Exhibit 10.2





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                       LIMITED LIABILITY COMPANY AGREEMENT

                                       OF

                           CT Mezzanine Partners I LLC

                      a Delaware limited liability company




                         Effective as of: March 8, 2000


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                                TABLE OF CONTENTS
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ARTICLE I                  DEFINED TERMS......................................1

         1.1.     Definitions.................................................1
         1.2.     General References..........................................6

ARTICLE II        FORMATION AND DURATION......................................6

         2.1.     Formation...................................................6
         2.2.     Name........................................................6
         2.3.     Agent and Office............................................6
         2.4.     Principal Place of Business.................................6
         2.5.     Qualification in Other Jurisdictions........................7
         2.6.     Term........................................................7
         2.7.     Intent......................................................7
         2.8.     Limited Liability...........................................7
         2.9.     Sale of Warrant.  ..........................................7

ARTICLE III       PURPOSE OF THE COMPANY......................................7

         3.1.     Purpose.....................................................7
         3.2.     Powers of the Company.......................................7
         3.3.     Limitations on Company Powers.  ............................8

ARTICLE IV        CAPITAL CONTRIBUTIONS.......................................9

         4.1.     Initial Contributions.......................................9
         4.2.     Additional Capital Contributions............................9
         4.3.     Loans by Members; Compensation.............................11

ARTICLE V         MANAGEMENT OF THE COMPANY..................................11

         5.1.     Management of the Company..................................11

ARTICLE VI        DISTRIBUTIONS AND ALLOCATION OF TAX ITEMS..................11

         6.1.     Distributions..............................................11
         6.2.     Allocation of Net Profits and Net Losses...................12
         6.3.     Withholding................................................12
         6.4.     Restoration of Funds.......................................12

ARTICLE VII       TAX ELECTIONS; TAX MATTERS MEMBER; TAX CAPITAL ACCOUNTS....12

         7.1.     Federal Income Tax Elections; Tax Matters Member...........12
         7.2.     Tax Matters................................................13

ARTICLE VIII      OTHER RIGHTS AND OBLIGATIONS OF MEMBERS....................13

         8.1.     Resignation of a Member....................................13
         8.2.     Admission of New Members...................................14
         8.3.     Indemnification by Company.................................14
         8.4.     Indemnification by Members.................................14

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         8.5.     Exculpation................................................14
         8.6.     Reimbursement of Members...................................15
         8.7.     Particular Covenants of Members............................15

ARTICLE IX        TRANSFERS OF COMPANY MEMBERSHIP INTERESTS..................15

         9.1.     Condition to Transfer of Any Membership Interest...........15
         9.2.     Transfers of Membership Interests..........................16
         9.3.     Purchase/Sale Option.......................................17

ARTICLE X         DISSOLUTION AND LIQUIDATION................................18

         10.1.    Dissolution................................................18
         10.2.    Winding up Affairs and Distribution of Assets..............18
         10.3.    No Liability...............................................19
         10.4.    Limitations on Payments Made in Dissolution................19
         10.5.    Certificate of Cancellation................................20

ARTICLE XI        DEFAULT AND REMEDIES.......................................20

         11.1.    Default....................................................20
         11.2.    Remedies Upon Event of Default.............................21
         11.3.    Dispute Resolution.  ......................................21
         11.4.    Waiver of Partition and Certain Other Rights...............21

ARTICLE XII       REPRESENTATIONS AND WARRANTIES OF THE MEMBERS..............22

         12.1.    Reciprocal Representations and Warranties..................22

ARTICLE XIII      BOOKS, RECORDS AND REPORTS.................................23

         13.1.    Maintenance of Books.......................................23
         13.2.    Records to be Maintained...................................23
         13.3.    Inspection by Members; Confidential Information............23
         13.4.    Books and Tax Reports......................................24

ARTICLE XIV       MISCELLANEOUS..............................................24

         14.1.    Notices....................................................24
         14.2.    Certificate Requirements...................................25
         14.3.    Modification...............................................25
         14.4.    Waivers and Consents.......................................26
         14.5.    Severability...............................................26
         14.6.    Further Assurances.........................................26
         14.7.    Governing Law..............................................26
         14.8.    Counterparts...............................................26
         14.9.    Limitation on Rights of Others.............................26
         14.10.   Brokers and Finders........................................26
         14.11.   Construction and Interpretation............................26
         14.12.   Successors And Assigns.....................................26
         14.13.   Survival...................................................26

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                       LIMITED LIABILITY COMPANY AGREEMENT
                         OF CT MEZZANINE PARTNERS I LLC


         This LIMITED LIABILITY COMPANY AGREEMENT ("Agreement") of CT MEZZANINE
PARTNERS I LLC (the "Company") is entered into this 8th day of March 2000,
between Travelers Limited Real Estate Mezzanine Investments I, LLC a Delaware
limited liability company ("Limited REMI I"), and CT-F1, LLC, a Delaware limited
liability company ("CT-F1"), as members of the Company.

                                    RECITALS
                                    --------


         WHEREAS, Limited REMI I and CT-F1 wish to engage jointly in the
Business (as defined herein);


         WHEREAS, Limited REMI I and certain of its Affiliates and CT-F1 and
certain of its Affiliates are parties to that certain Venture Agreement; dated
the date hereof (the "Venture Agreement") pursuant to which, among other things,
the parties or their Affiliates will co-sponsor, commit to invest capital in and
manage real estate mezzanine investment opportunity funds;


         WHEREAS, Limited REMI I and CT-F1 wish to form the Company in which
Limited REMI I and CT-F1 shall be the only Members and the only investors;


         NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the Members hereby agree as follows:

                                   ARTICLE I
                                  DEFINED TERMS

         1.1. Definitions. Unless the context otherwise requires, the following
terms shall have the following meanings:

                  "Additional Capital Contributions" means the additional
capital contributions made by the Members pursuant to, and determined in
accordance with, Section 4.2(a).

                  "Additional Payment" has the meaning specified in Section
4.2(a) hereof.

                  "Affiliate" means, with respect to any Person, a Person which
directly or indirectly controls, or is controlled by, or is under common control
with that Person, or is controlled by a principal executive officer of that
Person. As used in this definition, "control" means possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting interests, by
contract or otherwise.

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         "Agreement" means this Limited Liability Company Agreement of the
Company.

         "Annual Operating Budget" means, collectively, with respect to each
Fiscal Year of the Company any annual operating budget, working capital budget,
marketing budget and expenditures relating to the operation of the Company
approved by the Members. The Annual Operating Budget shall be prepared in
accordance with GAAP and approved by the Members and shall show the estimated
receipts, expenditures (operating and capital) and reserves of the Company for
the subject Fiscal Year. "Annual Operating Budget" also includes all subsequent
amendments and revisions to the foregoing approved by the Members.

         "Bankruptcy" of a Person means the institution of any proceedings under
any federal or state law for the relief of debtors, including the filing by or
against that Person of a voluntary or involuntary case under the United States
Bankruptcy Code, which proceedings, if involuntary, are not dismissed within
sixty (60) days after their filing; an assignment of the property of that Person
for the benefit of creditors; the appointment of a receiver, trustee or
conservator of any substantial portion of the assets of that Person, which
appointment, if obtained ex parte, is not dismissed within sixty (60) days
thereafter; the seizure by a sheriff, receiver, trustee or conservator of any
substantial portion of the assets of that Person; the failure by that Person
generally to pay its debts as they become due within the meaning of Section
303(h)(1) of the United States Bankruptcy Code, as determined by the Bankruptcy
Court; or that Person's admission in writing of its inability to pay its debts
as they become due.

         "Business" shall have the meaning given to such term in the Venture
Agreement.

         "Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in New York, New York are authorized or required by
applicable law to close.

         "Calculation Date" means, for purposes of computing Net Cash Flow to be
distributed with respect to a particular fiscal quarter, the last day in that
quarter.

         "Candidate Transaction" shall have the meaning specified in Section
4.2(b) hereof.

         "Candidate Transaction Notice" shall have the meaning specified in
Section 4.2(b) hereof.

         "Candidate Transaction Notice Period" shall have the meaning specified
in Section 4.2(b) hereof.

         "Capital Account" of a Member with respect to the Company means the
capital account of that Member which, except as otherwise provided herein, shall
be determined from the inception of the Company in accordance with GAAP. The
initial Capital Account of each Member is set forth on Exhibit "A".

         "Capital Contributions" of a Member at anytime means, as of a
particular date, the aggregate amount of money and the Fair Market Value of any
property (other than money), net of encumbrances, theretofore contributed to the
Company by that Member pursuant to this

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Agreement, which shall consist of the Member's Initial Capital Contribution and
any Additional Capital Contribution made by the Member.

         "Certificate of Formation" means the Certificate of Formation of the
Company filed on behalf of the Company with the office of the Secretary of State
of the State of Delaware pursuant to the Delaware Act.

         "Code" means the Internal Revenue Code of 1986, as amended.

         "Company" means CT Mezzanine Partners I LLC, the limited liability
company formed and existing under and pursuant to the Delaware Act, the
Certificate of Formation and this Agreement.

         "Contribution Date" means the date which is specified in a call for
Additional Payment.

         "CT-F1" shall have the meaning given to such term in the Preamble to
this Agreement.

         "Default" has the meaning specified in Section 11.1(a) hereof.

         "Defaulting Member" has the meaning specified in Section 11.1(b)
hereof.

         "Delaware Act" means the Delaware Limited Liability Company Act, 6 Del.
C.ss. 18-101, et seq.

         "Distribution" means the transfer of money or property by the Company
to one or more Members, in their capacity as Members, without separate
consideration.

         "Effective Date" means March 8, 2000.

         "Event of Default" has the meaning specified in Sections 11.1(c)
hereof.

         "Fair Market Value" of an asset means the price at which that asset
would be sold between a willing buyer and a willing seller, each having
reasonable knowledge of all relevant facts concerning the asset and neither
acting under any compulsion to buy or sell the assets, as agreed upon by the
Members or if the Members cannot agree within thirty (30) days, the price
determined pursuant to Section 4.1(b) of the Venture Agreement.

         "Fiscal Year" means the calendar year.

         "Fund I Investment Management Agreement" means that certain management
agreement by and between the Investment Manager and the Company, dated the date
hereof.

         "GAAP" means generally accepted accounting principles in effect from
time to time in the United States, applied on a consistent basis throughout the
term of this Agreement.

         "Indemnitee" has the meaning specified in Section 8.3 hereof.

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         "Initial Capital Contribution" of a Member means the capital
contributions made by that Member pursuant to Section 4.1 hereof.

         "Investment Management Fee" means the fee that the Investment Manager
is entitled to receive pursuant to the Fund I Investment Management Agreement.

         "Investment Manager" shall mean CT Investment Management Co., LLC, a
Delaware limited liability Company.

         "Investment Period" means the period, commencing on the date hereof,
during which the Company may make new Investments and ending on the earlier of
(i) the Fund II Initial Closing (as defined in the Venture Agreement), (ii) the
date on which either CT-F1 or Limited REMI I shall have given notice to the
other of its exercise of the Unwind Right pursuant to Section 11.2 hereof, or
(iii) notice from one party to the other, which notice may not be given earlier
than December 31, 2000, subject to exercise of the Extension Right (as defined
in the Venture Agreement).

         "Key Individuals" shall have the meaning specified in the Venture
Agreement.

         "Key Individuals Requirement" shall mean the Investment Manager's
covenants under Section 1.3 of the Fund I Investment Management Agreement.

         "Investments" shall have the meaning specified in Section 4.2(b)
hereof.

         "Member" means each of Limited REMI I and CT-F1 and includes any Person
admitted as a Substitute Member pursuant to the provisions of this Agreement, in
such Person's capacity as a member of the Company; "Members" means two (2) or
more of such Persons when acting in their capacities as members of the Company.
For purposes of the Delaware Act, the Members shall constitute one (1) class or
group of members.

         "Membership Interest" means a Member's total interest as a Member of
the Company, including that Member's rights to allocations of Net Profits, Net
Losses, special allocations, Net Cash Flow and other Distributions, its right to
inspect the books and records of the Company and its right, to the extent
specifically provided in this Agreement or in the Delaware Act and not otherwise
restricted herein, to participate in the business, affairs and management of the
Company and to vote or grant consent with respect to matters coming before the
Company.

         "Net Cash Flow" has the meaning specified in Section 6.1(a) hereof.

         "Net Profits" and "Net Losses" means, for each fiscal period, the net
income and net loss, respectively, of the Company determined in accordance with
GAAP.

         "Nonrecourse Exception Indemnitee" has the meaning specified in Section
8.4 hereof.

         "Notice of Default" has the meaning specified in Section 11.1(b)
hereof.

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         "Notices" has the meaning specified in Section 14.1(a) hereof.

         "Percentage Interest" of a Member means 75% in the case of Limited REMI
I and 25% in the case of CT-F1.

         "Person" means any entity, corporation, company, association, joint
venture, joint stock company, partnership, trust, limited liability company,
limited liability partnership, real estate investment trust, organization,
individual, nation, state, government (including agencies, departments, bureaus,
boards, divisions and instrumentalities thereof), trustee, receiver or
liquidator.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Substitute Member" means a Person who is admitted to the Company as a
Member pursuant to Article IX.

         "Tax Matters Member" means the "tax matters partner" referred to in
Section 6231(a)(7) of the Code.

         "Transfer" of all or any portion of a Membership Interest means any
direct or indirect sale, assignment, gift, hypothecation, pledge or other
disposition, whether voluntary, involuntary or by operation of law, of all or
any portion of a Membership Interest, including, without limitation, the right
to receive Distributions from the Company. Notwithstanding that a Transfer of
all or any portion of a Membership Interest by way of hypothecation or pledge
has occurred, any subsequent transfer, sale or other disposition of such
Membership Interest or portion thereof at foreclosure shall also constitute a
separate Transfer hereunder and shall also be subject to all of the provisions
of this Agreement.

         "Treasury Regulations" means the income tax regulations, including
temporary regulations, promulgated under the Code.

         "Unwind" means the division of assets and procedures set forth in
Section 11.2 hereof.

         "Unwind Right" shall have the meaning set forth in the Venture
Agreement.

         "Venture Agreement" shall have the meaning set forth in the Whereas
clauses.

         "Warrant" means the warrant to purchase up to 4,250,000 shares of class
A common stock, $.01 par value per share, of Capital Trust, Inc., a Maryland
corporation, which the parties agree have a Fair Market Value of $.32 per share.

         "Warrant Purchase Agreement" means the agreement between the Company
and Limited REMI I in the form attached as Exhibit S to the Venture Agreement.

         "Warrant Purchase Note" means the promissory note issued by Limited
REMI I to purchase the Warrant, which is in the form of Exhibit D to the Venture
Agreement.

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         1.2. General References. References in this Agreement to "Articles,"
"Sections," "Exhibits" and "Schedules" shall be to the Articles, Sections,
Exhibits and Schedules of this Agreement, unless otherwise specifically
provided; the term "including" means "including without limitation"; any of the
terms defined in this Agreement may, unless the context otherwise requires, be
used in the singular or the plural and in any gender depending on the reference;
the words "herein", "hereof" and "hereunder" and words of similar import, when
used in this Agreement, shall refer to this Agreement as a whole and not to any
particular provision of this Agreement; and except as otherwise specified in
this Agreement, all references in this Agreement (a) to any Person shall be
deemed to include such Person's permitted heirs, personal representatives,
successors and assigns; and (b) to any agreement, any document, certificate or
any other written instrument shall be a reference to such agreement, document,
certificate or instrument together with all exhibits, schedules, attachments and
appendices thereto, and in each case as amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms thereof; and
(c) to any law, statute or regulation shall be deemed references to such law,
statute or regulation as the same may be supplemented, amended, consolidated,
superseded or modified from time to time with an effective date rendering such
change applicable to the event or transaction in question.

                                   ARTICLE II
                             FORMATION AND DURATION

         2.1. Formation.

              (a) Formation. Unless expressly provided otherwise in this
Agreement, the rights, duties and liabilities of the Members of the Company
shall be as provided in the Delaware Act. The Company has been organized as a
Delaware limited liability company under the Delaware Act by the filing of the
Certificate of Formation on February 24, 2000 with the Secretary of State of the
State of Delaware.

              (b) Information as to Members. As of the Effective Date, the name
of each Member shall be as listed in Exhibit "A". The Members shall be required
to update Exhibit "A" from time to time as necessary to reflect accurately any
changes in the Members. Any amendment or revision to Exhibit "A" made in
accordance with this Agreement shall not be deemed an amendment to this
Agreement.

         2.2. Name. The name of the Company is CT Mezzanine Partners I LLC.
However, the business of the Company may be conducted under any other name
designated by the Members from time to time.

         2.3. Agent and Office. The Company's registered agent and office in
Delaware shall be United Corporate Services, 15 East North Street, Dover, County
of Kent, Delaware 19901. At any time, the Members may designate another
registered agent and/or registered office.

         2.4. Principal Place of Business. The principal place of business of
the Company shall be at the CT offices currently located at 605 Third Avenue,
26th Floor, New York, New York, 10016, or at such other place as the Members may
determine from time to time.



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         2.5. Qualification in Other Jurisdictions. The Members shall cause the
Company to be qualified or registered (a) as a foreign limited liability company
under the provisions of the New York Act, and shall cause such status to be
maintained for so long as the Company owns any real property, or otherwise
transacts business, in the State of New York, and (b) under the assumed or
fictitious name statutes or similar laws in the State of New York and in any
other jurisdiction in which the Company transacts business. The Company shall
execute, deliver and file any certificates (and any amendments and/or
restatements thereof) necessary for the Company to qualify to do business in the
State of New York or in any other jurisdiction in which the Company may wish to
conduct business.

         2.6. Term. The term of the Company commenced on the date the
Certificate of Formation was filed in the office of the Delaware Secretary of
State and shall continue until the cancellation of the Certificate of Formation
in the manner required by the Delaware Act.

         2.7. Intent. It is the intent of the Members that the Company be
operated in a manner consistent with its treatment as a "partnership" for
Federal and state income tax purposes. It also is the intent of the Members that
the Company not be operated or treated as a "partnership" for purposes of
Section 303 of the United States Bankruptcy Code. No Member shall take any
action inconsistent with that express intent.

         2.8. Limited Liability. Except as otherwise provided in the Delaware
Act, the debts, obligations and liabilities of the Company (whether arising in
contract, tort or otherwise) shall be solely the debts, obligations and
liabilities of the Company, and no Member (including the Tax Matters Member
acting in such capacity and any Person who formerly held such status) shall be
liable or shall be obligated personally for any such debt, obligation or
liability of the Company solely by reason of that status. No individual trustee,
officer, director, shareholder, member, manager, constituent partner, employee,
agent or attorney of any entity Member, in his, her or its individual capacity
as such, shall have any personal liability for the performance of any obligation
of that Member under this Agreement.

         2.9. Sale of Warrant. On the Effective Date, the Company shall sell the
Warrant to Limited REMI I pursuant to the Warrant Purchase Agreement in exchange
for the Warrant Purchase Note.

                                   ARTICLE III
                             PURPOSE OF THE COMPANY

         3.1. Purpose. The Company is formed for the object and purpose of
conducting the Business. The Company may engage in all activities reasonably
deemed incidental or convenient to the foregoing.

         3.2. Powers of the Company. The Company shall have the power and
authority to take any and all actions necessary, convenient, desirable or
incidental to the purpose set forth in Section 3.1, including, without
limitation, the power:

              (a) to conduct its business, carry on its operations, open bank
accounts and brokerage accounts and have and exercise the powers granted to a
limited liability company by the Delaware Act in the State of New York or in any
other state, territory, district or possession



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of the United States, or any foreign country that may be necessary, convenient
or incidental to the accomplishment of the purpose of the Company;

              (b) to enter into, perform and carry out contracts of any kind,
including, without limitation, contracts with any Member and/or Affiliate
thereof (if approved by the other Member) or any agent of the Company necessary,
convenient, desirable or incidental to the accomplishment of the purpose of the
Company;

              (c) to sue and be sued, complain and defend and participate in
administrative or other proceedings, in its name;

              (d) to appoint officers, employees and agents of the Company,
define their duties and fix their compensation, if any;

              (e) to indemnify any Person in accordance with the Delaware Act
and to obtain any and all types of insurance;

              (f) to cease its activities and cancel its Certificate of
Formation;

              (g) to negotiate, enter into, renegotiate, extend, renew,
terminate, modify, amend, waive, execute, acknowledge or take any other action
with respect to any contract, agreement, deed of trust, mortgage, loan agreement
or other loan document or security agreement;

              (h) to borrow money and issue evidences of indebtedness, and to
secure the same by a mortgage, deed of trust, security agreement, pledge,
collateral assignment, or other lien on the assets of the Company;

              (i) to pay, collect, compromise, litigate, arbitrate or otherwise
adjust or settle any and all other claims or demands of or against the Company
or to hold such proceeds against the payment of contingent liabilities;

              (j) to make, execute, acknowledge and file any and all documents
or instruments necessary, convenient, desirable or incidental to the
accomplishment of the purpose of the Company; and

              (k) to sell Company assets to Members in exchange for cash or a
promissory note, including to sell the Warrant to Limited REMI I pursuant to the
Warrant Purchase Agreement in exchange for the Warrant Purchase Note.

         3.3. Limitations on Company Powers. Notwithstanding Sections 3.1 and
3.2, the Company shall not do business in any jurisdiction the laws of which do
not give full faith and credit to the limitations on liability afforded to the
Members under the Delaware Act or this Agreement.


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                                   ARTICLE IV
                             CAPITAL CONTRIBUTIONS

         4.1. Initial Contributions. As at the Effective Date, Limited REMI I
contributed $75 and CT-F1 contributed $25 and the Warrant to the capital of the
Company.

         4.2. Additional Capital Contributions.

              (a) Additional Payment. Each Member shall be required to make such
additional payments ("Additional Payments") to the Company in cash upon the
terms and conditions, at the times and in the amounts as set forth in this
Section 4.2. No Member shall be required to make any further payments to the
Company during the term of this Agreement except as specifically required in
this Agreement. In the event that further funds are required by the Company to
(i) pay the expenses of the Company in accordance with Section 4.2(c) in excess
of the funds available from (a) the Members' Initial Capital Contributions and
any prior contributions of Additional Payments, and (b) the Net Cash Flows, or
(ii) to invest in a Candidate Transaction in accordance with the terms and
conditions of this Section 4.2, then the Members shall make Additional Payments
in cash to pay those obligations as set forth herein. Any Additional Payment by
Limited REMI I shall first be applied to repay the Warrant Purchase Note. Once
the Warrant Purchase Note is repaid any Additional Payment by Limited REMI I
shall constitute an Additional Capital Contribution. Any Additional Payment by
CT-F1 shall constitute an Additional Capital Contribution. Additional Payments
shall be made by the Members in accordance with the provisions of Section 4.2(d)
hereof. Notwithstanding anything herein to the contrary, Limited REMI I shall
not be required to make Additional Payments to the Company in excess of
$150,000,000 in the aggregate and CT-F1 shall not be required to make Additional
Payments to the Company in excess of $50,000,000 in the aggregate. If both
Members make their Capital Contributions as required, any Additional Capital
Contribution shall be credited to the Capital Accounts in the ratio of 75% to
Limited REMI I and 25% to CT-F1.

              (b) Candidate Transactions. At all times during the Investment
Period, the Company shall have a priority right to consummate for the benefit of
the Company all Business transactions sourced by CT-F1 and any of its Affiliates
to the extent and in the manner provided in this Section 4.2(b). If at any time
during the Investment Period CT-F1 or any of its Affiliates shall become aware
of a Business transaction which it determines is appropriate for the Company
("Candidate Transaction"), CT-F1 shall deliver notice thereof to Limited REMI I
setting forth, to the extent known, all material terms and conditions of the
Candidate Transaction (including, (i) the estimated amount of each Member's
Capital Contribution necessary to fund the Company's equity component of such
Candidate Transaction and related expenses (the "Equity Component"), (ii) the
anticipated date on which the Members would be required to make Additional
Payments to the Company to fund such Equity Component, and (iii) the debt
component, if any of such Candidate Transaction) and shall include a preliminary
due diligence package containing all due diligence materials then in the
possession of CT-F1 (a "Candidate Transaction Notice"). Limited REMI I shall
have two (2) Business Days from the date of its receipt of such Candidate
Transaction Notice during which it shall have the right in its sole discretion
to require additional due diligence materials, which Limited REMI I shall
specify on a supplemental due diligence request. Within five (5) Business Days
of Limited REMI I's receipt of all the requested due diligence materials (the
"Candidate Transaction Notice Period"), Limited


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REMI I shall notify CT-F1 whether or not it is electing to participate in the
Candidate Transaction (a "Candidate Transaction Acceptance" or a "Candidate
Transaction Rejection", as the case may be). If Limited REMI I shall fail to
deliver either a Candidate Transaction Acceptance or a Candidate Transaction
Rejection within the Candidate Transaction Notice Period, it shall be deemed to
have delivered a Candidate Transaction Rejection as at the close of business on
the last Business Day of the Candidate Transaction Notice Period. If Limited
REMI I shall have delivered or shall have been deemed to have delivered a
Candidate Transaction Rejection, CT-F1 shall have the right, independent of the
Company, to pursue and conclude such Candidate Transaction on substantially the
same terms and conditions as those set forth in the Candidate Transaction
Notice. If Limited REMI I shall have delivered to CT-F1 a Candidate Transaction
Acceptance within the Candidate Transaction Notice Period and if CT-F1
determines that the Company should conclude such Candidate Transaction, then
both Limited REMI I and CT-F1 shall be obligated to make Additional Payments to
the Company to permit the Company to fund the Equity Component of the Candidate
Transaction in accordance with the provisions of Section 4.2(d) hereof. If
Limited REMI I delivers a Candidate Transaction Acceptance with respect to a
Candidate Transaction and CT-F1 later determines that the Company should not
pursue and conclude such Candidate Transaction, CT-F1 may not later pursue or
conclude such Candidate Transaction independent of the Company without first
making such Candidate Transaction available to the Company pursuant to this
Section 4.2(b). Candidate Transactions with respect to which Limited REMI I
shall have delivered a Candidate Transaction Acceptance to CT-F1 and which have
been consummated are herein referred to as "Investments." Additional Payments to
the Company pursuant to a Candidate Transaction Acceptance and in accordance
with Section 4.2(d) hereof which Candidate Transaction is ultimately not
consummated shall be returned to the Members who made the Additional Payments,
without interest, net of related expenses, promptly after such time as the
Members shall have determined that such Candidate Transaction will not close,
and all entries on the Company's books and records resulting from such
Additional Payments shall be reversed as if such Additional Payments were never
made.

              (c) Expenses. Each Member shall make Additional Payments to the
Company from time to time sufficient to fund (i) the Investment Management Fee,
(ii) expenses payable by the Company as set forth in Section 2.3 of the Fund I
Investment Management Agreement, (iii) expenses incurred by the Company in the
ordinary course of its business, (but in no event exceeding $50,000 in any
Fiscal Year), or as otherwise set forth in the Annual Operating Budget, (iv)
expenses approved by the Members and (v) expenses otherwise required by this
Agreement. All such Additional Payments shall be made in accordance with the
provisions of Section 4.2(d) hereof. Expenses incurred by CT-F1 with respect to
a Candidate Transaction with respect to which Limited REMI I shall have given,
or shall be deemed to have given, a Candidate Transaction Rejection, shall be
borne by CT-F1 and not by the Company or Limited REMI I unless such expense was
specifically approved by Limited REMI I prior to the expenditure in which case
it shall be borne by the Company.

              (d) Call Procedures; Payment of Call. Whenever the Members are
required to make Additional Payments to the Company as provided in this Section
4.2, each Member shall be obligated to contribute its share of the requested
Additional Payment in cash in an amount equal to (a) that Member's Percentage
Interest multiplied by (b) the aggregate dollar amount of the requested
Additional Payment. To satisfy any call for Additional Payment, a Member shall


                                       10
<PAGE>




cause to be paid to the Company, by the date specified by the Investment
Manager, which date shall be the "Contribution Date," in immediately available
funds in the full amount of such Member's share of the requested Additional
Payment.

         4.3. Loans by Members; Compensation. No Member shall be required to
lend any funds to the Company, and no Member shall have any personal liability
for the repayment of any Capital Contribution of any other Member. No Member
shall receive any interest, salary or drawing with respect to its Capital
Contributions or its Capital Account or for services rendered on behalf of the
Company or otherwise in its capacity as a Member, except as otherwise provided
in this Agreement.

                                   ARTICLE V
                           MANAGEMENT OF THE COMPANY

         5.1. Management of the Company. The business and affairs of the Company
shall be managed by the Members, except to the extent that such management is
delegated to the Investment Manager pursuant to the Fund I Investment Management
Agreement. No decision of the Company may be made or action of the Company taken
without the consent of all the Members, which decisions may be made at a meeting
of the Members or pursuant to written consent. Members may participate in and
hold meetings by means of telephone or similar communications equipment, by
means of which all Persons participating in the meeting can hear each other. As
soon as practicable after the Effective Date, the Members will prepare an Annual
Operating Budget for the first Fiscal Year of the Company. Notwithstanding the
foregoing, the enforcement of any rights that the Company may have against any
Member (or Affiliate of a Member) shall be determined solely by the other
Member.

                                   ARTICLE VI
                   DISTRIBUTIONS AND ALLOCATION OF TAX ITEMS

         6.1. Distributions.

              (a) Net Cash Flow. Not later than ten (10) days after the
applicable Calculation Date, the Members shall determine the amount of cash, if
any, which in their judgment is in excess of amounts necessary or appropriate
for operations, expenses and reserves of the Company. Such excess (the "Net Cash
Flow") shall, as soon as possible following the applicable Calculation Date, but
in no event later than three (3) Business Days following the determination of
Net Cash Flow, be distributed to the Members in accordance with this Section
6.1(a). The Net Cash Flow of the Company shall not be reduced by depreciation,
amortization, cost recovery deductions, depletion, similar allowances or other
noncash items, but shall be increased by any release or reduction of reserves
previously established (other than for the payment of expenses reserved
against). The Net Cash Flow of the Company shall be calculated effective as of
the applicable Calculation Date with respect to which the Net Cash Flow is being
distributed, regardless of the actual date of distribution. Distributions of Net
Cash Flow shall be made in accordance with a Member's respective Percentage
Interest. Notwithstanding anything herein to the contrary, no Distributions
(other than Distributions pursuant to Section 10.2) may be made by the Company
after a Notice of Default has been given pursuant to Section 11.1


                                       11
<PAGE>




hereof unless the Default to which the Notice of Default relates has been cured
as set forth in Section 11.1(c) hereof, or as the Members may otherwise agree.

              (b) Withdrawal of Capital; Limitation on Distributions. No Member
shall be entitled to withdraw any part of its Capital Contributions to, or to
receive any Distributions from, the Company except as provided in Sections
6.1(a) and 10.2. No Member shall be entitled to demand or receive interest on
its Capital Contributions or, except as set forth in Article X hereof, any
property from the Company other than cash.

         6.2. Allocation of Net Profits and Net Losses. Net Profits and Net
Losses shall be allocated in accordance with each Member's Percentage Interest.

         6.3. Withholding. Should the Company be required, pursuant to the Code,
the laws of any state or any other provision of law, to withhold any amount from
amounts otherwise distributable to any Member or on the basis of income
allocable to any Member, the Company shall withhold those amounts, and any
amounts so withheld shall be deemed to have been distributed to that Member
under this Agreement. If any sums are withheld pursuant to this provision, the
Company shall remit the sums so withheld to, and file the required forms with,
the Internal Revenue Service, the appropriate authority of any such state or
other applicable government agency. In the event of any claimed
over-withholding, if such claimed over-withholding was made by the Company in
good faith upon the advice of its tax advisors, a Member shall be limited to an
action against the Internal Revenue Service, the appropriate authority of any
such state or other applicable government agency for refund, and each Member
hereby waives any claim or right of action against the Company on account of
such withholding. Furthermore, if the amounts required to be withheld exceed the
amounts which would otherwise have been distributed to a Member, the Member
shall contribute any deficiency to the Company within ten (10) Business Days
after notice from the Company. If the deficiency is not contributed within that
time, such failure shall be considered a demand loan from the Company to that
Member, with interest at a rate equal to the lesser of fifteen percent (15%) or
the highest rate permitted by law, which interest shall be treated as an item of
Company income and accrue until discharged by the Member by repayment. Such
demand loan shall be repaid in full within ten (10) Business Days after demand
(and for this purpose any Member other than the Member on whose account such
loan was made may unilaterally make such demand for and on behalf of the
Company), and otherwise shall be repaid, without prejudice to any other remedies
at law or in equity that the Company may have, out of Distributions to which the
debtor Member would otherwise subsequently be entitled under this Agreement.

         6.4. Restoration of Funds. Except as otherwise provided by law, no
Member shall be required to restore to the Company any funds properly
distributed to it pursuant to Section 6.1 or 10.2. If any Member receives
Distributions from the Company contrary to the provisions of this Agreement,
that Member shall promptly return the same to the Company.

                                   ARTICLE VII
            TAX ELECTIONS; TAX MATTERS MEMBER; TAX CAPITAL ACCOUNTS

         7.1. Federal Income Tax Elections; Tax Matters Member.


                                       12
<PAGE>




         (a) Tax Elections. The Members shall determine all elections to be made
by the Company for tax purposes.

         (b) Tax Matters Member. Limited REMI I is hereby designated the Tax
Matters Member. The Tax Matters Member will take no action (other than
ministerial action) without the prior approval of the Members. The Tax Matters
Member will not be required to take any action or incur any expenses for the
prosecution of any administrative or judicial remedies in its capacity as Tax
Matters Member unless the Members agree on a method of sharing expenses incurred
in connection with the prosecution of such remedies.

         7.2. Tax Matters.

              (a) The Company shall maintain a capital account for each Member
in accordance with the rules set forth in Treasury Regulation Section
1.704-1(b)(2)(iv). In the event an asset of the Company other than cash is
distributed in kind to a Member, such capital accounts shall be adjusted for the
hypothetical "book" gain or loss that would have been realized by the Company if
the distributed asset had been sold for its Fair Market Value in a cash sale (in
order to reflect unrealized gain or loss).

              (b) For tax capital account maintenance purposes, except as
otherwise required by Section 704(c) of the Code,

                   (i) if the Company is dissolved pursuant to Section 10.1
during a Fiscal Year, gross income and/or deductions of the Company for such
Fiscal Year and each Fiscal Year thereafter shall be first allocated to the
Members in the amount necessary to cause the tax capital account of each Member
to be equal to its Capital Account;

                   (ii) if the Company is required to recognize any interest
income pursuant to Section 483 or Sections 1271 through 1288 of the Code in
connection with any transaction with a Member or any loss with respect to the
transfer of the Warrants to a Member, such interest income or loss shall be
specially allocated to such Member for tax purposes; and

                   (iii) Net income or loss as determined for purposes of
Section 704(b) of the Code, as adjusted by the amount, if any, specially
allocated pursuant to clause (i) or (ii) above shall be allocated in accordance
with Section 6.2.

              (c) For income tax purposes, income, gain loss, and deduction
shall be allocated in accordance with the corresponding item under Section
7.2(b), except as otherwise required by Section 704(c) of the Code.

                                  ARTICLE VIII
                    OTHER RIGHTS AND OBLIGATIONS OF MEMBERS

         8.1. Resignation of a Member. No Member may withdraw or resign from the
Company without the consent of the Members, which consent may be given or
withheld in their absolute discretion. In the event of any withdrawal or
resignation in violation of this Section 8.1, such withdrawal or resignation
shall be void ab initio, and the withdrawing or resigning Member shall be
subject to any and all remedies available to the Company or the Members under
this


                                       13
<PAGE>




Agreement, at law or in equity in respect of such default, and the Company
shall have the right to offset the damages against any amounts otherwise
distributable to the withdrawing or resigning Member. Termination of a Member's
Membership Interest upon consummation of a right to purchase under Sections 9.3
or 9.4 shall not be deemed a withdrawal or resignation in violation of this
Section 8.1.

         8.2. Admission of New Members. Other than Members that may be admitted
to the Company pursuant to Section 9.2(b), no new or additional Members may be
admitted to the Company without the written consent of the Members.

         8.3. Indemnification by Company. To the maximum extent permitted by
law, the Company shall defend, indemnify and hold harmless each Member and its
partners, shareholders and members, and their respective directors, officers,
employees and shareholders and the Investment Manager (each such Person being an
"Indemnitee") from and against any and all liabilities, losses, claims,
judgments, fines, settlements and damages incurred by the Indemnitee or by the
Company, arising out of any claim based upon any acts performed or omitted to be
performed by the Indemnitee in connection with the organization, management,
business or property of the Company (including in any Member's capacity as Tax
Matters Member), including costs, expenses and attorneys' fees (which may be
paid as incurred) expended in the settlement or defense of any such claims,
except to the extent that the claim giving rise to such indemnification rights:
(a) arises out of any gross negligence (which for purposes of this Agreement
shall mean an act or failure to act with reckless disregard of the consequences
thereof), willful misconduct, breach of fiduciary duty or a material breach of
this Agreement by the Indemnitee; or (b) is governed by Section 8.4. Except as
required by Section 8.4, all judgments against the Company and/or an Indemnitee
wherein an Indemnitee is entitled to indemnification or other amounts payable to
an Indemnitee pursuant to this Section 8.3 shall be satisfied only from the
assets of the Company.

         8.4. Indemnification by Members. To the maximum extent permitted by
law, each Member shall defend, indemnify and hold harmless the Company and the
other Members and each of their respective directors, officers, employees,
partners and shareholders (each such Person being a "Nonrecourse Exception
Indemnitee") from and against any and all liabilities, losses, claims,
judgments, fines, settlements and damages, and any costs and expenses (including
attorneys' fees and disbursements) incurred in connection therewith, suffered or
incurred by any Nonrecourse Exception Indemnitee or arising out of any claim
that the Company or any Nonrecourse Exception Indemnitee is liable under any
exceptions or "carve-outs" to any nonrecourse provisions in any loan documents
entered into by the Company to the extent (a) such liability is attributable to
any gross negligence, willful misconduct, breach of fiduciary duty or material
breach of this Agreement by the indemnifying Member or any of its Affiliates,
shareholders, members, partners, officers, directors, employees or agents,
whether on behalf of the Company or otherwise, in violation of the requirements
of any such loan documents (unless the Members agree to violate such loan
document requirements) and (b) such liability exceeds any economic benefit
received by the Nonrecourse Exception Indemnitee as a direct result of the
breach, act or omission giving rise to the claim.

         8.5. Exculpation. Except to the extent required by law, neither the
Members nor any of their respective directors, officers, employees or
shareholders shall be liable or responsible to


                                       14
<PAGE>




the Company or the other Members for any act or failure to act, or any loss,
liability, damage, settlement cost or other expense incurred by reason of any
act or failure to act, of any such Person, provided such Person acted in good
faith and in a manner reasonably believed to be in, or not opposed to, the
interests of the Company, except to the extent such loss, liability, damage,
settlement cost or other expense resulted from the gross negligence, willful
misconduct, breach of fiduciary duty or material breach of this Agreement by
such Person. The termination of any action, suit or proceeding by judgment,
order or settlement shall not, of itself, create a presumption that a Person did
not act in good faith and in a manner reasonably believed to be in, or not
opposed to, the best interests of the Company. Furthermore, no Affiliate of a
Member shall be entitled to exculpation hereunder in respect of any act or
omission committed or omitted in its capacity as an independent contractor to
the Company, but, rather, the terms of the contract between such Affiliate and
the Company shall control with respect to exculpation.

         8.6. Reimbursement of Members. Each of the Members, including, the Tax
Matters Member acting in such capacity, shall be entitled to reimbursement from
the Company for out-of-pocket expenses reasonably, properly and directly
incurred by such Member on behalf of the Company and provided for in an Annual
Operating Budget; provided, however, that no Member shall seek reimbursement
from the Company for any "overhead" or general and administrative expenses
incurred by that Member.

         8.7. Particular Covenants of Members.

              (a) Defend Against Creditors. Each Member shall defend at its sole
cost and expense any claim made against its Membership Interest (including its
right to Distributions from the Company) resulting from the personal
indebtedness of that Member or the claims of its individual creditors.

              (b) Notice of Claims. Each Member shall promptly notify the other
Members as to any claims asserted or threatened against its Membership Interest
(including its right to Distributions from the Company).

                                   ARTICLE IX
                    TRANSFERS OF COMPANY MEMBERSHIP INTERESTS

         9.1. Condition to Transfer of Any Membership Interest. Without limiting
any other provisions of this Article IX, no Transfer of a Membership Interest
may be made unless all of the following requirements are satisfied, and any
purported Transfer of a Membership Interest failing to meet the following
requirements shall be void ab initio:

              (a) Required Documents. The transferee executes and delivers to
the Company an instrument pursuant to which it agrees to be bound by the terms
of this Agreement, and such additional instruments and documents as shall be
reasonably required by the Members (including opinions of counsel to any
transferor satisfactory to the Members with respect to the matters set forth in
Section 9.1(b)).

              (b) Restrictions. Such Transfer would not:


                                       15
<PAGE>




              (i) Securities Laws. Result in the violation of the Securities
Act, or any regulation issued pursuant thereto, or any state securities law or
regulation or any other applicable federal or state laws or order of any court
having jurisdiction over the Company;

              (ii) Events of Default. Be a violation of or an event of default
under, or give rise to a right to accelerate any indebtedness described in, any
note, mortgage, loan agreement or similar instrument or document to which the
Company is a party, unless the violation or event of default is waived by the
parties thereto;

              (iii) Regulatory Requirements. Cause the Company or any Member to
be subject to any additional regulatory requirements;

              (iv) Tax Status. Cause a substantial risk, in the opinion of
counsel to the Company, that the classification of the Company as a
"partnership" for Federal or state income tax purposes could be adversely
affected;

              (v) Prohibited Transaction. Result in or create a "prohibited
transaction" or cause the Company or a Member or an Affiliate of a Member to be
or become a "party in interest", as defined in Section 3(14) of ERISA, or a
"disqualified person", as defined in Section 4975 of the Code with respect to
any plan, as defined in Section 3(3) of ERISA and/or Section 4975 of the Code,
or result in or cause the Company or any Member or any Affiliate of a Member to
be liable for tax under Chapter 42 of the Code or otherwise cause any such
Person to incur tax liabilities;

              (vi) Not Legally Competent. Be a Transfer to an individual who is
not legally competent or who has not achieved his or her majority under
applicable law (excluding trusts for the benefit of minors); or

              (vii) Transfer to a Foreign Person. Be a Transfer to a Person who
constitutes a "foreign person" under Section 1445 of the Code.

         (c) Costs. The transferor or transferee pays to the Company any and all
costs incurred and to be incurred by the Company in connection with the
Transfer, to the extent such costs would not have been incurred by the Company
if the Transfer had not been proposed or made.

         9.2. Transfers of Membership Interests.

              (a) Transfers Restricted. No Member may Transfer all or any
portion of its Membership Interest, except as set forth in Section 9.2(b), and
any purported Transfer of Membership Interest failing to meet the requirements
of Sections 9.1 and 9.2(b) shall be void ab initio.

              (b) Transfers of Membership Interest to Affiliates. Subject only
to the provisions of Section 9.1, a Member, with Notice to (but without consent
of) the other Member, may Transfer all (but not less than all) of its Membership
Interest at any time as follows:


                                       16
<PAGE>




                   (i) CT-F1 may Transfer its Membership Interest to any wholly
owned entity of CT; and

                   (ii) Limited REMI I may Transfer its Membership Interest to
Citigroup Inc. or to any of its direct or indirect wholly owned entities, or to
Travelers Property Casualty Corp., or any of its direct or indirect wholly owned
entities.

In accepting any such assignment, any such assignee shall automatically become a
Substitute Member with all of the rights and powers granted to the assigning
Member herein but no such Transfer shall release the transferring Member of any
of its obligations hereunder, unless such release is approved in writing by the
other Member.

         9.3 Purchase/Sale Option.

              (a) Right to Purchase. In the case of an Event of Default under
Section 11.1(a)(i) or (iv) with respect to a Member, the Non-Defaulting Member
shall have the right, pursuant to Section 11.2 hereof, to purchase, or to cause
a Person designated by it to purchase, all (but not less than all) of the
Membership Interest of the Defaulting Member at a price equal to 90% of the
excess, if any, of (x) the Defaulting Member's aggregate Additional Payments
over (y) the excess, if any, of (A) aggregate Distributions previously made to
the Defaulting Member over (B) the excess, if any, of (i) the aggregate Net
Profits allocated as provided below to the Defaulting Member over (ii) aggregate
Net Losses allocated as provided below to the Defaulting Member. Such
Non-Defaulting Member may within thirty (30) days after such Event of Default
(the "Election Period") elect to purchase, or to cause another Person designated
by it to purchase, the Membership Interest of the Defaulting Member, and the
Non-Defaulting Member shall give a Notice (the "Election Notice") to the
Defaulting Member setting forth: (i) such election, (ii) the price and (iii) a
closing date for the purchase (the "Purchase Date"), which shall be no later
than ten (10) days after the date of the Election Notice. For purposes of this
Section 9.3, the Company shall close its books as at the date of the Election
Notice. Net Profits and Net Losses, as the case may be of a Defaulting Member
shall be determined by calculating the aggregate Net Profits and aggregate Net
Losses allocated to the Defaulting Member for Fiscal Years prior to the Fiscal
Year in which any purchase under this Section 9.3 takes place together with Net
Profits and Net Losses allocated to the Defaulting Member during the Fiscal Year
in which the Election Notice is given through and including the date of the
Election Notice. On the Purchase Date, the Defaulting Member shall sell, and the
Non-Defaulting Member shall purchase, the Defaulting Member's Membership
Interest to be sold under the Election Notice for such price, which shall be
paid in immediately available funds. Any loans previously made to the Company by
the Defaulting Member shall be due and payable on the Purchase Date. In the
event an Election Notice is not delivered within the Election Period, the
Non-Defaulting Member shall have waived its rights under this Section 9.3 with
respect to that Event of Default.

              (b) Representations. At the closing of the purchase and sale of a
Membership Interest pursuant to Section 9.3, the Defaulting Member shall warrant
to the Non-Defaulting Member or its designee that the Membership Interest sold
is free and clear of all liens, security interests and other legal and equitable
claims of third parties. Such warranty shall survive the closing of the purchase
and sale of the Membership Interest, and in the event of any breach of such
warranty, the Non-Defaulting Member or its designee may proceed against any and
all


                                       17
<PAGE>




personal assets of the Defaulting Member to recover damages on account of
such breach, notwithstanding the provisions hereof and Section 18-303 of the
Delaware Act. Notwithstanding the foregoing, however, if the Defaulting Member's
Membership Interest is subject to any lien, security interest and other legal
and equitable claims of third parties, the Non-Defaulting Member or its designee
may elect (a) to cause all amounts (or a portion thereof) payable to the
Defaulting Member to first be applied to discharge such lien, security interest
and other legal and equitable claims of third parties, and pay only the balance,
if any, to the Defaulting Member (b) to take the Membership Interest subject to
such lien, security interest and other legal and equitable claims of third
parties, and to reduce the amount otherwise payable by the Non-Defaulting Member
or its designee to the Defaulting Member by the amount of such lien, security
interest and other legal and equitable claims of third parties, or (c) to
terminate the purchase and sale proceedings because of the existence of such
lien, security interest and other legal and equitable claims of third parties,
and in such event to pursue any and all remedies available at law or in equity.

                                   ARTICLE X
                          DISSOLUTION AND LIQUIDATION

         10.1. Dissolution. The Company shall be dissolved upon the first to
occur of the following:

              (a) Bankruptcy of the Company. The Bankruptcy of the Company;

              (b) Agreement to Dissolve. The decision of the Members to dissolve
the Company pursuant to Section 11.2 or for any reason;

              (c) Judicial Dissolution. The entry of a decree of judicial
dissolution under Section 18-802 of the Delaware Act;

              (d) End of Term. The tenth anniversary date hereof; or

              (e) Unwind. The completion of the Unwind.

The occurrence of an Event of Default as to any Member shall not dissolve the
Company.

         10.2. Winding up Affairs and Distribution of Assets.

              (a) Liquidation. Upon the dissolution of the Company, other than
as set forth in Section 10.2(c) hereof, the Members shall choose a liquidating
Member ("Liquidating Member"), and the Liquidating Member shall proceed to wind
up the affairs of the Company, liquidate the remaining property and assets of
the Company and wind up and terminate the business of the Company. Any such
Liquidating Member shall cause a full accounting of the assets and liabilities
of the Company to be taken and shall cause the assets to be liquidated and the
business to be wound up as promptly as possible.

              (b) Payments of Proceeds Upon Liquidation. The proceeds of
liquidation of the Company shall be applied in the following order of priority:
(i) first, to the expenses of such liquidation; (ii) second, to the debts and
liabilities of the Company owing to third parties


                                       18
<PAGE>




(including payment owed to the Investment Manager pursuant to the Investment
Management Agreement); (iii) third, a reasonable reserve shall be set up to
provide for any contingent or unforeseen liabilities or obligations of the
Company owing to third parties, and at the expiration of such period as the
Members may deem advisable, the balance remaining in such reserve shall be
distributed as provided herein; (iv) fourth, to the debts and liabilities of the
Company owing to the Members, including any reimbursements payable under this
Agreement; (v) fifth, the Warrant Purchase Note shall be distributed to Limited
REMI I, and (vi) sixth, unless either party shall have exercised the purchase
right pursuant to Section 9.3 hereof or the Unwind Right, to the Members, in
accordance with their respective Capital Accounts (after taking into account all
allocations and prior Distributions). Assets distributed in kinds shall be taken
into account at their Fair Market Value.

              (c) Unwind; Unwind Rights. If the Unwind Right shall have been
exercised pursuant to the Venture Agreement, the Members shall determine the
Fair Market Value of the Company's assets remaining after setting aside or
paying out sums and assets referred to in clauses (i) through (v) of Section
10.2(b) hereof (the "Net Unwind Assets"). The Net Unwind Assets shall be divided
into four pools with as nearly equal Fair Market Values as is reasonably
practicable, whereupon the first three pools shall be distributed in kind as
follows: Limited REMI I shall select the first pool and it shall be distributed
to Limited REMI I; CT-F1 shall select the second pool and it shall be
distributed to CT-F1; and Limited REMI I shall select the third pool and it
shall be distributed to Limited REMI I. Limited REMI I shall have the option to
cause the fourth pool to be distributed to it in kind or to sell the fourth pool
for cash, provided, however, that if Limited REMI I elects to sell the fourth
pool for cash it shall provide CT-F1 with five (5) days Notice of such election
and CT-F1 shall have ten (10) days from the date of distribution of the third
pool to exercise its right but not the obligation to purchase the fourth pool
from Limited REMI I for cash at the value previously agreed upon and provided,
further, that if CT-F1 does not purchase such fourth pool from Limited REMI I
for cash payable promptly after any such exercise of such right by CT-F1, the
parties shall cause the fourth pool to be liquidated. The proceeds from any such
liquidation shall be distributed to Limited REMI I. A Member that receives a
distribution of pools (or proceeds thereof) with an aggregate Fair Market Value
in excess of such Member's Percentage Interest in the aggregate Fair Market
Value of all the pools shall promptly pay the amount of such excess to the other
Member in cash; provided, however, that in making such calculation, if the
fourth pool is sold as provided herein, the net proceeds from the sale shall be
used in lieu of the Fair Market Value of the fourth pool.

         10.3. No Liability. Notwithstanding anything to the contrary in this
Agreement, no Member shall have any obligation to make any contribution to the
capital of the Company on account of any negative balance on its Capital Account
or tax capital account, whether at liquidation or otherwise, and the negative
balance of that Member's Capital Account or tax capital account shall not be
considered a debt owned by that Member to the Company or to any other person for
any purpose whatsoever.

         10.4. Limitations on Payments Made in Dissolution. Except as otherwise
specifically provided in this Agreement, each Member shall be entitled to look
only to the assets of the Company for the return of that Member's positive
Capital Account balance and shall have no recourse for its Capital Contributions
and/or share of Net Profits (upon dissolution or otherwise) against any other
Member.


                                       19
<PAGE>




         10.5. Certificate of Cancellation. Upon completion of the winding up of
the Company's affairs, the Liquidating Member shall file a Certificate of
Cancellation with the Delaware Secretary of State.

                                   ARTICLE XI
                              DEFAULT AND REMEDIES

         11.1. Default.

              (a) Default. The occurrence of any of the following shall
constitute a default ("Default") hereunder by the affected Member:

                   (i) A Member Transfers its Membership Interest other than as
set forth in Article IX;

                   (ii) The voluntary dissolution of the Member;

                   (iii) The Bankruptcy of the Member;

                   (iv) A Member materially breaches any of its obligations
hereunder other than as described in clause (vii) of this Section 11.1(a);

                   (v) A Member commits an act of fraud involving the Company
(which materially damages the Company) or intentionally misappropriates
significant funds of the Company;

                   (vi) the Investment Manager commits an act of fraud involving
the Company (which materially damages the Company) or intentionally
misappropriates significant funds of the Company;

                   (vii) There shall have been a failure by CT-F1 to cause
compliance with the Key Individuals Requirement, or the Investment Manager shall
have materially breached the Fund I Investment Management Agreement other than
as set forth in the foregoing clause (vi).

                   (viii) A Member causes the Company to default in an
obligation required to be performed by the Company pursuant to the Venture
Agreement or the Investment Management Agreement.

              (b) Notice of Default. If a Default occurs with respect to a
Member, the other Member (the "Non-Defaulting Member") shall have the right to
give that Member (the "Defaulting Member") Notice of that Default (a "Notice of
Default"). The Notice of Default shall set forth the nature of the Default with
reasonable specificity.

              (c) Period to Cure. A Member who shall have received a Notice of
Default with respect to a Default under any of clauses (i), (iv), (vii) or
(viii) of Section 11.1(a) shall have a period of thirty (30) days after receipt
of such Notice of Default to cure such Default and the Notice of Default with
respect thereto shall not be effective unless such Default is not cured within
such thirty (30) day period. In such case, the Defaulting member shall lose no
rights


                                       20
<PAGE>




hereunder with respect to a Default that has been so cured. However, if such
Default was not cured within thirty (30) days of receipt of the Notice of
Default, then the Default shall constitute an "Event of Default", and Limited
REMI I or CT-F1, as the case may be, shall have the rights set forth in Section
11.2.

         11.2. Remedies Upon Event of Default. (A) Subject to Section 11.1(c),
upon the occurrence of an Event of Default by a Defaulting Member under Section
11.1(a)(i), the Non-Defaulting Member may elect to do any one or more of (i),
(ii) and/or (iii) under this Section 11.2 after Notice to the Defaulting Member;
(B) upon the occurrence of an Event of Default by a Defaulting Member under
Section 11.1(a)(ii) or (iii), the Non-Defaulting Member may only elect to do
(ii) under this Section 11.2 after Notice to the Defaulting Member; (C) Subject
to Section 11.1(c) upon the occurrence of an Event of Default by a Defaulting
Member under Section 11.1(a)(iv), the Non-Defaulting Member may elect to do
either (i) or (ii) under this Section 11.2 after Notice to the Defaulting
Member; (D) upon the occurrence of an Event of Default by a Defaulting Member
under Section 11.1(a)(v), the Non-Defaulting Member may elect to do (i), (ii)
and/or (iii) under this Section 11.2 after Notice to the Defaulting Member; (E)
upon the occurrence of an Event of Default by the Investment Manager under
Section 11.1(a)(vi), the Member not affiliated with the Investment Manager may
elect to do any one or more of (i), (ii) and/or (iii) under this Section 11.2
after Notice to the Defaulting Member; (F) upon the occurrence of an Event of
Default by a Defaulting Member hereunder or by the Investment Manager under the
Investment Management Agreement as set forth in Section 11.1(a)(vii) of this
Agreement, the Non-Defaulting Member (or the Member not affiliated with the
Investment Manager in the case of such a Default by the Investment Manager) may
do only (ii) under this Section 11.2 after Notice to the Defaulting Member or
the Investment Manager as the case may be, and (G) upon the occurrence of an
Event of Default by a Defaulting Member under Section 11.1(a)(viii) the
Non-Defaulting Member may elect to do any one or more of (i), (ii) and/or (iii)
under Section 11.2 after Notice to the Defaulting Member:

                   (i) Purchase or cause a Person designated by it to purchase
the Defaulting Member's Interest pursuant to Section 9.3, in which case the Fund
I Investment Management Agreement shall terminate upon the closing of such
purchase;

                   (ii) Exercise the Unwind Right, in which case the Fund I
Investment Management Agreement shall terminate upon the completion of the
Unwind; or

                   (iii) Pursue, and/or cause the Company to pursue, any other
remedy provided in this Agreement, at law or in equity.

         11.3. Dispute Resolution. Should any dispute arise under this Agreement
other than with respect to Fair Market Value, then the parties shall resolve
such dispute pursuant to Section 4.2 of the Venture Agreement.

         11.4. Waiver of Partition and Certain Other Rights. Except with respect
to any exercise of the Unwind Right, each of the Members irrevocably waives any
right or power that it might have: (a) to cause the Company or any of its assets
to be partitioned; (b) to compel any sale of all or any portion of the assets of
the Company under any applicable law; (c) to cause the appointment of a receiver
for all or any portion of the assets of the Company; or (d) to file a


                                       21
<PAGE>




complaint, or to institute proceedings at law or in equity, to cause the
dissolution or liquidation of the Company, other than in accordance with this
Agreement. Each of the Members has been induced to enter into this Agreement in
reliance upon the waivers of this Section 11.4, and without those waivers no
Member would have entered into this Agreement.

                                  ARTICLE XII
                 REPRESENTATIONS AND WARRANTIES OF THE MEMBERS

         12.1. Reciprocal Representations and Warranties. Each Member hereby
represents and warrants to the Company and each other Member that:

              (a) Organization; Authority; Due Authorization.

                   (i) Organization and Good Standing. It is a limited liability
company duly organized, validly existing and in good standing under the
applicable laws of its jurisdiction of formation; has all requisite power to
own, lease and operate its assets, properties and business and to carry on its
business as now conducted; and is duly qualified or licensed to do business as a
foreign limited liability company and is in good standing in every jurisdiction
in which the nature of its business or the location of its properties requires
such qualification or licensing, except for such jurisdictions where the failure
to so qualify or be licensed would not have a material adverse effect upon its
ability to perform fully its obligations under this Agreement or any other
related agreement.

                   (ii) Authority to Execute and Perform Agreements. It has all
requisite limited liability company power and authority to enter into, execute
and deliver this Agreement, and all other related agreements to be executed by
it and to perform fully its obligations hereunder and thereunder.

                   (iii) Due Authorization; Enforceability. It has taken all
limited liability company actions necessary to authorize it to enter into and
perform fully its obligations under this Agreement and all other related
agreements to be executed by it and to consummate the transactions contemplated
herein and therein. This Agreement has been duly and validly executed by each
Member and constitutes the legal, valid and binding obligation of each Member,
enforceable in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
applicable laws affecting creditors' rights generally or by general equitable
principles affecting the enforcement of contracts.

                   (iv) United States Person. It is a "United States person" (as
defined in Section 7701 of the Code).


                   (v) Limited REMI I is a wholly owned indirect entity of
Citigroup Inc. and Travelers Property Casualty Corp., and CT-F1 is a wholly
owned direct subsidiary of CT.

              (b) No Violation. Neither its execution or delivery of this
Agreement nor the consummation of the transactions contemplated herein will (i)
violate any provision of its organizational documents or limited liability
company agreement; or (ii) violate in any material respect any applicable law or
order.


                                       22
<PAGE>




              (c) Regulatory and Other Approvals. No consent, approval,
authorization, notice, filing, exemption or other requirement must be obtained
by it from any authority or Person or must otherwise be satisfied by it in order
that the consummation of the transactions contemplated in this Agreement or any
related documents will not violate in any material respect any applicable law or
order or any material contract to which it is a party.

              (d) Securities Matters. It (i) is acquiring its Membership
Interest for itself for investment purposes only, and not with a view to any
resale or distribution of such Membership Interest, (ii) has been advised and
understands that such Membership Interest has not been and will not be
registered under the Securities Act, or any applicable state securities laws
and, therefore, cannot be resold unless such Membership Interest is registered
under the Securities Act and all applicable state securities laws, or unless
exemptions from registration are available, and (iii) has, either alone or with
its "purchaser representatives," as that term is defined in Rule 501(h) under
the Securities Act, such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of its investment
in the Company. It further acknowledges that the Company has made available to
such Member, at a reasonable time prior to its acquisition of its Membership
Interest, the opportunity to ask questions and receive answers concerning the
terms and conditions of such acquisition and to obtain any additional
information which the Company possesses or can acquire without unreasonable
effort or expense that is necessary to verify the accuracy of the information
furnished by the Company in connection with such acquisition.

                                  ARTICLE XIII
                           BOOKS, RECORDS AND REPORTS

         13.1. Maintenance of Books. The Company shall keep complete and
accurate books and records of accounts maintained in accordance with GAAP. Tax
records shall be maintained in accordance with the accrual method of accounting.
The books of account for the Company shall be maintained at the principal office
of the Company.

         13.2. Records to be Maintained. The Company shall maintain the
following records:

              (a) A current list of the full name, set forth in alphabetical
order, and last known mailing address together with the Capital Contribution and
the share of profit and losses of each Member or information from which such
share can be readily derived;

              (b) A copy of the Certificate of Formation and all amendments
thereto or restatements thereof, together with executed copies of any powers of
attorney pursuant to which such Certificate of Formation have been executed;

              (c) A copy of this Agreement, any amendments hereto and any
restatements hereof; and

              (d) A copy of the Company's Federal, state and local income tax
returns or informational returns and reports, if any, for the past ten (10)
years.

         13.3. Inspection by Members; Confidential Information. (a) Any Member
shall have the right to inspect and copy at such Member's expense, any
documents, including financial


                                       23
<PAGE>




statements maintained by the Company and other information regarding the affairs
of the Company, as is reasonable.

              (b) The Members acknowledge that from time to time, they may
receive information from or regarding the Company in the nature of trade secrets
or that otherwise is confidential, the release of which may be damaging to the
Company or Persons with which it does business. Each Member shall hold in strict
confidence any information it receives which is subject to a confidentiality
agreement binding on the Company or any of its employees, whether as a principal
or as an agent, and may not disclose such information to any Person other than
another Member except for disclosures (i) compelled by law (but such Member must
notify the other Member promptly of any request for that information, before
disclosing it if practicable), (ii) to advisers or representatives of the Member
or Persons to which that Member's Membership Interest may be assigned as
permitted by this Agreement, but only if the recipients have agreed to be bound
by the provisions of this Section 13.3(b), (iii) of information that Member also
has received from a source independent of the Company that the Member reasonably
believes obtained that information without breach of any obligation of
confidentiality, (iv) in accordance with the terms of such confidentiality
agreements or (v) upon the consent of each Member, but only if such employee is
informed that such information is to be held in strict confidence. The Members
acknowledge that breach of the provisions of this Section 13.3(b) may cause
irreparable injury to the Company for which monetary damages are inadequate,
difficult to compute, or both. Accordingly, the Members agree that the
provisions of this Section 13.3(b) may be enforced by specific performance.

         13.4. Books and Tax Reports. The books of account shall be closed
promptly after the end of each Fiscal Year. Within ninety (90) days after the
conclusion of each Fiscal Year, each Member shall be provided with a Form K-1
and/or other information statement with respect to its distributive share of
income, gains, deductions, losses and credits for income tax reporting purposes
for the previous Fiscal Year, together with any other information concerning the
Company necessary for the preparation of a Member's income tax return(s), all
under the supervision and as determined by the Tax Matters Member in its
reasonable discretion. With the sole exception of mathematical errors in
computation, these tax statements and the information contained therein shall be
deemed conclusive and binding upon such Member. Each Member agrees that it shall
not (i) treat, on its income tax returns, any item of income, gain, loss,
deduction or credit relating to its interest in the Company in a manner
inconsistent with the treatment of such item by the Members as reflected on the
Form K-1 or other information statement furnished by the Company to such Member
for use in preparing its income tax returns or (ii) file any claim for refund
relating to any such item based on, or which would result in, such inconsistent
treatment. Notwithstanding anything herein to the contrary, Limited REMI I shall
cause the Company's income tax returns for its first Fiscal Year to be prepared
and furnished to CT-F1 for its review and comments at least fifteen (15)
Business Days before the due date of the tax return. If CT-F1 does not furnish
comments to Limited REMI I within fifteen (15) Business Days, Limited REMI I may
cause the Company to file such tax returns.

                                  ARTICLE XIV
                                 MISCELLANEOUS

         14.1. Notices.


                                       24
<PAGE>




              (a) Form and Addresses. All notices, consents, approvals, waivers,
elections and other communications (collectively, "Notices") required to be
given pursuant to this Agreement shall be given in writing and,

              If to Limited REMI I:      Travelers Limited Real Estate Mezzanine
              ---------------------      Investments I, LLC
                                         205 Columbus Blvd, 9PB
                                         Hartford, CT 06183-2030
                                         Attn:    Duane Nelson, Esq.
                                         Real Estate Investment Number: 12832

              With Copies to:            Citigroup Investments Inc.
              ---------------            388 Greenwich Street, 36th Floor
                                         New York, New York 10013
                                         Attn:    Mr. Michael Watson
                                         Real Estate Investment Number: 12832

                                         Loeb & Loeb LLP
                                         1000 Wilshire Boulevard, Suite 1800
                                         Los Angeles, California 90017
                                         Attn:    Andrew S. Clare, Esq.

              If to CT:                  Capital Trust, Inc.
              ---------                  605 Third Avenue, 26th Floor
                                         New York, New York 10016
                                         Attn: John R. Klopp

              With a Copy to:            Battle Fowler LLP
              ---------------            75 East 55th Street
                                         New York, New York 10022
                                         Attn:  Thomas E. Kruger, Esq.

              (b) Delivery. All notices and other communications required or
permitted by this Agreement shall be deemed to have been duly given if
personally delivered to the intended recipient at the proper address determined
pursuant to this Section 14.1 or sent to such recipient at such address by air
courier, overnight courier, or by hand and will be deemed given, unless earlier
received: (a) if sent by courier when recorded on the records of the courier as
received by the receiving party; and (b) if delivered by hand, on the date of
receipt.

         14.2. Certificate Requirements. From time to time the Members shall
sign and acknowledge all such writings as are required to amend the Certificate
of Formation, for the carrying out of the terms of this Agreement, or, upon
dissolution of the Company, to cancel such certificate.

         14.3. Modification. No change or modification of this Agreement shall
be of any force unless such change or modification is in writing and has been
signed by all of the Members.


                                       25
<PAGE>




         14.4. Waivers and Consents. No waiver of any breach of any of the terms
of this Agreement shall be effective unless such waiver is in writing and signed
by the Member against whom such waiver is claimed. No waiver of any breach shall
be deemed to be a waiver of any other or subsequent breach. Any consent of a
Member required hereunder must be in writing and signed by such Member to be
effective. No consent given by a Member in any one instance shall be deemed to
waive the requirement for such Member's consent in any other or future instance.

         14.5. Severability. If any provision of this Agreement shall be held to
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.

         14.6. Further Assurances. Each Member shall execute such deeds,
assignments, endorsements, evidences of Transfer and other instruments and
documents and shall give such further assurances as shall be consistent with the
provisions of this Agreement and necessary to perform its obligations hereunder.

         14.7. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without regard to its
conflict of laws principles.

         14.8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.

         14.9. Limitation on Rights of Others. No Person other than a Member
shall have any legal or equitable right, remedy or claim under or in respect of
this Agreement; no third party (i.e., Person other than a Member) shall be a
beneficiary of any provision of this Agreement.

         14.10. Brokers and Finders. Except as set forth in the Placement Agent
Agreement and in the CT-F2-GP Capital Formation Agreement and the General REMI
II Capital Formation Agreement (each as defined in the Venture Agreement) (i)
there are no brokers, finders or placement agents, and (ii) each Member shall
indemnify and hold all of the other Members and the Company harmless from and
against any commission, fee or other payment due any broker, finder or other
Person in connection with such Member's decision to invest in the Company.

         14.11. Construction and Interpretation. This Agreement shall not be
construed more strictly against one party than against another by reason of the
fact that it may have been prepared by counsel for one of the parties.

         14.12. Successors And Assigns. This Agreement shall be binding upon and
inure to the benefit of the Members and their respective successors and
permitted assigns. This Agreement and the rights and obligations set forth
herein are for the sole benefit of the parties hereto and their respectable
Affiliates. Nothing contained herein is intended to confer upon any other person
any rights or remedies hereunder.

         14.13. Survival. Sections 8.3 through 8.7, and Articles XI through XIV
hereof shall survive termination of this Agreement.


                                       26
<PAGE>




         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above stated.


                                    MEMBERS:


                                    TRAVELERS LIMITED REAL
                                    ESTATE MEZZANINE INVESTMENTS I, LLC


                                    By:  /s/  Michael Watson
                                        --------------------------------------
                                           Michael Watson
                                           Vice President


                                    CT-F1, LLC


                                    By:  Capital Trust, Inc.,
                                         its sole member


                                         By:  /s/  John R. Klopp
                                              ----------------------------------
                                              John R. Klopp
                                              Chief Executive Officer



                                       27

<PAGE>



                                   EXHIBIT "A"
                                   -----------

                       Names and Initial Capital Accounts

                                                            Initial Capital
                                                            ---------------
               Member Name                                     Account
               -----------                                     -------

   Travelers Limited Real Estate                              $1,020,075
   Mezzanine Investments I, LLC


   CT-F1, LLC                                                 $ 340,025