Document:

AGREEMENT dated as of March 8, 2000 by and between, Capital Trust,
Inc., a Maryland corporation ("CT"), and Travelers General Real Estate Mezzanine
Investments II, LLC, a Delaware limited liability company ("General REMI II").

                              Preliminary Statement

         A. General REMI II, Travelers Limited Real Estate Mezzanine Investments
I, LLC, a Delaware limited liability company,  and Travelers Limited Real Estate
Mezzanine  Investments  II,  LLC,  a Delaware  limited  liability  company,  CT,
CT-F2-GP,  LLC, a Delaware limited  liability company that is wholly-owned by CT
("CT-F2-GP")  and  certain of their  affiliates  have  entered  into the Venture
Agreement,  dated as of March 8, 2000 to provide  for  various  common  business
enterprises in the area of mezzanine financing.

         B. CT-F2-GP and General REMI II will enter into the Limited Liability
Company Agreement of CT MP II LLC, a Delaware limited liability company ("CT MP
II") (the "LLC Agreement"), and have agreed that CT MP II will act as the
general partner of CT Mezzanine Partners II LP, a Delaware limited partnership
(the "Partnership").

         C. CT-F2-GP and General REMI II will cause CT MP II to enter into the
Partnership Agreement of the Partnership with various limited partner investors
(the "Partnership Agreement").

         D. Pursuant to the Venture Agreement, CT has agreed to contribute,
provided that CT has obtained the approval of stockholders of CT required under
the rules of the New York Stock Exchange (the "Stockholder Approval"), certain
warrants (the "Warrants") to purchase shares of Common Stock, as defined below,
to CT-F2-GP or its Affiliates, in which case CT-F2-GP or its Affiliate, as the
case may be, will contribute the Warrants to CT MP II or its Affiliate, as the
case may be, whereupon certain of the Warrants will be sold to General REMI II
or its Affiliate, as the case may be, and the other of such Warrants will be
assigned by CT MP II or its Affiliate, as the case may be, to Limited REMI II or
its Affiliate, as the case may be, as compensation for services in procuring
capital commitments.

         1. Payment Rights. As additional consideration for General REMI II
entering into the Venture Agreement and the LLC Agreement, and performing its
obligations thereunder, and for General REMI II (with CT-F2-GP) causing CT MP II
to enter into the Partnership Agreement, CT grants to General REMI II contingent
cash rights to receive payments from CT as provided herein (the "Rights").

         2. Certain Definitions.

            (a) "500,000 Reference Number" means 500,000 as adjusted pursuant to
     Section 4.

            (b) "4,750,000 Reference Number" means 4,750,000 as adjusted
     pursuant to Section 4.

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            (c) "Amount Committed" at any time means the aggregate capital
     commitments made by the CIG Parties or high net worth individuals
     institutions who are clients of Citibank's private bank to the Partnership
     or other Funds co-sponsored by the CIG Parties and the CT Parties.

            (d) "Base Price" means five dollars ($5.00), subject to adjustment
     as provided herein.

            (e) "Board of Directors" means the board of directors of CT.

            (f) "Calculation Date" has the meaning set forth in Section 3(c)
     hereof.

            (g) "Closing Price" with respect to Common Stock, on any day, means
     the last reported sale price per share of Common Stock, regular way on such
     day, or, if no sale takes place on such day, the average of the reported
     closing bid and asked prices per share of Common Stock on such day, regular
     way, in either case as reported on the NYSE Composite Tape, or, if the
     Common Stock 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 the Common Stock is not
     listed or admitted to trading on a national securities exchange, on the
     NASDAQ Stock Market of the National Association of Securities Dealers,
     Inc., or, if the Common Stock is not quoted or admitted to trading on such
     quotation system, on the principal quotation system on which the Common
     Stock is listed or admitted to trading or quoted, or, if not listed or
     admitted to trading or quoted on any national securities exchange or
     quotation system, the average of the closing bid and asked prices per share
     of Common Stock in the over-the-counter market on the day in question as
     reported by the National Quotation Bureau Incorporated, or a similar
     generally accepted reporting service, or, if not so available in such
     manner, as furnished by any New York Stock Exchange member firm selected
     from time to time by the Board of Directors (or any committee duly
     authorized by the Board of Directors) for that purpose or, if not so
     available in such manner, as otherwise determined in good faith by the
     Board of Directors (or any committee duly authorized by the Board of
     Directors). In the event the Common Stock is converted into or exchanged
     for other securities, or other securities are issued with respect to Common
     Stock, the Closing Price with respect to such securities shall refer to the
     price (including fractions) determined in accordance with this subsection
     (g) of the securities that would be obtained upon the conversion or
     exchange of, or issued to an owner of, one (1) share of Common Stock.

            (h) "Common Stock" means the class A common stock, par value $.01
     per share, of CT.

            (i) "Commencement Date" means the later of March 8, 2001 or the date
     of the initial closing of the Partnership.

            (j) "Current Market Price" on any date in question means 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

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<PAGE>

     more than one event occurs that would require an adjustment pursuant to
     Sections 4 (a) through (d), 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 Section 4 hereof, in which case any
     such determination by the Board of Directors shall be conclusive unless the
     Holder shall, within five (5) days of receipt of the Adjustment Certificate
     setting forth the adjustment made, request that the determination be made
     pursuant to the Appraisal Procedures. 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.

            (k) "Fund" means a pooled investment vehicle to engage in the making
     or acquisition of (a) senior and subordinated loans (whether interim,
     mid-term or long-term or a combination of the foregoing) to commercial real
     estate owners and property developers, (b) high-yield loans that are
     subordinate to the first lien mortgage loan on commercial real estate and
     are secured either by a second lien mortgage or a pledge of all or a
     portion of the ownership interest in the borrowing property owner (which
     investment may take the form of investments in certificates in trust or a
     preferred equity interest in the property owning entity), or (c) rated or
     unrated interests in public and private commercial mortgage backed
     securities.

            (l) "Maximum Number" at any time means the sum of (1) the 500,000
     Reference Number plus (2) the 4,750,000 Reference Number multiplied by a
     fraction (not greater than one), the numerator of which is the Amount
     Committed at such time and the denominator of which is $250,000,000.

            (m) "Trading Day" means a day on which any securities are traded on
     the national securities exchange or quotation system used to determine the
     Closing Price.

         3. Exercise of Rights. This Agreement shall enable General REMI II or a
permitted transferee to whom General REMI II assigns its Rights (the "Holder")
to receive payment from CT in accordance with this section.

            (a) The Holder may exercise its Rights under this Agreement in whole
     at any time, or in part from time to time, commencing on the Commencement
     Date and prior to 5:00 p.m., Eastern Time, on March 8, 2005, by giving
     notice of its election to exercise such Right to CT (the "Exercise
     Notice"); provided, however, that the Holder may exercise its Rights only
     once per fiscal quarter of CT. Any exercise of such Rights shall be
     effective on the date and at the time the Exercise Notice is received by CT
     (the "Exercise Date").

            (b) The Exercise Notice shall specify the whole number of Rights
     with respect to which the Rights are being exercised (each, an "Exercised
     Right"), provided that the number of Rights so specified (i) shall not
     exceed the excess, if any, of the

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<PAGE>

     Maximum Number at such time over the aggregate number of previously
     Exercised Rights (as adjusted pursuant to this Agreement) and (ii) shall
     not be less than 100,000.

            (c) With respect to each Exercised Right, CT shall pay to the Holder
     an amount (the "Proceeds") equal to the excess of:

                (i) the Current Market Price on the day preceding the Exercise
            Date (the "Calculation Date") over

                (ii) the Base Price on the Calculation Date.

CT shall pay the Proceeds to the Holder in cash within ten (10) days after the
Exercise Date.

         4. Adjustments. The Base Price, the number of previously Exercised
Rights, the 500,000 Reference Number, the 4,750,000 Reference Number and the
Proceeds shall be subject to adjustment from time to time as set forth in this
Section 4. Whenever the Base Price is adjusted by operation of this Section 4,
the number of previously Exercised Rights, the 500,000 Reference Number and the
4,750,000 Reference Number shall be adjusted as provided in subsection (e)
hereof.

            (a) In case CT shall, while any of the Rights 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 CT (other than the reclassifications covered
     by subsection (d)), the Base Price shall be adjusted to be equal to a
     fraction, the numerator of which shall be the Base Price theretofore in
     effect and the denominator of which shall be the number of shares of Common
     Stock or other stock of CT that an owner of one share of Common Stock would
     own immediately following such action 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 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 other distribution or resolve to
     take any action referred to in this subsection, it shall provide written
     notice thereof to the Holder not less than 10 days prior to the record date
     fixed for determining the stockholders entitled to participate therein.

            (b) In case CT shall, while any of the Rights are outstanding, issue
     rights or warrants to purchase, or securities convertible into or
     exchangeable for, Common Stock (the "Stock Rights") to any holders of its
     outstanding shares of Common Stock entitling them (for a period expiring
     within forty-five (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 on the record date
     mentioned below, provided the purchase price per share is less than the
     Base Price theretofore in effect, the

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<PAGE>

     Base Price shall be adjusted so that the same shall equal the amount
     determined by multiplying the Base 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 Stock 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 Stock
     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 CT in
     consideration of the issuance or sale of such Stock Rights plus any
     additional consideration payable to CT 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
     such Stock Rights, retroactive to the record date for the determination of
     stockholders entitled to receive such Stock Rights.

            (c) In case CT 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 Stock Rights referred to in subsection (b), any dividend or other
     distribution paid exclusively in cash and any dividend or other
     distribution referred to in subsection (a) of this Section 4), the Base
     Price shall be reduced so that the same shall equal the price determined by
     multiplying the Base Price theretofore in effect by a fraction, the
     numerator of which shall be the Current Market Price 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 unless
     the Holder shall, within five (5) days of receipt of the Adjustment
     Certificate setting forth the adjustment made, request that the
     determination be made pursuant to the Appraisal Procedures), 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. 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 Base Price shall again be
     adjusted to be the Base 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.

            (d) In the case of any capital reorganization of CT or
     reclassification of the Common Stock, or any consolidation or merger to
     which CT is a party other than a merger or consolidation in which CT is the
     continuing corporation, or in the case of any sale or conveyance to another
     entity of the property of CT as an entirety or substantially as an
     entirety, or in the case of any statutory exchange of securities with
     another

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<PAGE>

     corporation (including any exchange effected in connection with a merger of
     a third corporation into CT), the Proceeds with respect to each Exercised
     Right shall be adjusted to equal the excess of (i) the fair market value
     (as determined in good faith by the Board of Directors, whose determination
     shall be conclusive unless the Holder shall (within five (5) days of
     receipt of the Adjustment Certificate (as defined below)) on the
     Calculation Date of the kind and amount of securities, cash or other
     property (including fractions) which an owner of one (1) share of Common
     Stock would have received immediately after such reorganization,
     reclassification, consolidation, merger, statutory exchange, sale or
     conveyance over (ii) the Base Price on the Calculation Date; and in any
     such case, if necessary, appropriate adjustment shall be made in the
     application of the provisions set forth in this Section 4 with respect to
     the rights and interests thereafter of the Holder to the end that the
     provisions set forth in this Section 4 shall thereafter correspondingly be
     made applicable, as nearly as may reasonably be, in relation to the
     Proceeds thereafter payable upon exercise of the Rights. Notice of any such
     reorganization, reclassification, consolidation, merger, exchange, sale or
     conveyance shall be mailed to the Holder not less than thirty (30) 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. CT
     shall require the issuer of such securities, cash or property in the
     transaction to be responsible for all of the agreements and obligations of
     CT hereunder.

            (e) Whenever the Base Price is adjusted as provided pursuant to this
     Section 4, the aggregate number of previously Exercised Rights the 500,000
     Reference Number and the 4,750,000 Reference Number shall be adjusted by
     multiplying such number thereof immediately prior to such adjustment by a
     fraction, the numerator of which shall be the Base Price immediately prior
     to such adjustment, and the denominator of which shall be the Base Price
     immediately thereafter.

            (f) No adjustment in Base Price shall be required unless such
     adjustment would require an increase or decrease of at least one percent
     (1%) in the Base 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 Base 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 Base 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 CT shall, by dividend or otherwise, declare or make a
     distribution on the shares of Common Stock referred to in Section 4(c), the
     Holder, upon the exercise of Rights subsequent to the close of business on
     the date fixed for the determination of stockholders entitled to receive
     such distribution and prior to the

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<PAGE>

     effectiveness of the Base Price adjustment in respect of such distribution,
     shall also be entitled to receive, for each such Exercised Right, cash
     equal to the fair market value of the shares of Common Stock, 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 (as determined in good faith by the
     Board of Directors, whose determination shall be conclusive unless the
     Holder shall, within five (5) days of receipt of the Adjustment Certificate
     setting forth the adjustment made, request that the determination be made
     pursuant to the Appraisal Procedures).

            (j) Whenever the Base Price is adjusted as provided in this Section
     4 and upon any modification of the rights of the Holder in accordance with
     this Section 4, CT shall promptly prepare a certificate signed by the chief
     financial officer or the treasurer setting forth the adjusted Base 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, CT 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 the Common Stock is converted into or exchanged for, or the
     owners of Common Stock 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 Base Price between or among
     such classes of stock or securities (whose determination shall be
     conclusive unless the Holder shall, within five (5) days of receipt of the
     Adjustment Certificate setting forth the adjustment made, request that the
     determination be made pursuant to the Appraisal Procedures).

            (m) Upon the expiration of any rights, options, warrants or
     conversion privileges with respect to the issuance of which an adjustment
     to the Base Price had been made, if such shall not have been exercised, the
     Base Price 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 CT upon such exercise plus the
     consideration, if any, actually received by CT 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 Base Price by an amount in excess
     of the amount of the adjustment initially made thereto in respect of the
     issuance, sale or grant of such rights, options, warrants or conversion
     privileges.

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<PAGE>

            (n) In case any event shall occur as to which the other provisions
     of this Section 4 are not strictly applicable but as to which the failure
     to make any adjustment would not fairly protect the Rights pursuant to this
     Agreement 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 Rights
     pursuant to this Agreement (whose determination shall be conclusive unless
     the Holder shall, within five (5) days of receipt of the Adjustment
     Certificate setting forth the adjustment made, request that the
     determination be made pursuant to the Appraisal Procedures) and shall
     promptly make the adjustments described therein.

         5. Termination. This Agreement and the Rights shall automatically
terminate without further action upon completion of the transfer of Warrants
from CT-F2-GP or its Affiliate, as the case may be to CT MP II or its Affiliate,
as the case may be, and then from CT MP II or its Affiliate, as the case may be,
to General REMI II or its Affiliates, as the case may be, in accordance with the
Preliminary Statement hereof.

         6. Transfer. The Rights are not transferable except to any partner of
the Partnership and thereafter to a direct or indirect wholly owned entity of
Citigroup Inc. or Travelers Property Casualty Corp.

         7. 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. CT or the Holder may change its address for receiving notices by
giving written notice of such change to the other.

         If to CT, to:         Capital Trust, Inc.
                               605 Third Avenue, 26th Floor
                               New York, New York 10016
                               Attn: Chief Financial Officer

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

         If to the Holder, to: Travelers General Real Estate
                               Mezzanine Investments II, LLC
                               205 Columbus Boulevard, 9PB
                               Hartford, CT 06183-2030
                               Attn:  Duane Nelson, Esq.
                               Real Estate Investment Number: 12833

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<PAGE>

         With copies to:       Citigroup Investments Inc.
                               388 Greenwich Street, 36th Floor
                               New York, New York 10013
                               Attn: Mr. Michael Watson
                               Real Estate Investment Number: 12833

                               Loeb & Loeb LLP
                               1000 Wilshire Boulevard, Suite 1900
                               Los Angeles, California 90017
                               Attn: Andrew S. Clare, Esq.

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

         9. Applicable 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
principles of conflicts of law thereof.

         10. Amendment, Waiver, etc. Except as expressly provided herein,
neither this Agreement 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 CT and the majority in interest of the
Holders.

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<PAGE>

     IN WITNESS WHEREOF, CT and General REMI II have caused this Agreement
to be executed as of March 8, 2000.

                                         CAPITAL TRUST, INC.

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

                                         TRAVELERS GENERAL REAL ESTATE
                                         MEZZANINE INVESTMENTS II, LLC

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

                                       10Exhibit 10.6

                               GUARANTY OF PAYMENT

         This  GUARANTY OF PAYMENT  (this  "Guaranty of  Payment"),  dated as of
March 8, 2000, made by Capital Trust,  Inc. ("CT") in favor of Travelers Limited
Real Estate Mezzanine  Investments I, LLC, a Delaware limited  liability company
("Limited REMI I"), Travelers General Real Estate Mezzanine  Investments II, LLC
("General REMI II"), a Delaware limited liability company, and Travelers Limited
Real Estate Mezzanine  Investments II, LLC, a Delaware limited liability company
("Limited REMI II" and collectively with Limited REMI I and General REMI II, the
"CIG  Parties").  Terms not  otherwise  defined  herein  shall have the meanings
assigned to such terms in the Venture Agreement, as defined below.

                             PRELIMINARY STATEMENTS

         WHEREAS,  CT, its wholly  owned  subsidiaries,  CT-F1,  LLC, a Delaware
limited liability company ("CT-F1"), CT-F2-GP, LLC, a Delaware limited liability
company  ("CT-F2-GP"),  CT-F2-LP,  LLC, a  Delaware  limited  liability  company
("CT-F2-LP"),  and  CT  Investment  Management  Co.,  LLC,  a  Delaware  limited
liability company ("CTIMCO" and collectively with CT-F1,  CT-F2-GP and CT-F2-LP,
the "CT Parties"), and the CIG Parties intend to enter into that certain venture
agreement,  dated as of the date hereof,  pursuant to which, among other things,
the parties thereto will co-sponsor, commit to invest capital in and manage real
estate mezzanine opportunity funds (the "Venture Agreement").

         WHEREAS,  as a  condition  to the  Parties  entering  into the  Venture
Agreement, CT has agreed to execute and deliver this Guaranty of Payment.

         NOW, THEREFORE, in consideration of the promises and in order to induce
CIG Parties to enter into the Venture Agreement, CT hereby agrees as follows:

         SECTION 1.  Unconditional Guarantee; Enforcement.

                  (a) CT hereby  unconditionally and irrevocably  guarantees for
         the benefit of the CIG Parties the full and prompt  payment when and as
         due  of the  CT  Parties'  funding,  contribution  and  indemnification
         obligations under the Venture  Agreement subject to any defense,  right
         of set-off or counterclaim,  other than on account of or resulting from
         the  Bankruptcy of any of the CT Parties,  that the CT Parties may have
         or assert,  which defense,  right of set-off or  counterclaim  shall be
         available to CT hereunder to the same extent that it would be available
         to the applicable CT Party ("Guaranteed Obligations.")

                  (b) It  shall  not be a  condition  to  the  obligation  of CT
         hereunder  to  guarantee  and ensure  the  performance,  observance  or
         payment of any of the Guaranteed Obligations that the CIG Parties shall
         have  first made any  request of or demand  upon or given any notice to
         the CT Parties, or have instituted any action or proceeding against the
         CT Parties in

926594.4

<PAGE>

         respect thereof. The CIG Parties may proceed to enforce the Guaranteed
         Obligations of CT hereunder without first pursuing or exhausting any
         right or remedy that it may have against the CT Parties.

         SECTION 2. Obligations Absolute.  CT guarantees,  undertakes and agrees
with and for the benefit of the CIG Parties to ensure the performance of all the
Guaranteed  Obligations  strictly  in  accordance  with the terms of the Venture
Agreement.  The obligations of CT under this Guaranty of Payment are independent
of the Guaranteed  Obligations,  and a separate action or actions may be brought
and prosecuted  against CT to enforce this Guaranty of Payment,  irrespective of
whether  any action is brought  against the CT Parties or whether the CT Parties
are joined in any such  action(s).  The obligations of CT under this Guaranty of
Payment shall be absolute and unconditional irrespective of:

                  (a) any Bankruptcy of any CT Parties;

                  (b) any change in the time,  manner or place of payment of, or
         in any other term of, all or any of the Guaranteed Obligations,  or any
         other  amendment  or waiver of or any  consent  to  departure  from the
         Venture  Agreement or any other  agreement  entered into in  connection
         therewith or as contemplated thereby;

                  (c) any taking,  exchange,  release or  non-perfection  of any
         collateral, or any taking, release or amendment or waiver of or consent
         to departure from any other guaranty,  for all or any of the Guaranteed
         Obligations;

                  (d) any  manner of  application  of  collateral,  or  proceeds
         thereof, to all or any of the Guaranteed Obligations,  or any manner of
         sale  or  other  disposition  of any  collateral  for all or any of the
         Guaranteed  Obligations or any other assets of the CT Parties or any of
         their subsidiaries; or

                  (e) any change,  restructuring or termination of the corporate
         structure or existence of the CT Parties or any of their subsidiaries.

This Guaranty of Payment shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by the CIG Parties upon the insolvency,
bankruptcy or reorganization of the CT Parties or otherwise, all as though such
payment had not been made.

         SECTION 3. Waiver. CT hereby waives  promptness,  diligence,  notice of
acceptance  and  any  other  notice  with  respect  to  any  of  the  Guaranteed
Obligations  and this  Guaranty  of  Payment  and any  requirement  that the CIG
Parties protect,  secure, perfect or insure any security interest or lien or any
collateral  subject  thereto or exhaust any right or take any action against the
CT Parties or any other Person or any collateral.

926594.4
                                       -2-

<PAGE>

         SECTION 4.  Subrogation.  CT hereby  irrevocably  confirms that it will
subordinate  to the  claims and  rights of the CIG  Parties  any claims or other
rights it may have against the CT Parties or any of their respective  properties
that arise solely from the existence, payment, performance or enforcement of any
obligation  under  this  Guaranty  of  Payment  or the  Guaranteed  Obligations,
including  (without  limitation):  (a) any right of subrogation,  reimbursement,
exoneration,  contribution or indemnification or (b) any right to participate in
any claim or remedy of the CIG Parties  against  the CT Parties,  whether or not
such  claim,  remedy or right  arises in equity or under  contract,  statute  or
common law, including (without limitation) the right to take or receive from the
CT Parties,  directly or indirectly,  in cash or other property or by set-off or
in any other  manner,  payment or security  on account of such claim,  remedy or
right.  The provisions of this paragraph shall apply solely to claims made under
the Guaranty of Payment and shall not apply to any other rights or claims CT may
have now or in the future against the CT Parties.  CT acknowledges  that it will
receive  direct and indirect  benefits  from the Venture  Agreement and that the
confirmation  set forth in this paragraph is knowingly made in  contemplation of
such benefits.

         SECTION  5.  Consent to  Jurisdiction.  Subject to Section 6, CT hereby
irrevocably  submits  to the  non-exclusive  jurisdiction  of the  courts of the
County of New York,  State of New York and of any Federal  court  located in the
County of New York, State of New York (and any appellate court from any thereof)
in any action or  proceeding  arising  out of or  relating  to this  Guaranty of
Payment or the transactions  contemplated  hereby. CT hereby  irrevocably waives
any objection that it may have to the laying of venue of any such proceeding and
any claim that any such proceeding has been brought in an inconvenient forum.

         SECTION 6. Dispute Resolution.  Any dispute arising under this Guaranty
of Payment shall be subject to and settled pursuant to the procedures in Section
4.2 of the Venture Agreement.

         SECTION  7.  Representations  and  Warranties.   CT  hereby  makes  the
representations and warranties set forth in Section 3.1 of the Venture Agreement
and all references  therein to the Transaction  Documents and CT shall be deemed
to be  references  to this  Guaranty  of Payment  and CT,  respectively,  hereby
incorporated herein by reference.

         SECTION 8. Amendments,  Etc. No amendment or waiver of any provision of
this Guaranty of Payment, and no consent to any departure by CT herefrom,  shall
be effective  unless the same shall be in writing and signed by the CIG Parties,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.

         SECTION 9. Addresses for Notices.  All notices and other communications
provided for  hereunder  shall (a) be in writing,  (b) be delivered  pursuant to
Section 8.2 of the Venture  Agreement and (c) be effective as and when described
in such section.

         SECTION  10. No  Waiver;  Remedies.  No  failure on the part of the CIG
Parties to  exercise,  and no delay in  exercising,  any right  hereunder  shall
operate as a waiver thereof; nor

926594.4
                                       -3-

<PAGE>

shall any single or partial  exercise of any right hereunder  preclude any other
or further  exercise  thereof or the exercise of any other  right.  The remedies
herein  provided are  cumulative  and not exclusive of any remedies  provided by
law.

         SECTION 11. Binding  Agreement.  The  obligations of CT hereunder shall
(a)  remain  in full  force and  effect  until  the  performance  in full of the
Guaranteed Obligations,  (b) be binding upon CT, its successors and assigns, and
(c) inure to the  benefit of, and be  enforceable  by, the CIG Parties and their
successors, transferees and assigns.

         SECTION 12. No Third Party  Beneficiaries.  This Guaranty of Payment is
not  intended to confer upon any person other than the CIG Parties any rights or
remedies hereunder.

         SECTION 13.  Governing  Law. This Guaranty of Payment shall be governed
by, and construed in accordance with, the internal laws of the State of New York
(including Section 5- 1401 of the New York General Obligations Law).

         SECTION 14.  Waiver of Jury  Trial.  CT hereby  irrevocably  waives all
right to trial by jury in any action,  proceeding or counterclaim (whether based
on contract,  tort or otherwise)  arising out of or relating to this Guaranty of
Payment or the  actions of CT in the  negotiation,  performance  or  enforcement
thereof.

         SECTION  15.  Execution  in  Counterparts.   Delivery  of  an  executed
counterpart of a signature page to this Guaranty of Payment by telecopier  shall
be effective as delivery of a manually executed  counterpart of this Guaranty of
Payment.

                            [Signature Page Follows]

926594.4
                                       -4-

<PAGE>

         IN WITNESS WHEREOF, the undersigned has caused this Guaranty of Payment
to be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.

                            CAPITAL TRUST, INC.

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

926594.4

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