

    (c) All
Warrants issued upon the transfer or assignment of this Warrant or part thereof
or upon a partial exercise, exchange or purchase of this Warrant will be dated
the same date as this Warrant, and all rights of the holder thereof shall be
identical to those of the Holder.

     

    (d) The
Company shall not be required to pay any tax or taxes which may be payable in
respect of any transfer involved in the issue of any certificates for Warrants
in a name other than that of the registered Holder of a Warrant surrendered upon
the exercise or transfer of a Warrant and the Company shall not be required to
issue or deliver such certificates for Warrants unless and until the Person or
Persons requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid or are not due and owing.

     

    (e) In
connection with any transfer, the Holder will deliver to the Company such
certificates and other information as the Company may reasonably require to
confirm that the transfer complies with the foregoing restrictions.

     

    7. Loss
etc., of Warrant. Upon receipt of evidence satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant, and of indemnity
reasonably satisfactory to the Company, if lost, stolen or destroyed, and upon
surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver to the Holder a new Warrant of like date, tenor and
denomination.

     

    8.
Warrant Holder Not Stockholder. This Warrant does not confer upon the Holder any
right to vote on, consent to or otherwise participate with respect to matters to
a vote of the stockholders of the Company or to receive notice as a stockholder
of the Company, as such, in respect of any matters whatsoever, nor any other
rights or liabilities as a stockholder, prior to the exercise hereof; this
Warrant does, however, require certain notices to the Holder as set forth
herein.

     

    
      
         


      

      
        A-8

        
          

        

      

      
         


      

    

     

    9.
Communication. Any notice or other communication to be given hereunder shall be
given by hand delivery, by overnight carrier, in each case at the addresses set
forth in this section, and shall be deemed to have been given when received. The
Company or the Holder may change its address for receiving notices by giving
written notice of such change to the other.

     

    If to the
Company, to:

     

    Capital
Trust, Inc.

    410 Park
Avenue

    14th
Floor

    New York,
New York  10022

    Attn:
John R. Klopp, Chief Executive Officer

    


     

    If to the
Holder, to:

     

     

    ------------------

     

    


     

    10.
Headings. The headings of this Warrant have been inserted as a matter of
convenience and shall not affect the construction hereof.

     

    11.
Applicable Law. This Warrant shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to the principles
of conflicts of law thereof.

     

    12.
Amendment, Waiver, etc. Except as expressly provided herein, neither this
Warrant nor any term hereof may be amended, waived, discharged or terminated
other than by a written instrument signed by the party against whom enforcement
of any such amendment, waiver, discharge or termination is sought; provided,
however, that any provisions hereof may be amended, waived, discharged or
terminated upon the written consent of the Company and the majority in interest
of the Holders.

     

    13.
Certain Definitions.

     

             "Affiliate"
means, with respect to any Person, any other Person that directly or indirectly
controls or is controlled by or is under common control with such Person. For
the purposes of this definition, "control", when used with respect to any
Person, means possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of the such Person, whether through
the ownership of voting securities, by contract or otherwise; and the terms of
"affiliated", "controlling" and "controlled" have meanings correlative to the
foregoing.

     

    
      
         


      

      
        A-9

        
          

        

      

      
         


      

    

     

           "Board
of Directors" means the board of directors of the Company.

     

           "Closing
Price", with respect to any security on any day, means the last reported sale
price, regular way on such day, or, if no sale takes place on such day, the
average of the reported closing bid and asked prices on such day, regular way,
in either case as reported on the NYSE Composite Tape, or, if such security is
not listed or admitted to trading on the New York Stock Exchange, on the
principal national securities exchange on which such security is listed or
admitted to trading, or, if such security is not listed or admitted to trading
on a national securities exchange, on the NASDAQ Stock.

     

    
      
         


      

      
        A-10

        
          

        

      

      
         


      

    

     

    IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed this 11th
day of May, 2004.

     

     

    CAPITAL
TRUST, INC.

     

     

    
      	 	By: 
	 	 
	 	 
	 	 
	 	John R.
      Klopp 
	 	 
	 	Chief Executive
      Officer 


    

                                                        

    
      
         


      

      
        A-11

        
          

        

      

      
         


      

    

     

    SUBSCRIPTION

     

               The
undersigned, ___________________, pursuant to the provisions of the
foregoing Warrant, hereby agrees to subscribe for and purchase __________
shares of
the Common Stock, par value $.01 per share, of Capital Trust, Inc. covered
by said Warrant, and makes payment therefor in full at the price per
share
provided by said Warrant.

     

    
      	Dated:  	 	 	Signature:  	 
	 	 	 	 	 
	 	 	 	Address: 	 
	 	 	 	 	 


    

     

    ASSIGNMENT

     

               FOR
VALUE RECEIVED _______________ hereby sells, assigns and transfers
unto ____________________ the foregoing Warrant and all rights evidenced
thereby, and does irrevocably constitute and appoint _____________________,
attorney, to transfer said Warrant on the books of Capital
Trust, Inc.

     

    
      
        	Dated:  	 	 	Signature:  	 
	 	 	 	 	 
	 	 	 	Address: 	 
	 	 	 	 	 


      

       

    

    PARTIAL
ASSIGNMENT

    


               FOR
VALUE RECEIVED _______________ hereby assigns and transfers unto ____________________
the right to purchase _______ shares of Common Stock, par value
$.01 per share, of Capital Trust, Inc. covered by the foregoing Warrant,
and a
proportionate part of said Warrant and the rights evidenced thereby, and
does
irrevocably constitute and appoint ____________________, attorney, to
transfer
such part of said Warrant on the books of Capital Trust, Inc.

     

    
      
        	Dated:  	 	 	Signature:  	 
	 	 	 	 	 
	 	 	 	Address: 	 
	 	 	 	 	 


      

       

    

    
      
         


      

      
        A-12

        
          

        

      

      
         


      

    

     

    EXHIBIT
B

     

    May 11,
2004

     

     

    Capital
Trust, Inc.

    410 Park
Avenue, 14th Floor

    New York,
New York 10022

     

    Ladies
and Gentlemen:

     

               We
have acted as counsel to Capital Trust, Inc., a Maryland corporation (the
"Company"), in connection with the execution, delivery and performance by the
Company of the Securities Purchase Agreement, dated as of May 11, 2004 (the
"Purchase Agreement"), among the Company, certain of its stockholders named
therein and W. R. Berkley Corporation, a Delaware corporation, and/or one or
more of its designated controlled Affiliates (collectively, the "Purchaser"),
pursuant to which the Company agreed to issue and sell to the Purchaser (i)
1,310,000 shares (the "Tranche 1 Shares") of its Class A Common Stock, par value
$.01 per share (the "Common Stock"), (ii) warrants (the "Warrants") initially
exercisable, subject to shareholder approval, of 365,000 shares (the "Warrant
Shares") of Common Stock and, (iii) subject to shareholder approval, 325,000
shares (the "Tranche 2 Shares" and, together with the Tranche 1 Shares and the
Warrant Shares, the "Shares") of Common Stock. "). The offering of the Shares
and the Warrants is being made pursuant to a Registration Statement on Form S-3
(Registration No. 333-111261) filed by the Company with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act") (such Registration Statement at the time it was
declared effective by the Commission being hereinafter referred to as the
"Registration Statement"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to them in the Purchase
Agreement.

    


               As
such counsel and for purposes of our opinion set forth below, we have examined
originals or copies, certified or otherwise identified to our satisfaction, of
such documents, corporate records, certificates of public officials and other
instruments as we have deemed necessary or appropriate as a basis for the
opinion set forth herein, including, without limitation:

    


    
      	 	
              (i) 

            	
              the
      Purchase Agreement;

            


    

    


    
      	 	
              (ii)

            	
              the
      Warrants;

            


    

    


    
      	 	
              (iii)

            	
              the
      Registration Statement;

            


    

     

    
      
         


      

      
        B-1

        
          

        

      

      
         


      

    

     

    
      	 	
              (iv)

            	
              the
      form of final  prospectus,  dated May 11, 2004,  relating
      to the Shares and the Warrant, as filed with the Commission on May 11,
      2004 pursuant to Rule 424(b) under the  Securities  Act (the
      "Prospectus");

            


    

     

    
      	 	
              (v)

            	
              the
      Current Report on Form 8-K filed by the Company with the Commission (File
      no. 001-14788) under the Securities Exchange Act of 1934, as amended;
      and

            


    

     

    
      	 	
              (vi)

            	
              resolutions
      adopted by the Company's board of directors on May 6, 2004 certified by
      the Secretary of the Company relating to the execution and delivery of,
      and the defined below.

            


    

     

               In
addition to the foregoing, we have made such investigations of law, as we have
deemed necessary or appropriate as a basis for the opinion set forth
herein.

     

               The
Purchase Agreement and the Warrants are referred to herein, individually, as a
"Transaction Document" and, collectively, as the "Transaction
Documents."

     

               In
such examination and in rendering the opinion expressed below, we
have  assumed:  (i)  the  due  authorization,  execution  and  delivery  of
each Transaction Document  and each
other  document  referred to above by all of the parties
thereto (including the due authorization,  execution and delivery of
the Transaction Documents by the Company); (ii) the genuineness of all
signatures on all documents  submitted to us; (iii)
the  authenticity  and completeness of all
documents,  corporate records,  certificates and other
instruments  submitted to us; (iv) that
photocopy,  electronic,  certified, conformed, facsimile and
other copies submitted to us of
original  documents,  corporate
records,  certificates and other instruments conform to the original
documents,  records,  certificates and other instruments,
and that all such original documents,  corporate records, certificates
and instruments were authentic and complete; (v) the legal capacity of all
individuals executing documents;  (vi) that the Transaction Documents
are the valid and binding obligations of each of the parties thereto (in the
case of the Warrants, other than the Company),  enforceable against
such parties (in the case  of
the  Warrants,  other  than  the  Company)  in  accordance  with  their
respective  terms and that no
such  documents  have been  amended
or  terminated orally  or
in  writing  except  as
has  been  disclosed  to
us;  (vii)  that the Purchaser has satisfied all regulatory
and legal requirements  applicable to its activities; and (viii) that
the rights and remedies set forth in the Transaction Documents  will
be  exercised  reasonably  and in
good  faith  and were  granted without fraud or
duress and for good,  valuable and
adequate  consideration  and without  intent
to  hinder,  delay or
defeat  any  rights  of
any  creditors  or stockholders of the Company. As to all
questions of fact material to the opinion expressed herein and as to the
materiality of any fact or other matter referred to herein, we have relied
(without independent investigation) upon certificates or comparable documents of
officers and representatives of the Company and upon the representations,
warranties and covenants of the Company contained in the Transaction Documents,
including the Purchase Agreement.  We have also assumed that the
representations and warranties of the Purchaser appearing in Article VI of the
Purchase Agreement are true and correct.

     

    
      
         


      

      
        B-2

        
          

        

      

      
         


      

    

     

               Based
upon the foregoing, and in reliance thereon, and subject to the
limitations,  qualifications and  exceptions set forth
herein, we are of the opinion that, when issued pursuant to the terms of the
Purchase Agreement, the Warrants will constitute the valid and
binding  obligation of the Company, enforceable against the Company in
accordance with their respective terms.

     

               The
opinion expressed herein is subject to the following exceptions, qualifications
and limitations:

     

                          A.  We
express  no  opinion   with   respect  to  (i)  the  truth  of  the
representations  and warranties  contained in the
Transaction  Documents or (ii) any other
document,  instrument or agreement other than the
Warrants  (including
the  exhibits  or  schedules  to  the  Registration  Statement  or  Prospectus),
regardless of whether such  document,  instrument or
agreement is referred to in the Registration Statement or
Prospectus.

     

                           B.
We express no opinion with respect to the effect that the introduction of
extrinsic evidence as to the meaning of any Transaction Document may have on the
enforceability thereof.

     

                          C.
With respect to our opinion set forth above, we have assumed that there will be
sufficient  authorized and unissued shares of Common Stock available
for issuance each time a Warrant is exercised.

     

                          D.  Our
opinion  set  forth  above
is  subject  to (i) the  effect  of any
applicable
bankruptcy,  insolvency,  reorganization,  moratorium
or similar laws
and  principles  affecting   creditors'  rights  generally,   including  without
limitation fraudulent transfer or fraudulent conveyance laws; (ii) the effect of
public policy considerations or court decisions which may limit rights to obtain
indemnification  or contribution;  and (iii) the effect of
general principles of equity (including, without limitation, concepts of
materiality,  reasonableness,
good  faith  and  fair  dealing)  and
the  availability  of  equitable  remedies
(including,  without  limitation,  specific  performance
and equitable  relief), regardless of whether considered in a
proceeding in equity or at law.

     

                          E. 
No opinion is expressed herein with respect to (i) the validity or
enforceability of any provision contained in the Transaction Documents allowing
any party to exercise any remedial rights without notice to the Company, (ii)
the validity or enforceability of any waiver of demand by the Company, or any
waiver of any rights or any defense which as a matter of law or public policy
cannot be waived, (iii) the validity or enforceability of any provisions
contained in the Transaction Documents purporting to establish evidentiary
standards, (iv) the validity or enforceability of any provision of the
Transaction Documents which purports to establish the subject matter
jurisdiction of the United States District Court to adjudicate any controversy
related to any of the Transaction Documents, (v) the validity or enforceability
of any provision of the Transaction Documents which purports to entitle any
person or entity to specific performance of any provision thereof, (vi) the
validity or enforceability of any provision of the Transaction Documents which
requires a person or entity to cause another person or entity to take or to
refrain from taking action under circumstances in which such person or entity
does not control such other person or entity, (vii) the validity of
enforceability of any provision of the Transaction Documents insofar as it
purports to effect a choice of governing law or choice of forum for the
adjudication of disputes or (viii) the effectiveness of service of process by
mail in any suit, action or proceeding of any nature arising in connection with
or in any way relating to any Transaction Document.

     

    
      
         


      

      
        B-3

        
          

        

      

      
         


      

    

     

                          F. 
Our opinion expressed above is limited solely to laws, rules and regulations
that in our experience are generally applicable to transactions in the nature of
those contemplated by the Transaction Documents between unregulated
parties.

     

                          G. 
No opinion is expressed as to the validity or enforceability of any provision of
any Transaction Document that (i) requires that waivers or amendments must be in
writing in so far as it suggests that oral or other modifications, amendments or
waivers could not be effectively agreed upon by the parties or that the doctrine
of promissory estoppel might not apply; (ii) waives (a) vague or broadly stated
rights, (b) future rights, (c) the benefits of statutory, regulatory or
constitutional rights, unless and to the extent that the statute, regulation or
constitution expressly allows waiver, (d) unknown future defenses, or (e) rights
to damages; (iii) states that rights or remedies are not exclusive, that every
right or remedy is cumulative and may be exercised in addition to any other
right or remedy, that the election of some particular remedy does not preclude
recourse to one or more others or that failure to exercise or delay in
exercising rights or remedies will not operate as a waiver of any such right or
remedy; (iv) imposes penalties, forfeitures, late payment charges or an increase
in interest rate upon delinquency in payment or the occurrence of a default; (v)
appoints one party as an attorney-in-fact for an adverse party; or (vi) states
that time is of the essence.

     

    Without  limiting  any  of  the  other  limitations,  exceptions  and
qualifications stated elsewhere herein, we express no opinion with regard to the
applicability or effect of the law of any jurisdiction  other than, as
in effect on the date of this letter, the internal laws of the State of New
York.

     

    This opinion letter deals only with the
specified legal issues expressly addressed herein, and you should not infer any
opinion that is not explicitly addressed herein from any matter stated in this
letter.

     

    We  consent  to  the  use  of  this  opinion  as
an  exhibit  to  the
Registration  Statement and the  reference to our firm under
the caption  "Legal Matters" in the Prospectus which is a part of
the  Registration  Statement.  In giving this
consent, we do not hereby admit that we are within the category of persons whose
consent is required under Section 7 of the Securities Act and the rules and
regulations thereunder. This opinion is rendered to you as of the date hereof
and is not to be deemed to have been reissued by any
subsequent  delivery
as  permitted  above,  and we assume
no  obligation  to advise  you or any other
Person  hereafter  with  regard  to
any  change  after  the
date  hereof  in the circumstances or the law that may bear
on the  matters  set forth  herein  even
though the change may affect the legal  analysis or a
legal  conclusion or other matters in this letter.

     

    
      
         


      

      
        B-4

        
          

        

      

      
         


      

    

    


     

                                      Very
truly yours,

     

     

                                      /s/
Paul, Hastings, Janofsky & Walker LLP

     

    
      
         


      

      
        B-5

        
          

        

      

      
         


      

    

     

    Exhibit
C

     

    [Venable
LLP Letterhead]

     

    May 11,
2004

     

     

    Capital
Trust, Inc.

     

    410 Park
Avenue, 14th Floor

     

    New York,
New York 10022

     

     

    Re: Capital Trust, Inc.

     

    Ladies
and Gentlemen:

     

               We
have served as Maryland counsel to Capital Trust, Inc., a Maryland corporation
(the "Company"), in connection with certain matters of Maryland law arising out
of the offering by the Company pursuant to a Prospectus Supplement, dated as of
May 11, 2004 (the "Prospectus Supplement"), of securities consisting of (i) up
to 1,635,000 shares (the "Direct Shares") of Class A Common Stock, par value
$.01 per share (the "Common Stock"), of the Company, and (ii) a warrant (the
"Warrant") exercisable for up to 365,000 shares (the "Warrant Shares" and,
together with the Direct Shares, the "Shares"), covered by the Registration
Statement on Form S-3 (No. 333-111261), and all amendments thereto
(collectively, the "Registration Statement"), as filed with the United States
Securities and Exchange Commission (the "Commission") by the Company under the
Securities Act of 1933, as amended (the "1933 Act"). The Warrant and the Direct
Shares will be issued pursuant to a Securities Purchase Agreement, dated as of
May 11, 2004, by and between the Company and W. R. Berkley Corporation ( the
"Agreement").

     

               In
connection with our representation of the Company, and as a basis for the
opinion hereinafter set forth, we have examined originals, or copies certified
or otherwise identified to our satisfaction, of the following documents
(hereinafter collectively referred to as the "Documents"):

     

               1.
The charter of the Company (the "Charter"), certified as of a recent date by the
State Department of Assessments and Taxation of Maryland (the
"SDAT");

     

               2.
The Amended and Restated Bylaws of the Company, certified as of the date hereof
by an officer of the Company;

     

               3.
A certificate of the SDAT as to the good standing of the Company, dated as of a
recent date;

     

    
      
         


      

      
        C-1

        
          

        

      

      
         


      

    

     

    Venable
LLP

     

    May 11,
2004

     

    Page
2

     

               4.
Resolutions adopted by the Board of Directors of the Company or a duly
authorized committee thereof, relating to the issuance of the Warrant and the
Shares (the "Resolutions"), certified as of the date hereof by an officer of the
Company;

     

               5.
The Agreement, certified as of the date hereof by an officer of the
Company;

     

               6.
A certificate executed by an officer of the Company, dated as of the date
hereof;

     

               7.
The Registration Statement and the related form of prospectus included therein
in the form in which it was transmitted to the Commission under the 1933
Act;

     

               8.
The Prospectus Supplement; and

     

               9.
Such other documents and matters as we have deemed necessary or appropriate to
express the opinion set forth in this letter, subject to the assumptions,
limitations and qualifications stated herein.

     

    In
expressing the opinion set forth below, we have assumed the
following:

     

               1.
Each individual executing any of the Documents, whether on behalf of such
individual or another person, is legally competent to do so.

     

               2.
Each individual executing any of the Documents on behalf of a party (other than
the Company) is duly authorized to do so.

     

               3.
Each of the parties (other than the Company) executing any of the Documents has
duly and validly executed and delivered each of the Documents to which such
party is a signatory, and such party's obligations set forth therein are legal,
valid and binding and are enforceable in accordance with all stated
terms.

     

               4.
All Documents submitted to us as originals are authentic. The form and content
of all Documents submitted to us as unexecuted drafts do not differ in any
respect relevant to this opinion from the form and content of such Documents as
executed and delivered. All Documents submitted to us as certified or
photostatic copies conform to the original documents. All signatures on all
Documents are genuine. All public records reviewed or relied upon by us or on
our behalf are true and complete. All representations, warranties, statements
and information contained in the Documents are true and complete. There has been
no oral or written modification of or amendment to any of the Documents, and
there has been no waiver of any provision of any of the Documents, by action or
omission of the parties or otherwise.

     

    
      
         


      

      
        C-2

        
          

        

      

      
         


      

    

     

    Venable
LLP

     

    May 11,
2004

     

    Page
3

     

               5.
None of the Shares will be issued, sold or transferred in violation of the
restrictions on ownership and transfer contained in Article VII of the Charter
and, upon issuance of any of the Shares, the total number of shares of Common
Stock issued and outstanding will not exceed the total number of shares of
Common Stock that the Company is then authorized to issue under the Charter. The
issuance of the Warrant Shares and up to 325,000 Direct Shares will have been
approved by the stockholders of the Company in accordance with the listing
standards of the New York Stock Exchange, Inc. prior to the issuance
thereof.

     

               Based
upon the foregoing, and subject to the assumptions, limitations and
qualifications stated herein, it is our opinion that:

     

               1.
The Company is a corporation duly incorporated and existing under and by virtue
of the laws of the State of Maryland and is in good standing with the
SDAT.

     

               2.
The Direct Shares have been duly authorized and, when issued and delivered by
the Company pursuant to the Charter, the Resolutions and the Agreement, will be
validly issued, fully paid and non-assessable.

     

               3.
The Warrant has been duly authorized by all necessary corporate action on the
part of the Company. The Warrant Shares have been duly authorized and, when
issued and delivered by the Company upon exercise of the Warrant in accordance
with its terms pursuant to the Charter, the Resolutions and the Agreement, will
be validly issued, fully paid and non-assessable.

     

               The
foregoing opinion is limited to the substantive laws of the State of Maryland
and we do not express any opinion herein concerning any other law. We express no
opinion as to the applicability or effect of any federal or state securities
laws, including the securities laws of the State of Maryland, or as to federal
or state laws regarding fraudulent transfers. To the extent that any matter as
to which our opinion is expressed herein would be governed by any jurisdiction
other than the State of Maryland, we do not express any opinion on such
matter.

     

               We
assume no obligation to supplement this opinion if any applicable law changes
after the date hereof or if we become aware of any fact that might change the
opinion expressed herein after the date hereof.

     

    
      
         


      

      
        C-3

        
          

        

      

      
         


      

    

     

    Venable
LLP

     

    May 11,
2004

     

    Page
4

     

               This
opinion is being furnished to you for your submission to the Commission as an
exhibit to the report filed on Form 8-K (the "8-K"), to be filed by the Company
with the Commission on or about the date hereof. We hereby consent to the filing
of this opinion as an exhibit to the 8-K and to the use of the name of our firm
therein and under the caption "Legal

     

               Matters"
in the Prospectus Supplement related to the Shares, which supplements the
prospectus included in the Registration Statement. In giving this consent, we do
not admit that we are within the category of persons whose consent is required
by Section 7 of the Act.

     

    Very
truly yours,

     

    /s/
Venable LLP

     

    


    
      
         


      

      
        C-4

        
          

        

      

      
         


      

       

      
        Exhibit
D

         

        REGISTRATION
RIGHTS AGREEMENT

        


                   THIS
REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of May 11, 2004 by
and among Capital Trust, Inc., a Maryland corporation (the "Company"), and W. R.
Berkley Corporation, a Delaware corporation ("Berkley"). Berkley and its
designated controlled Affiliates identified on Schedule A attached hereto are
each referred to in this Agreement as an "Initial Holder" and are collectively
referred to in this Agreement as the "Initial Holders" (provided that only
Berkley shall be a direct party hereto and responsible for its obligations
hereunder).

        


        Recitals

        


                   WHEREAS,
pursuant to the terms of that certain securities purchase agreement, dated as of
the date hereof, among the Company, the Initial Holders and the stockholders
named therein (the "Securities Purchase Agreement"), the Company has agreed to
sell to the Initial Holders and the Initial Holders have agreed to purchase (1)
at the Initial Closing 1,310,000 shares (the "Tranche 1 Shares") of class A
common stock, par value $.01 per share, of the Company (the "Common Stock") and
a warrant (the "Warrant") initially exercisable for 365,000 shares (the "Warrant
Shares") and (2) at the Subsequent Closing 325,000 shares of Common Stock (the
"Tranche 2 Shares") and together with the Tranche 1 Shares and the Warrant
Shares, the "Shares"); and

        


                   WHEREAS,
pursuant to the Securities Purchase Agreement, the Company has agreed to grant
to the Holders (as defined below) the registration rights set forth in this
Agreement.

        


                   NOW,
THEREFORE, the parties hereto, in consideration of the mutual covenants and
agreements hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, hereby agree as
follows:

        


           Section
1.   Definitions.

        


                   Capitalized
terms used, but not otherwise defined herein, shall have the meanings assigned
to such terms in the Securities Purchase Agreement. As used in this Agreement,
the following capitalized defined terms shall have the following
meanings:

        


                   "Affiliate"
means, with respect to any Person, any other Person that directly or indirectly
controls or is controlled by or is under common control with such Person. For
the purposes of this definition, "control", when used with respect to any
Person, means possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of the such Person, whether through
the ownership of voting securities, by contract or otherwise; and the terms of
"affiliated", "controlling" and "controlled" have meanings correlative to the
foregoing.

        


        
          
             


          

          
            D-1

            
              

            

          

          
             


          

        

         

                   "Agent"
means the principal placement agent on an agented placement of Registrable
Securities.

        


                   "Business
Day" means a day other than a Saturday, Sunday or other day on which banking
institutions in New York, New York are permitted or required by any applicable
law to close.

        


                   "Commission"
means the Securities and Exchange Commission.

         

                   "Common
Stock" has the meaning set forth in the Recitals.

         

                   "Company"
has the meaning set forth in the Preamble and also includes the Company's
successors.

        


                   "Continuously
Effective" means, with respect to a specified registration statement, that it
shall not cease to be effective and current and compliant with respect to
applicable disclosure requirements and available for Transfers of Registrable
Securities thereunder, and shall not be subject to any stop order or similar
order issued by the Commission, for longer than either (i) any ten (10)
consecutive Business Days, or (ii) an aggregate of fifteen (15) Business Days
during the period specified in the relevant provision of this
Agreement.

        


                   "Exchange
Act" means the Securities Exchange Act of 1934, as amended from time to
time.

        


                   "Demand
Registration" shall have the meaning set forth in Section 2(a).

        


                   "Demanding
Holders" shall have the meaning set forth in Section 2(a).

         

                   "Holder"
or "Holders" means the Initial Holder(s) or each Person to whom a Holder
Transfers Registrable Securities in accordance with Section 7(c) whenever such
Person owns of record Registrable Securities. If the Company receives
conflicting instructions, notices or elections from two or more Persons with
respect to the same Registrable Securities, the Company may act upon the basis
of the instructions, notice or election received from the registered owner of
such Registrable Securities.

        


                   "Initial
Holder" or "Initial Holders" has the meaning set forth in the
Preamble

        


                   "Majority
Selling Holders" means those Selling Holders whose Registrable Securities
included in such registration represent a majority of the Registrable Securities
of all Selling Holders included therein.

         

                   "NASD"
means the National Association of Securities Dealers, Inc.

                                            

        
          
             


          

          
            D-2

            
              

            

          

          
             


          

        

         

                   "Person"
means an individual, partnership, corporation, limited liability company, trust,
estate, or unincorporated organization, or other entity, or a government or
agency or political subdivision thereof.

         

                   "Register,"
"Registered" and "Registration" refer to a registration effected by preparing
and filing a registration statement or similar document in compliance with the
Securities Act, and the declaration or ordering by the Commission of
effectiveness of such registration statement or document.

         

                   "Registrable
Securities" means (i) the Tranche 1 Shares and Tranche 2 Shares purchased
pursuant to the Securities Purchase Agreement; (ii) the Warrant Shares issuable
upon the exercise of the Warrant purchased pursuant to the Securities Purchase
Agreement; (iii) any shares of Common Stock or other securities issued as (or
issuable upon the conversion or exercise of any warrant, right or other security
which is issued as) a dividend or other distribution with respect to, or in
exchange by the Company generally for, or in replacement by the Company
generally of, the Shares; and (iv) any securities issued in exchange for such
shares of Common Stock in any merger, combination or reorganization of the
Company; provided, however, that Registrable Securities shall not include any
securities which have theretofore been registered pursuant to this Agreement and
sold by a Holder pursuant to the Securities Act or which have been sold by a
Holder to the public pursuant to Rule 144 or any similar rules promulgated by
the Commission pursuant to the Securities Act, and, provided further, that the
Company shall have no obligation under Section 2 to register any Registrable
Securities of any Holder if the Company shall deliver to the Holders requesting
such registration an opinion of counsel reasonably satisfactory to such Holders
and their counsel to the effect that such Registrable Securities may be resold
pursuant to Rule 144(k) under the Securities Act (or any successor provision)
or, at the time of calculation, one hundred percent (100%) of such Holder's
Registrable Securities may be resold in a single ninety (90) day period under
Rule 144 of the Securities Act. For purposes of this Agreement, a Person will be
deemed to be a Holder of Registrable Securities whenever such Person has the
then-existing right to acquire such Registrable Securities (by conversion,
purchase or otherwise), whether or not such acquisition has actually been
effected.

        


                   "Rule
144" and "Rule 145" mean Rule 144 and Rule 145 promulgated under the Securities
Act.

        


                   "Securities
Act" means the Securities Act of 1933, as amended from time to
time.

        


                   "Selling
Holders" means, with respect to a specified registration pursuant to this
Agreement, the Holders whose Registrable Securities are proposed to be included
in such registration.

        


                   "Securities
Purchase Agreement" has the meaning set forth in the Recitals.

        


        
          
             


          

          
            D-3

            
              

            

          

          
             


          

        

         

                   "Transfer"
means and includes the act of selling, giving, transferring, creating a trust
(voting or otherwise), assigning or otherwise disposing of (other than pledging,
hypothecating or otherwise transferring as security or any transfer upon any
merger or consolidation) (and correlative words shall have correlative
meanings); provided however, that any transfer or other disposition upon
foreclosure or other exercise of remedies of a secured creditor after an event
of default under or with respect to a pledge, hypothecation or other transfer as
security shall constitute a Transfer.

         

                   "Underwriters'
Representative" means the managing underwriter, or , in the case of a co-managed
underwriting, the managing underwriter designated as the Underwriters'
Representative by the co-managers.

        


        Section
2.   Demand
Registration.

        


                   (a)   Request for Demand
Registration.

         

               (i)
Subject to Sections 2(b), 2(d) and 2(e) below, at any time, if one or
more Holders shall make a written request to the Company (the "Demanding
Holders"), the Company shall cause there to be filed with the Commission
a registration statement meeting the requirements of the Securities
Act (a "Demand Registration"), and each Demanding Holder shall be entitled
to have included therein (subject to Section 3 hereof) all or such number of
such Demanding Holder's Registrable Securities as the Demanding Holder
shall request in writing. Any request made pursuant to this Section 2(a)
shall be addressed to the attention of the Secretary of the Company, and
shall
specify the number of Registrable Securities to be registered, the intended
methods of disposition thereof and that the request is for a Demand Registration
pursuant to this Section 2(a).

         

               (ii)
Whenever the Company shall have received a demand pursuant to Section
2(a) to effect the Demand Registration of any Registrable Securities,
the
Company shall promptly give written notice of such proposed registration
to all
Holders of Registrable Securities, if any. Any such Holder may, within
twenty
(20) days after receipt of such notice, request in writing that all of
such
Holder's Registrable Securities, or any portion thereof designated by
such
Holder, be included in the registration and such request shall not be
considered
one of the Demand Registrations under Section 2(a) to which Holders
are entitled under Section 2(b)(i).

         

        
          
             


          

          
            D-4

            
              

            

          

          
             


          

        

         

                   (b)   Limitations on Demand
Registrations.

        


               (i)
The Company shall be obligated to effect no more than four Demand Registrations
in total and no more than two such registrations in any twelve-month
period. For purposes of the preceding sentence, registration shall not
be deemed to have been effected (A) unless a registration statement with
respect thereto has become effective, (B) if after such registration
statement
has become
effective, such registration or the related offer, sale or
distribution of Registrable Securities thereunder is interfered with by
any stop
order, injunction or other order or requirement of the Commission or
other
governmental agency or court for any reason not attributable to the Selling
Holders and such interference is not thereafter eliminated, or (C) if
the
conditions to closing specified in the underwriting agreement, if any,
entered
into in connection with such registration are not satisfied or waived
by reason
of a failure on the part of the Company, unless caused by a Selling Holder.
If the Company shall have complied with its obligations under this Section
2, a right to demand a registration pursuant to Section 2(a) shall be
deemed to
have been satisfied upon the earlier of (X) the date as of which all of
the Registrable Securities included therein shall have been disposed
of
pursuant to a registration statement, (Y) the date when all of the Registrable
Securities covered by the Registration Statement cease to be Registrable
Securities and (Z) the date as of which such Demand Registration shall
have been Continuously Effective for a period of not less than one hundred
eighty (180) days ("Minimum Effective Period").

         

        
          
             


          

          
            D-5

            
              

            

          

          
             


          

        

         

        
                 (ii)
Notwithstanding the foregoing, the Demand Registration rights granted to the
Holders in Section 2(a) are subject to the following limitations: (A) each
registration in respect of a Demand Registration must include Registrable
Securities having an aggregate market value of at least $5,000,000, which market
value shall be determined by multiplying the number of Registrable Securities to
be included in the Demand Registration by the proposed per share offering price
(provided that (x) the limitation set forth in this clause (A) shall not be in
effect at any time the Holders' Registrable Securities are not able to be sold
under Rule 144 because of the Company's failure to comply with the information
requirements thereunder, unless at such time, the Company's counsel delivers a
written opinion of counsel, which shall be in a form reasonably satisfactory to
such Holder's counsel, to such Holders to the effect that such Holder's
Registrable Securities may be publicly offered and sold without registration
under the Act and (y) if the Underwriters' Representative or Agent advises the
Company in writing that, in its opinion, the amount of securities requested to
be included in such offering exceeds the amount which can be sold in such
offering without adversely affecting the marketability of the offering, the
minimum aggregate market value of Registrable Securities to be included in such
Demand Registration may be reduced to the extent required, but in no event may
the aggregate market value of the Registrable Securities included therein be
lower than $2,000,000); (B) the Company shall not be required to cause a
registration pursuant to Section 2(a) to be declared effective within a period
of one hundred twenty (120) days of the effective date of any registration
statement of the Company effected in connection with a Demand Registration,
provided the Company has not breached its obligations under Section 2(a); (C)
the Demand Registration rights contained herein shall be subject to the terms
and conditions of the registration rights and other terms and conditions
contained in Section 7.3 of the
Preferred Share Purchase Agreement, dated as of June 16, 1997, as amended,
between the Company, formerly known as California Real Estate Investment Trust,
and Veqtor Finance Company, LLC, and Section 6 of the Registration Rights
Agreement, dated as of July 28, 1998, among the Company, Vornado Realty L.P.,
EOP Operating Limited Partnership, Mellon Bank N.A., as trustee for General
Motors Hourly-Rate Employees Pension Trust and Mellon Bank N.A., as trustee for
General Motors Salaried Employees Pension Trust (the "Existing Registration
Rights") and the Company shall not be required to cause a registration pursuant
to Section 2(a) to be declared effective or to include any Registrable
Securities in a Demand Registration hereunder to the extent not permitted by the
Existing Registration Rights; (D) the Company shall not be required to file a
registration statement at any time prior to October 11, 2004 nor have any
registration statement declared effective prior to November 11, 2004 if filed
prior thereto unless Purchaser is permitted to sell, transfer or otherwise
dispose of Registrable Securities prior to such time pursuant to Section 2.7 of
the Securities Purchase Agreement; (E) the Company shall not be required to file
a registration statement or to keep a registration statement effective and
current and compliant with respect to applicable disclosure requirements and the
Company shall be permitted to suspend the use of any then effective registration
statement if the Chief Executive Officer or the Chief Financial Officer of the
Company certifies to the Holders in writing the existence of circumstances
relating to a material pending development, including, but not limited to a
pending or contemplated material acquisition or merger or other material
transaction or event, which would require additional disclosure by the Company
in the registration statement of previously non-public material information
which the Company in its good faith judgment has a bona fide business purpose
for keeping confidential and the nondisclosure of which in the registration
statement might cause the registration statement to fail to comply with
applicable disclosure requirements; provided, however, that the Company may not
delay the filing of a registration or documents necessary to keep an existing
registration statement effective and current and compliant nor suspend the use
thereof for such reason for more than ninety (90) days in the aggregate in any
calendar year; and (F) the Company shall not be required to file a registration
statement or to keep a registration statement effective and current and
compliant and the Company shall be permitted to suspend the use of any then
effective registration statement during the period starting with the date
fifteen (15) days prior to the Company's good faith estimate, as certified in
writing by an executive officer of the Company to the Holders, of the date of
the proposed pricing of an underwritten public offering of equity securities of
the Company for the account of the Company whether covered by a prospectus under
primary registration statement filed specifically for the proposed offering or a
prospectus supplement under an effective primary shelf registration statement on
file pursuant to Rule 415 under the Securities Act, and ending on the date
ninety (90) days following the consummation of such underwritten public
offering; provided, however, in the case of foregoing clauses (E) and
(F), the Minimum Effective Period shall be extended by the aggregate
number of days of such period of restriction.

        

         

        
          
             


          

          
            D-6

            
              

            

          

          
             


          

        

         

                   (c)
Effective Demand Registration. Following receipt of a request for a Demand
Registration, the Company shall:

         

               (i)
file the registration statement with the Commission as promptly as
practicable, and shall use the Company's commercially reasonable efforts
to have
the registration declared effective under the Securities Act as soon
as
reasonably practicable, in each instance giving due regard to the need to
prepare
current financial statements, conduct due diligence and complete other
actions that are reasonably necessary to effect a registered public offering;
and

        
       (ii)
use the Company's commercially reasonable efforts to keep the relevant
registration statement Continuously Effective for no less than the Minimum
Effective Period or until such earlier date as of which all the Registrable
Securities under the registration statement filed pursuant to the Demand
Registration shall have been disposed of in the manner described in the
registration statement. Notwithstanding the foregoing, if for any reason
the
effectiveness of a registration pursuant to this Section 2 is suspended
or such
registration statement shall not be current and compliant with respect
to applicable disclosure requirements, the Minimum Effective Period shall be
extended by the aggregate number of days of such suspension or period of
non-compliance.

        


                   (d)
Form of Registration Statement. A registration pursuant to this Section 2 shall
be on such appropriate registration form of the Commission as shall (i) be
selected by the Company and be reasonably acceptable to the Majority Selling
Holders and (ii) permit the disposition of the Registrable Securities in
accordance with the intended method or methods of disposition specified in the
request pursuant to Section 2(a).

        


                   (e)
Selection of Underwriters. If any registration pursuant to Section 2(a) involves
an underwritten offering (whether on a "firm," "best efforts" or "all reasonable
efforts" basis or otherwise), or an agented offering, the Majority Selling
Holders shall have the right to select the underwriter or underwriters and
manager or managers to administer such underwritten offering or the placement
agent or agents for such agented offering; provided, however, that each Person
so selected shall be reasonably acceptable to the Company.

        


                Section
3.   Registration Procedures.

        


                   (a)
Obligations of the Company. Whenever required under Section 2 to effect a Demand
Registration of any Registrable Securities, the Company shall use its
commercially reasonable efforts to:

         

        
          
             


          

          
            D-7

            
              

            

          

          
             


          

        

         

               (i)
Prepare and file with the Commission a registration statement with
respect to such Registrable Securities (which registration statement
shall be
available for the Selling Holders' intended method of distribution and
comply in all material respects with the requirements of the applicable
form and
include all financial statements required by the Commission to be filed
therewith) and cause such registration statement to become effective.


         

               (ii)
Notify each Selling Holder when the registration statement and any
post-effective amendments thereto are declared effective. 

         

               (iii)
Notify each Selling Holder of the receipt of any comments from the
Commission with respect to the registration statement and, subject to
Section
2(b)(ii), respond to such comments and prepare and file with the Commission,
if necessary, such amendments and supplements to such registration
statement and the prospectus used in connection with such registration
statement or any document incorporated therein by reference or file any
other required document as may be necessary to comply with the provisions
of the Securities Act and rules thereunder with respect to the disposition
of all securities covered by such registration statement and the instructions
applicable to the registration form used by the Company. In the event
that any Registrable Securities included in a registration statement
subject
to, or required by, this Agreement remain unsold at the end of the period
during which the Company is obligated to use its commercially reasonable
efforts to maintain the effectiveness of such registration statement,
the Company may file a post-effective amendment to the registration
statement for the purpose of removing such securities from registered
status.

         

               (iv)
Furnish to each Selling Holder of Registrable Securities, without
charge, such numbers of copies of the registration statement, any pre-effective
or post-effective amendment thereto, the prospectus, including each
preliminary prospectus and any amendments or supplements thereto, in
each case
in conformity with the requirements of the Securities Act and the rules
thereunder, and such other related documents as any such Selling Holder
may
reasonably request in order to facilitate the disposition of Registrable
Securities
owned by such Selling Holder.

         

               (v)
Register and qualify the securities covered by such registration statement
under such other securities or blue sky laws of such states or jurisdictions
as shall be reasonably requested by the Underwriters' Representative
or Agent (as applicable, or if inapplicable, the Majority Selling
Holders) and to keep such qualification effective during the period such
registration statement is effective and obtain the withdrawal of any
order
suspending the effectiveness of a registration statement, or the lifting
of any suspension of the qualification (or exemption from qualification)
of the offer and transfer of any of the Registrable Securities in any
jurisdiction, at the earliest possible moment; provided, however, that the
Company shall not be required in connection therewith or as a
condition thereto to qualify to do business, subject itself to taxation in
any such
jurisdiction, or to file a general consent to service of process in any such
states or jurisdictions.

         

        
          
             


          

          
            D-8

            
              

            

          

          
             


          

        

         

               (vi)
in the event of any underwritten or agented offering, enter into and
perform the Company's obligations under an underwriting or agency agreement
(including indemnification and contribution obligations of underwriters
or agents and representations and warranties by the Company to the
Selling Holders and the underwriters), in usual and customary form, with
the
managing underwriter or underwriters of or agents for such offering and
use its
commercially reasonable efforts to obtain executed lock-up agreements
from the
officers and directors of the Company and from the holders of more than 5%
of the Company's equity securities, if requested by the underwriters.
The
Company shall also cooperate with the Majority Selling Holders and the
Underwriters'
Representative or Agent for such offering in the marketing of the
Registrable Shares, including making available the Company's officers,
accountants,
counsel, premises, books and records for such purpose, but the Company
shall not be required to incur any material out-of-pocket expense pursuant
to this sentence and shall not be required to conduct a road-show in
connection
therewith.

         

               (vii)
Notify each Selling Holder of any stop order issued or threatened
to be issued by the Commission in connection therewith and take all
reasonable actions required to prevent the entry of such stop order or to
remove it
if entered.

         

               (viii)
Notify each Selling Holder of the happening of any transaction or event
during the period a registration statement is effective which is of a type
specified in Section 2(b)(ii)(C) or as a result of which such registration
statement or the related prospectus contains any untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein in light of the circumstances
under which they were made (in the case of any prospectus), not misleading.

         

               (ix)
Make generally available to the Company's security holders copies of
an earnings statement satisfying the provisions of Section 11(a) of the
Securities Act no later than ninety (90) days following the end of the
12-month
period beginning with the first month of the Company's first fiscal quarter
commencing after the effective date of each registration statement filed
pursuant to this Agreement.

         

        
          
             


          

          
            D-9

            
              

            

          

          
             


          

        

         

               (x)
Make available for inspection by any Selling Holder, any underwriter
participating in such offering and the representatives of such Selling
Holder and Underwriter (but not more than one firm of counsel to such
Selling
Holders), all financial and other information as shall be reasonably
requested
by them, and provide the Selling Holders, any underwriter participating
in such offering and the representatives of such Selling Holders
and Underwriters the opportunity
discuss the business affairs of the Company with its principal
executives and independent public accountants who have certified the
audited financial statements included in such registration statement in
each case
all as necessary to enable them to exercise their due diligence responsibility
under the Securities Act; provided, however, that information that the
Company determines, in good faith, to be confidential and which the Company
advises such Person in writing is confidential shall not be disclosed
unless
such Person signs a confidentiality agreement reasonably satisfactory
to the
Company or the related Selling Holder of Registrable Securities agrees
to be
responsible for such Person's breach of confidentiality on terms reasonably
satisfactory to the Company.

         

               (xi)
Obtain a so-called "comfort letter" from the Company's independent
public accountants, and legal opinions of counsel to the Company addressed
to the Selling Holders, in customary form and covering such matters of the
type customarily covered by such letters, and in a form that shall be
reasonably
satisfactory to Majority Selling Holders. The Company shall furnish
to each Selling Holder a signed counterpart of any such comfort letter or
legal opinion. Delivery of any such opinion or comfort letter shall be
subject to the recipient furnishing such written representations or acknowledgements
as are customarily provided by selling shareholders who receive
such comfort letters or opinions.

         

               (xii)
Provide and cause to be maintained a transfer agent and registrar
for all Registrable Securities covered by such registration statement
from and after a date not later than the effective date of such registration
statement.

         

               (xiii)
Cause the Registrable Securities to continue to be listed on the New
York Stock Exchange, Inc.

         

               (xiv)
Provide a CUSIP number for the Registrable Securities prior to the
effective date of the first registration statement including Registrable
Securities.

         

               (xv)
Take such other actions as are reasonably required in order to expedite
or facilitate the disposition of Registrable Securities included in each such
registration.

         

                   (b)
Holders' Obligations. In connection with any registration pursuant to Section 2,
each Selling Holder agrees, as applicable: 

         

               (i)
to execute the underwriting agreement, if any, agreed to by the Majority
Selling Holders or the Company, as the case may be; 

         

               (ii)
that it will not offer or sell its Registrable Securities under the
registration statement until it has received copies of the supplemented
or
amended prospectus
contemplated by Section 3(a)(iii) and receives notice that any
post-effective amendment (if required) has become effective; 

         

        
          
             


          

          
            D-10

            
              

            

          

          
             


          

        

         

               (iii)
that, upon receipt of any notice from the Company of the happening
of any transaction or occurrence of any event of the kind specified in
Sections 2(b)(ii)(C), 2(b)(ii)(D), 3(a)(iii), 3(a)(vii) or 3(a)(viii),
such
Holder will forthwith discontinue disposition of Registrable Securities
pursuant
to any registration statement at issue until such Holder's receipt of copies
of a supplemented or amended prospectus contemplated by Section 3(a)(iii)
and receives notice that any post-effective amendment (if required) has
become effective or until it is advised in writing by the Company that
the use
of the applicable prospectus and registration statement may be resumed,
and, if so directed by the Company, such Holder will deliver to the Company
(at the Company's expense) all copies in such Holder's possession, other
than permanent file copies then in such Holder's possession, of the registration
statement and prospectus covering such Registrable Securities current
at the time of receipt of such notice; and

         

               (iv)
that the Company may require each Selling Holder as to which any registration
is being effected to furnish to it such information regarding such
Selling Holder, the number of the Registrable Securities owned by it and
the
intended method of disposition of such Registrable Securities as may be
required
to effect the registration of such Selling Holder's Registrable Securities,
and to cooperate with the Company in preparing such registration, the
Company may exclude from such registration the Registrable Securities of
any
Selling Holder who fails to furnish such information within 5 Business
Days
after receiving such request and to provide such cooperation, and the
Company
shall have no obligation to register under the Securities Act the Registrable
Securities of a proposed Selling Holder who so fails to furnish such
information or provide such cooperation.

         

                   (c)
Lock-Up Agreement. If requested in writing by the Company, each Holder agrees to
execute a lock-up agreement pursuant to which such Holder shall not effect any
public or private sale or distribution, including sales pursuant to Rule 144 of
the Securities Act (but excluding Transfers, whether public or private to an
Affiliate of such Holder), of Common Stock, or any securities convertible into
or exchangeable or exercisable for such securities, held by such Holder during
the period starting with date fifteen (15) days prior to the Company's good
faith estimate, as certified in writing by an executive officer of the Company
to the Holders, of the date of the proposed pricing of an underwritten public
offering of equity securities of the Company for the account of the Company
whether covered by a prospectus under primary registration statement filed
specifically for the proposed offering or a prospectus supplement under an
effective primary shelf registration statement on file pursuant to Rule 415
under the Securities Act, and ending on the date ninety (90) days following the
consummation of such underwritten
public offering; provided, however, that each Holder shall be required to
execute a lock-up agreement in accordance with this Section 3(c) only in the
event that each other stockholder of the Company holding 5% or more of the then
outstanding Common Stock on a fully-diluted basis (including securities
convertible into or exchangeable for Common Stock) executes a lock-up agreement
on substantially the same terms as set forth herein.

         

        
          
             


          

          
            D-11

            
              

            

          

          
             


          

        

         

           Section
4.   Expenses of Registration. The Company shall bear and pay all
expenses incurred in connection with any registration, filing, or qualification
of Registrable Securities with respect to a Demand Registration for each Selling
Holder, including all registration, exchange listing, accounting, filing and
NASD fees, all fees and expenses of complying with securities or blue sky laws,
all word processing, duplicating and printing expenses, messenger and delivery
expenses, the reasonable fees and disbursements of counsel for the Company, and
of the Company's independent public accountants, including the expenses of
"comfort letters" required by or incident to such performance and compliance and
reasonable fees and disbursements of one firm of counsel for the Initial Holders
(selected by the Selling Holders who constitute Majority Selling Holders);
provided, however, that the Company shall not be required to pay for any
expenses of any registration proceeding begun pursuant to Section 2 if the
registration is subsequently withdrawn at the request of the Selling Holders (if
such request is not made as a result of any action or inaction of the Company)
(in which case all Selling Holders and any other Holders of Registrable
Securities to be included in the registration shall bear such expenses pro rata
according to their number of shares requested to be registered), unless all
Holders of Registrable Securities then outstanding agree that such withdrawn
registration shall constitute one of the Demand Registrations under Section 2(a)
hereof. Holders shall be responsible for any underwriting discounts and
commissions and taxes of any kind (including without limitation, transfer taxes)
relating to any disposition, sale or transfer of Registrable
Securities.

        


           Section
5.   Indemnification; Contribution.

        


                   (a)
Indemnification by the Company. If any Registrable Securities are included in a
registration statement under this Agreement:

        


               (i)
To the extent permitted by applicable law, the Company shall indemnify and hold
harmless each Selling Holder, each Person, if any, who controls such Selling
Holder within the meaning of the Securities Act, and each officer, director,
trustee, partner, and employee of such Selling Holder and such controlling
Person, against any and all losses, claims, damages, liabilities and expenses
(joint or several), including reasonable attorneys' fees and disbursements and
expenses of investigation, incurred by such party pursuant to any actual or
threatened action, suit, proceeding or investigation, or to which any of the
foregoing Persons may become subject under the Securities Act, the Exchange Act
or other federal or state laws, insofar as such losses, claims, damages,
liabilities and expenses arise out of or are based upon any of the
following statements, omissions or violations:

         

        
          
             


          

          
            D-12

            
              

            

          

          
             


          

        

         

                   (A)
Any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein, or any amendments
or supplements thereto or any document incorporated by reference
therein;

         

                   (B)
Any omission or alleged omission to state therein a material
fact required to be stated therein, or necessary to make the statements
therein (in light of the circumstances under which they were made
in the case of any prospectus) not misleading; or

         

                   (C)
Any violation or alleged violation by the Company of the federal
securities laws, any applicable state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or
any applicable state securities law;

        


        provided,
however, that the indemnification required by this Section 5(a) shall not apply
to amounts paid in settlement of any such loss, claim, damage, liability or
expense if such settlement is effected without the consent of the Company, which
consent shall not be unreasonably withheld, nor shall the Company be liable in
any such case for any such loss, claim, damage, liability or expense to the
extent that it arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any such Registration
Statement in reliance upon and in conformity with written information furnished
to the Company by a Holder, underwriter or the indemnified party expressly for
use in connection with such registration; provided, further, that the indemnity
agreement contained in this Section 5(a) shall not apply to any underwriter to
the extent that any such loss is based on or arises out of an untrue statement
or alleged untrue statement of a material fact, or an omission or alleged
omission to state a material fact, contained in or omitted from any preliminary
prospectus if the final prospectus shall correct such untrue statement or
alleged untrue statement, or such omission or alleged omission, and a copy of
the final prospectus has not been sent or given to such Person at or prior to
the confirmation of sale to such Person. The Company shall also indemnify
underwriters participating in the distribution of the Registrable Securities,
their officers, directors, agents and employees and each Person who controls
such Persons (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) to the same extent as provided above with respect to the
indemnification of the Selling Holders.

         

        
          
             


          

          
            D-13

            
              

            

          

          
             


          

        

         

               (ii)
Indemnification by Holder. If any of a Selling Holder's Registrable
Securities are included in a registration statement under this Agreement,
to the extent permitted by applicable law, such selling Holder shall
indemnify and hold harmless the Company, each of its directors, each of
its
officers who shall have signed the registration statement, each Person,
if any,
who controls
the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, any other Selling Holder, any controlling
Person of
any such other selling Holder and each officer, director, partner, and
employee of such other Selling Holder and such controlling Person, against
any and all losses, claims, damages, liabilities and expenses (joint
and
several), including reasonable attorneys' fees and disbursements and
expenses
of investigation, incurred by such party pursuant to any actual or threatened
action, suit, proceeding or investigation, or to which any of the foregoing
Persons may otherwise become subject under the Securities Act, the Exchange
Act or other federal or state laws, insofar as such losses, claims, damages,
liabilities and expenses arise out or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the applicable
registration statement, including any preliminary prospectus or final
prospectus contained therein, or any amendments or supplements thereto
or any
document incorporated by reference therein or any omission or alleged
omission
to state therein a material fact required to be stated therein, or necessary
to make the statements therein (in light of the circumstances under which
they were made in the case of any prospectus) not misleading or any violation
or alleged violation by any Holder or underwriter of the federal securities
laws, any applicable state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any applicable
state securities law, but only to the extent, that such untrue statement
or omission had been contained in any information furnished in writing
by such Selling Holder to the Company expressly for use in connection
with such
registration; provided, however, that (x) the indemnification required
by this Section 5(b) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or expense if settlement is effected
without the consent of the relevant Selling Holder of Registrable Securities,
which consent shall not be unreasonably withheld, and (y) in no event
shall the amount of any indemnity under this Section 5(b) exceed the
gross
proceeds from the applicable offering received by such selling Holder.
In no
event shall a Holder be jointly liable with any other Holder as a result of
its indemnification obligations.

         

        
          
             


          

          
            D-14

            
              

            

          

          
             


          

        

         

                   (b)
Conduct of Indemnification Proceedings. Promptly after receipt by an indemnified
party under this Section 5 of notice of the commencement of any action, suit,
proceeding, investigation or threat thereof made in writing for which such
indemnified party may make a claim under this Section 5, such indemnified party
shall deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with counsel
retained by the indemnifying party (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties); provided, however, that such
counsel shall be reasonably satisfactory to the indemnified party. The failure
to deliver written notice to the indemnifying party within a reasonable time
following
the commencement of any such action, if it prejudices or results in forfeiture
of rights or defenses, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 5, to the extent of any damage directly
suffered by the indemnifying party as a result thereof. Any fees and expenses
incurred by the indemnified party (including any fees and expenses incurred in
connection with investigating or preparing to defend such action or proceeding)
shall be paid to the indemnified party, as incurred, within thirty (30) days of
written notice thereof to the indemnifying party. Any such indemnified party
shall have the right to employ separate counsel in any such action, claim or
proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be the expenses of such indemnified party unless (i) the
indemnifying party has agreed to pay such fees and expenses, (ii) the
indemnifying party shall have failed to promptly assume the defense of such
action, claim or proceeding or (iii) the named parties to any such action, claim
or proceeding (including any impleaded parties) include both such indemnified
party and the indemnifying party, and such indemnified party shall have been
advised by counsel that there may be one or more legal defenses available to it
which are different from or in addition to those available to the indemnifying
party (in which case, if such indemnified party notifies the indemnifying party
in writing that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the defense of such action, claim or proceeding on behalf of such indemnified
party, it being understood, however, that the indemnifying party shall not, in
connection with any one such action, claim or proceeding or separate but
substantially similar or related actions, claims or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one additional firm of
attorneys (together with appropriate local counsel) at any time for all such
indemnified parties. No indemnifying party shall be liable to an indemnified
party for any settlement of any action, proceeding or claim without the written
consent of the indemnifying party, which consent shall not be unreasonably
withheld.

        


                   (c)
Contribution. If the indemnification required by this Section 5 from the
indemnifying party is unavailable to an indemnified party hereunder in respect
of any losses, claims, damages, liabilities or expenses referred to in this
Section 5:

        


               (i)
The indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as
a result of such losses, claims, damages, liabilities or expenses in
such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which
resulted in such losses, claims, damages, liabilities or expenses, as
well as
any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified parties shall be determined by reference
to, among other things, whether any action has been committed by, or
relates to information supplied by, such indemnifying party or indemnified
parties,
and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent
such action. The amount paid or payable by a party as a result of the
losses,
claims, damages, liabilities and expenses referred to above shall be
deemed to
include, subject to the limitations set forth in Section 5(a) and Section
5(b), any legal or other fees or expenses reasonably incurred by such
party in
connection with any investigation or proceeding. 

         

        
          
             


          

          
            D-15

            
              

            

          

          
             


          

        

         

               (ii) The
parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation
or by any other method of allocation which does not take into account
the equitable considerations referred to in Section 5(d)(i). No Person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of
the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.

         

                   (d)
Full Indemnification. If indemnification is available under this Section 5, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in this Section 5 without regard to the relative fault of such
indemnifying party or indemnified party or any other equitable consideration
referred to in Section 5(d)(i) hereof.

        


                   (e)
Survival. The obligations of the Company and the Selling Holders of Registrable
Securities under this Section 5 shall survive the completion of any offering of
Registrable Securities pursuant to a registration statement under this
agreement, and otherwise.

        


                Section
6.   Covenants of the Company.  The Company hereby
agrees and covenants as follows:

        


                   (a)
The Company shall use its commercially reasonable efforts to file as and when
applicable, on a timely basis, all reports required to be filed by it under the
Exchange Act. If the Company is not required to file reports pursuant to the
Exchange Act, upon the request of any Holder of Registrable Securities, the
Company shall use its commercially reasonable efforts to make publicly available
the information specified in subparagraph (c)(2) of Rule 144. The Company shall
use its commercially reasonable efforts to take such further action as may be
reasonably required from time to time and as may be within the reasonable
control of the Company, to enable the Holders to Transfer Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 or any other exemption from registration. Upon
the request of any Holder of Registrable Securities, the Company will deliver to
such Holder a written statement as to whether it has complied with such
requirements and, if not, the specifics thereof.

         

        
          
             


          

          
            D-16

            
              

            

          

          
             


          

        

         

                   (b)
In connection with any sale, transfer or other disposition by a Holder of any
Registrable Securities pursuant to Rule 144, the Company shall cooperate
with such
Holder to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any Securities
Act legend, and enable certificates for such Registrable Securities to be for
such number of shares and registered in such names as the Holder may reasonably
request at least two Business Days prior to any sale of Registrable
Securities.

        


                   Section
7.   Miscellaneous.

        


                   (a)
Amendments and
Waivers.

        


               (i)
The provisions of this Agreement, including the provisions of this
Section 7(a), may not be amended, modified or supplemented, and waivers
or
consents to departures from the provisions hereof may not be given without
the
written consent of the Company and the Holders of a majority of the outstanding
Registrable Securities. Any amendment or waiver effected in accordance
with this paragraph shall be binding upon each Holder, each future Holder of
Registrable Securities, and the Company.

         

               (ii)
Notice of any amendment, modification or supplement to this Agreement
adopted in accordance with this Section 7 shall be provided by the Company
to the Holders prior to the effective date of such amendment, modification
or supplement.

         

                   (b)
Notices. All notices or other communications under this Agreement shall be
sufficient if in writing and delivered by hand or sent, postage prepaid by
registered, certified or express mail, or by recognized overnight air courier
service and shall be deemed given when so delivered by hand, or if mailed or
sent by overnight courier service, on the third Business Day after mailing (one
Business Day in the case of express mail or overnight courier service) to the
parties at the following addresses:

         

               (i)
if to the Initial Holders, to the addresses set forth under their signatures
on the signature page hereof and if to any other Holder to the address
contained in the records of the Company;

         

        
          
             


          

          
            D-17

            
              

            

          

          
             


          

        

         

               (ii)
if to the Company, to:

        


                                            Capital
Trust, Inc.

                                            410
Park Avenue,

                                            14th
Floor,

                                            New
York, New York 10022

                                            Attention:  John
R. Klopp

                                                                Chief
Executive Officer

        


                                            with
a copy to:

        


                                            Paul,
Hastings, Janofsky & Walker LLP

                                            75
East 55th Street

                                            New
York, New York  10022

                                            Attention:  Michael
L. Zuppone

         

        or at
such other address as the addressee may have furnished in writing
to the sender as provided herein.

         

                   (c)
Assignment.

         

               (i)
Except as expressly provided in this Section 7(c), the rights of the
parties hereto cannot be assigned and any purported assignment or transfer
to the contrary shall be void ab initio. So long as the terms of this
Section 7(c) are followed, any Holder may assign any of its rights under
this
Agreement, without the consent of the Company, to any Person to whom
such
holder Transfers any Registrable Securities or any rights to acquire
Registrable
Securities so long as such Transfer is not made pursuant to an effective
Registration Statement or pursuant to Rule 144 or Rule 145 (or any successor
provisions) under the Securities Act or in any other manner or to any
Person the effect or consequences of which is to cause the Transferred
securities
to be freely transferable without regard to the volume and manner of sale
limitations set forth in Rule 144 (or any successor provision) in the
hands of
the transferee as of the date of such Transfer.

         

               (ii)
Notwithstanding Section 7(c)(i), no Holder may assign any of its rights
under this Agreement to any Person to whom such Holder Transfers any
Registrable
Securities if the Transfer of such Registrable Securities requires
registration under the Securities Act.

         

        
          
             


          

          
            D-18

            
              

            

          

          
             


          

        

         

               (iii)
The nature and extent of any rights assigned shall be as agreed to
between the assigning party and the assignee. No Person may be assigned
any
rights under this Agreement unless (x) the Company is given written notice by
the assigning party at the time of such assignment stating the name and
address of the assignee, identifying the securities of the Company as to
which the
rights in question
are being assigned, and providing a detailed description of the
nature and extent of the rights that are being assigned and (y) and the
assignee
agrees in writing to be bound by and subject to the terms and conditions
of this Agreement, including, without limitation, the provisions of this
Section 7(c).

         

               (iv)
Notwithstanding the foregoing, Berkley may assign its rights, under
this Agreement without the prior written consent of the Company to one
or more
of its designated controlled Affiliates provided that Berkley remains
responsible
for the obligations under this Agreement with respect to such assignee.

        


                   (d)
Successors and Assigns; No Third Party Beneficiaries. This Agreement will be
binding upon and inure to the benefit of the parties hereto and their successors
and permitted assigns. Except as set forth herein and by operation of law, no
party to this Agreement may assign or delegate all or any portion of its rights,
obligations, or liabilities under this Agreement without the prior written
consent of the Company in the case of a Holder or without the written consent of
Holders holding a majority of Registrable Securities in the case of the Company.
Notwithstanding the foregoing, Berkley may assign its rights, obligations and
liabilities under this Agreement without the prior written consent of the
Company to one or more of its designated controlled Affiliates provided that
Berkley remains responsible for the obligations under this Agreement with
respect to such assignee. This Agreement shall not be construed so as to confer
any right or benefit upon any Person other than the parties hereto and their
respective successors and permitted assigns to the extent contemplated
herein.

        


                   (e)
Counterparts. This Agreement may be executed in any number of counterparts and
by the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

        


                   (f)
Headings. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.

         

                   (g)
GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICTS OF
LAW PRINCIPLES THEREOF.

        


                   (h)
Specific Performance; Costs and Expenses. The parties hereto acknowledge that
there would be no adequate remedy at law if any party fails to perform any of
its obligations hereunder, and accordingly agree that each party, in addition to
any other remedy to which it may be entitled at law or in equity, shall be
entitled to compel specific performance of the obligations of any other party
under this Agreement in accordance with the terms and conditions of this
Agreement in any court of the United States or any State thereof having
jurisdiction.

         

                   (i)
Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.

        


        
          
             


          

          
            D-19

            
              

            

          

          
             


          

        

         

                   IN
WITNESS WHEREOF, the undersigned Company has executed this Agreement as of the
date first written above.

        

          
            	 	CAPITAL TRUST, INC.	 
	 	 	 	 
	
                     

                  	
                    By: 

                  	/s/ John
      R. Klopp	 
	 	 	Name:  John
      R. Klopp	 
	 	 	Title:
         Chief Executive Officer	 
	 	 	 	 


          

        

         

        
          
             


          

          
            D-20

            
              

            

          

          
             


          

        

         

                   IN
WITNESS WHEREOF, the undersigned Berkley has executed this Agreement as of the
date first written above.

        


        
          
            	 	 	 
	 	 	 
	
                     

                  	/s/
      William R. Berkley	 
	 	Name:
      William R. Berkley	 
	 	Address:	 
	 	 	 


          

        

         

        
          
             


          

          
            D-21

            
              

            

          

          
             


          

        

         

        SCHEDULE
A

        


        Admiral
Insurance Company

        


        Berkley
Insurance Company

        


        Berkley
Regional Insurance Company

        


        Nautilus
Insurance Company

        


        
          
             


          

          
             


            
              

            

          

          
             


          

        

         

      

    

    SCHEDULE
A

     

    John R.
Klopp

     

    JRK
Investment Partnership LP

     

    Craig M.
Hatkoff

     

    CMH
Investment Partnership LP

     

    Veqtor
Finance Company L.L.C.

     

    Samstock,
L.L.C.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    SCHEDULE
B

     

    Admiral
Insurance Company

     

    Berkley
Insurance Company

     

    Berkley
Regional Insurance Company

     

    Nautilus
Insurance Company

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    SCHEDULE
5.6

     

    
      	1.	 	 	 	Authorized Capital
      Stock	 	    	Issued Capital
      Stock	 
	 	 	Class A Common
      Stock  	 	 	100,000,000	 	 	 	8,271,882	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	Preferred
      Stock 	 	 	100,000,000	 	 	 	0	 
	 	 	 	 	 	200,000,000	 	 	 	8,271,882	 
	 	 	 	 	 	 	 	 	 	 	 
	2.	 	Outstanding options
      issued under the Company’s incentive
      stock plan and director stock plan  	 	 	 	552,780	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	Outstanding stock
      units issued under the Company’s incentive
      stock plan and director stock plan	 	 	 	73,956	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	Shares which may be
      obtained upon conversion of convertible
      trust preferred securities issued by the Company’s
      subsidiary, CT Convertible Trust I  	 	 	 	4,273,422	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	Shares to be issued
      to John R. Klopp pursuant to the
      terms of his employment agreement, dated as
      of February 24, 2004    	 	 	 	218,818	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	Shares which may be
      issued upon exercise of the Warrant     	 	 	 	365,000	 
	 	 	 	 	 	 	 	 	 	 	 
	3.	 	The Company’s
      employment agreement, dated as of February 24, 2004, with John R. Klopp
      provides for various awards of restricted shares of Common Stock pursuant
      to the Company’s 2004 long-term incentive plan over the term of the
      agreement. 


    

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    SCHEDULE
5.11

     

    The
issuance of the Tranche 2 Shares contemplated by this Agreement requires the
affirmative vote of a majority of the votes cast at the Company’s 2004 annual
meeting of stockholders to be held on June 17, 2004 in accordance with the
applicable New York Stock Exchange rules.

     

    The
transactions contemplated by this Agreement require the listing of the Shares
pursuant to a subsequent listing application to be filed with and approved by
the New York Stock Exchange.

     

    The
transactions contemplated by this Agreement require the filing of the Prospectus
in the form delivered to the Purchaser with the Commission pursuant to Rule
424(b) under the Securities Act.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    SCHEDULE
5.19

     

    
      	
              Loans

            	 	
              3/31/04 Carrying Value

            	 
	 	 	 	 	 
	
              TriNational
      Baja Loan

            	 	$	3,037,733	 
	 	 	 	 	 
	
              Investments

            	 	 	 	 
	 	 	 	 	 
	
              ASC
      96-D2-B1B   CMBS   CUSIP#
      045424B43

            	 	$	4,000,000	 
	 	 	 	 	 
	
              RMF
      97-1-F   CMBS   CUSIP#
    749930AW3

            	 	$	3,127,785	 


    

     

    Management
currently believes that for both the loans and the investments listed on this
Schedule 5.19, the Company will realize at least the carrying value of the
assets as of March 31, 2004 as listed in this schedule.