CAPITAL TRUST INC
EXHIBIT 10.1 MASTER LOAN AND SECURITY AGREEMENT
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>mastloan.txt
<DESCRIPTION>EXHIBIT 10.1 MASTER LOAN AND SECURITY AGREEMENT
<TEXT>




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                       MASTER LOAN AND SECURITY AGREEMENT


                              FOR A CREDIT FACILITY

                         IN AN AMOUNT UP TO $225,000,000


                            Dated as of July 16, 2001

                           CTMP II FUNDING CORP. (MS)

                                   as Borrower


                                       and


                MORGAN STANLEY DEAN WITTER MORTGAGE CAPITAL INC.

                                    as Lender













<PAGE>



<TABLE>
<CAPTION>

                             TABLE OF CONTENTS                                                                  Page


<S>                                                                                                              <C>
RECITALS             .............................................................................................1

Section 1.           Definitions and Accounting Matters...........................................................1

           1.01      "Certain Defined Terms.......................................................................1

           1.02      Accounting Terms and Determinations.........................................................13

Section 2.           Loans, Note and Prepayments.................................................................13

           2.01      Loans.......................................................................................13

           2.02      Notes.......................................................................................13

           2.03      Procedures for Borrowing....................................................................14

           2.04      Mandatory Prepayments or Pledge.............................................................18

Section 3.           Payments; Computations; Etc.................................................................18

           3.01      Repayment of Loans; Interest................................................................18

           3.02      Payments....................................................................................19

           3.03      Computations................................................................................20

           3.04      U.S. Taxes..................................................................................20

           3.05      Booking of Loans............................................................................21

           3.06      Lender's Funding of Eurodollar Rate Loans...................................................21

           3.07      Funding Costs...............................................................................21

           3.08      Compensation for Increased Costs............................................................22

           3.09      Limitation on Types of Loans; Illegality....................................................22

Section 4.           Collateral Security.........................................................................22

           4.01      Collateral; Security Interest...............................................................22

           4.02      Further Assurances..........................................................................23

           4.03      Changes in Locations, Name, etc.............................................................24

           4.04      Lender's Appointment as Attorney-in-Fact....................................................24

           4.05      Performance by Lender of Borrower's Obligations.............................................25

           4.06      Proceeds....................................................................................25

           4.07      Remedies....................................................................................25

           4.08      Limitation on Duties Regarding Preservation of Collateral...................................26

           4.09      Powers Coupled with an Interest.............................................................26

           4.10      Release of Security Interest................................................................26

           4.11      Release of Collateral.......................................................................26

           4.12      Substitution of Eligible Collateral.........................................................26

Section 5.           Conditions Precedent........................................................................27

           5.01      Initial Loan................................................................................27


                                      -i-
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                            TABLE OF CONTENTS                                                                  Page


           5.02      Initial and Subsequent Loans................................................................28

           5.03      Additional Requirements.....................................................................29

Section 6.           Representations and Warranties..............................................................30

           6.01      Existence...................................................................................30

           6.02      Action......................................................................................30

           6.03      Litigation..................................................................................30

           6.04      No Breach...................................................................................30

           6.05      Approvals...................................................................................30

           6.06      Use of Proceeds; Margin Regulations.........................................................31

           6.07      Taxes.......................................................................................31

           6.08      Investment Company Act......................................................................31

           6.09      Collateral; Collateral Security.............................................................31

           6.10      Chief Executive Office......................................................................32

           6.11      Location of Books and Records...............................................................32

           6.12      True and Complete Disclosure................................................................32

           6.13      ERISA.......................................................................................32

           6.14      Income Tax..................................................................................32

Section 7.           Covenants of Borrower.......................................................................32

           7.01      Financial Statements, Reports, etc..........................................................32

           7.02      Litigation..................................................................................33

           7.03      Existence, etc,.............................................................................33

           7.04      Prohibition of Fundamental Changes..........................................................34

           7.05      Borrowing Base Deficiency...................................................................34

           7.06      Notices.....................................................................................34

           7.07      Reports.....................................................................................35

           7.08      Transactions with Affiliates................................................................35

           7.09      Foreclosure or Other Remediation by Borrower................................................35

           7.10      Limitation on Liens.........................................................................35

           7.11      Limitation on Distributions.................................................................35

           7.12      Maintenance of Ratio of Earnings Before Interest, Taxes, Depreciation and
                     Amortization to Interest and Preferred Dividends............................................35

           7.13      Maintenance of Ratio of Total Indebtedness to Tangible Net Worth............................36

           7.14      Servicer; Servicing Tape....................................................................36

           7.15      Remittance of Prepayments...................................................................36

           7.16      Income Tax..................................................................................36


                                      -ii-

<PAGE>


                             TABLE OF CONTENTS                                                                  Page


Section 8.           Events of Default...........................................................................36

Section 9.           Remedies Upon Default.......................................................................38

Section 10.          No Duty of Lender...........................................................................38

Section 11.          Miscellaneous...............................................................................38

           11.01     Waiver......................................................................................38

           11.02     Notices.....................................................................................39

           11.03     Indemnification and Expenses................................................................39

           11.04     Amendments..................................................................................40

           11.05     Successors and Assigns......................................................................40

           11.06     Survival....................................................................................40

           11.07     Captions....................................................................................40

           11.08     Counterparts................................................................................40

           11.09     Loan Agreement Constitutes Security Agreement; Governing Law................................40

           11.10     SUBMISSION TO JURISDICTION; WAIVERS.........................................................40

           11.11     WAIVER OF JURY TRIAL........................................................................41

           11.12     Acknowledgments.............................................................................41

           11.13     Hypothecation or Pledge of Loans............................................................41

           11.14     Servicing...................................................................................41

           11.15     Periodic Due Diligence Review...............................................................42

           11.16     Intent......................................................................................43

           11.17     Change of Borrower's State of Formation.....................................................43

           11.18     Set-Off.....................................................................................43

           11.19     Morgan Stanley Downgrade....................................................................43

           11.20     Special Purpose Entity......................................................................43

</TABLE>



                                     -iii-



<PAGE>




                                TABLE OF CONTENTS

SCHEDULES
---------

SCHEDULE 1           Filing Jurisdictions and Offices

SCHEDULE 2           Approved Appraisers

SCHEDULE 3           Approved Engineers

SCHEDULE 4           Approved Environmental Consultants



EXHIBITS
--------

EXHIBIT A            Form of Promissory Note

EXHIBIT B            Form of Custodial Agreement

EXHIBIT C            Form of Opinion of Counsel to Borrower

EXHIBIT D            Form of Request for Borrowing

EXHIBIT E            Form of Lender's Release Letter

EXHIBIT F            Form of Bailee Agreement






                                      -iv-
<PAGE>




                       MASTER LOAN AND SECURITY AGREEMENT



         MASTER LOAN AND SECURITY AGREEMENT,  dated as of July 16, 2001, between
CTMP II FUNDING CORP. (MS), a company  incorporated under the laws of the Cayman
Islands  ("Initial  Borrower"),  and MORGAN STANLEY DEAN WITTER MORTGAGE CAPITAL
INC., a New York corporation ("Lender").

                                    RECITALS

         Initial  Borrower  has  requested  that  Lender  from time to time make
revolving  credit loans to it to finance certain conduit loans,  multifamily and
commercial mortgage loans, mezzanine loans, equity interests, and other approved
collateral owned by Initial Borrower and certain Wholly-Owned Subsidiaries,  and
Lender is prepared to make such loans upon the terms and conditions  hereof.  In
addition,  Initial  Borrower  has  requested  that Lender from time to time make
revolving  credit  loans to it to  finance  certain  commercial  mortgage-backed
securities owned by Initial Borrower and certain  Wholly-Owned  Subsidiaries and
Lender is prepared to make such loans  pursuant to the terms and  conditions  of
that  certain  CMBS Loan  Agreement  dated as of July 16, 2001  between  Initial
Borrower and Morgan  Stanley  International  Limited Inc.  ("MSIL") (as amended,
supplemented,  or otherwise  modified and in effect from time to time, the "CMBS
Loan Agreement"). References herein to commercial mortgage backed securities and
related terms are solely to set forth the definitions of Eurodollar Rate Spread,
Advance  Rate and Maximum  Advance  Rate for such  collateral  and the CMBS Loan
Agreement shall govern as to all other matters.

         Accordingly, the parties hereto agree as follows:

         Section 1. Definitions and Accounting Matters.
                    ----------------------------------

         1.01 "Certain Defined Terms." As used herein, the following terms shall
have the following  meanings (all terms defined in this Section 1.01 or in other
provisions  of this Loan  Agreement in the singular  will have the same meanings
when used in the plural and vice versa):

         "Advance Rate" means, for any item of Eligible  Collateral,  the ratio,
expressed as a percentage,  set forth opposite the collateral  type in the chart
provided in the definition of Eurodollar Rate Spread or as otherwise  defined or
limited herein.

         "Affiliate"  shall mean (i) with  respect to Lender,  any entity  which
controls,  is controlled  by, or is under common  control with Lender,  and (ii)
with respect to Borrower,  any  affiliate of Borrower as such term is defined in
the Bankruptcy Code.

         "Additional  Borrower"  has the meaning  provided  in Section  2.03 (a)
(iii) hereof.

         "Affiliate  Credit  Facility"  shall  mean  any one or more  agreements
between  Lender,  or  an  Affiliate  of  Lender,   and  Affiliates  of  Borrower
(including,  without  limitation,  that certain (i) Amended and Restated  Master
Loan and Security  Agreement dated as of February 8, 2001 between Capital Trust,
Inc. and Lender as amended  pursuant to that certain First  Amendment to Amended
and Restated Master Loan and Security  Agreement dated as of July 16, 2001, (ii)
that certain  Amended and Restated CMBS Loan  Agreement  dated as of February 8,
2001 between  Capital Trust,  Inc. and MSIL as amended  pursuant to that certain
First Amendment to Amended and Restated CMBS Loan Agreement dated as of July 16,
2001,  (iii) Master Loan and Security  Agreement  dated as of September 19, 2000
between CT  Mezzanine  Partners I LLC and  Lender as  amended  pursuant  to that
certain First Amendment to Master Loan and Security Agreement dated December 29,
2000 and as further amended  pursuant to that certain Second Amendment to Master
Loan and  Security  Agreement  dated  February  8, 2001 and as  further  amended
pursuant to that certain Third  Amendment to Master Loan and Security  Agreement
dated as of July 16, 2001,  and (iv) CMBS Loan  Agreement  dated as of September
19, 2000 between CT Mezzanine Partners I



<PAGE>


LLC as amended by that  certain  First  Amendment to CMBS Loan  Agreement  dated
February  8,  2001  and as  further  amended  pursuant  to that  certain  Second
Amendment to CMBS Loan Agreement  dated as of July 16, 2001),  pursuant to which
such Affiliate of Borrower shall incur  Indebtedness to Lender or such Affiliate
of Lender  and  including,  without  limitation,  any other  loan  agreement  or
repurchase agreement between Lender, or an Affiliate of Lender, and an Affiliate
of Borrower.

         "Aggregate  Imbedded First Mortgage Component" shall mean the aggregate
of each Imbedded First Mortgage Component as of the date of such calculation.

         "Amortization  Period"  shall mean,  if the  Termination  Date shall be
extended  in  accordance  with the terms  hereof,  the period from and after the
First Anniversary to, but not including,  the date that is nine (9) months after
the First Anniversary.

         "Appraisal"  means an appraisal of any Property  prepared by a licensed
appraiser listed on Schedule 3 attached hereto,  as such schedule may be amended
from  time to time  by  Borrower  or  Lender  upon  approval  by  Lender  in its
reasonable discretion,  in accordance with the Uniform Standards of Professional
Appraisal  Practice  of  the  Appraisal  Foundation,   in  compliance  with  the
requirements  of Title 11 of the  Financial  Institution  Reform,  Recovery  and
Enforcement Act and utilizing  customary  valuation  methods such as the income,
sales/market  or  cost  approaches,  as any  of  the  same  may  be  updated  by
recertification from time to time by the appraiser performing such Appraisal.

         "Asset-Specific  Loan Balance" means a portion of the Loan allocable to
each item of the Eligible Collateral. Such portion initially consists of the sum
of all advances of the Loan made on account of such Eligible Collateral, without
subtracting from such advances the Drawdown Fee, Lender's  Transaction Costs and
other  advance  costs and fees to the extent  borrowed  by  Borrower  hereunder.
Wherever this Loan Agreement  states that  principal  payments on account of the
Loan are to be  allocated  or  applied  to or against  the  Asset-Specific  Loan
Balance of a specific  item of  Eligible  Collateral,  the  Asset-Specific  Loan
Balance of such item of Eligible  Collateral shall be deemed reduced accordingly
by the amount of the principal payments so applied.

         "Asset  Value"  shall  mean,  as of any date in  respect  of an item of
Eligible  Collateral,  the price at which such Eligible Collateral could readily
be sold as  determined  in the sole good  faith of  Lender,  which  price may be
determined to be zero. Lender's  determination of Asset Value, which may be made
at any time  and  from  time to time,  shall  be  conclusive  upon the  parties.
Whenever an Asset Value  determination  is required  under this Loan  Agreement,
Borrower shall cooperate with Lender in its  determination of the Asset Value of
each item of Eligible Collateral (including,  without limitation,  providing all
information and documentation in the possession of Borrower  regarding such item
of Eligible  Collateral  or otherwise  required by Lender in its sole good faith
business discretion).

         "Bailee" shall mean Paul, Hastings, Janofsky & Walker LLP or such other
third party as Lender may approve.

         "Bailee  Agreement"  shall mean the Bailee  Agreement  among  Borrower,
Lender and Bailee in the form of Exhibit F hereto.

         "Bailee's Trust Receipt and  Certification"  shall mean a Trust Receipt
and Certification in the form annexed to the Bailee Agreement as Attachment 2.

         "Bankruptcy Code" shall mean the United States Bankruptcy Code of 1978,
as amended from time to time.

         "Base Rate" means, as determined by Lender on a daily basis, the higher
of (a) the rate per annum  established by The Chase  Manhattan Bank from time to
time as its "Prime" Rate or "reference" rate (which Borrower acknowledges is not
necessarily  such bank's lowest rate) and (b) one-half  percentage  point (0.5%)
(50 basis  points) over the Federal  Funds Rate,  as determined by Lender in its
sole discretion.



                                      -2-


<PAGE>


         "Borrower" shall mean the Initial Borrower together with any Additional
Borrower, to the extent applicable.

         "Borrower   By-Laws"   shall  mean  the   Memorandum  and  Articles  of
Association  of  Borrower   adopted  on   incorporation   thereof,   as  amended
supplemented or replaced from time to time with the approval of Lender.

         "Borrowing  Base"  shall  mean the  aggregate  Collateral  Value of all
Eligible  Collateral pledged to secure the amounts from time to time outstanding
under this Loan Agreement.

         "Borrowing Base Deficiency"  shall have the meaning provided in Section
2.04 hereof.

         "Business  Day" shall mean any day other than (i) a Saturday  or Sunday
or (ii) a day on which the New York Stock Exchange,  the Federal Reserve Bank of
New York or Custodian is authorized or obligated by law or executive order to be
closed.

         "Capital Lease Obligations" shall mean, for any Person, all obligations
of such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) Property to the extent such obligations are required
to be classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP, and, for purposes of this Loan Agreement,  the amount of such
obligations  shall be the capitalized  amount thereof,  determined in accordance
with GAAP.

         "CIG" shall mean Citigroup Investments Inc., a Delaware corporation, an
Affiliate of Citigroup Inc.

         "CMBS" shall mean,  in the singular or plural as the context  requires,
securities  backed by mortgages  and other liens on  commercial  real estate and
related  collateral  or by  securities,  interests or other  obligations  backed
directly or indirectly by such mortgages.

         "Code"  shall mean the Internal  Revenue Code of 1986,  as amended from
time to time.

         "Collateral" shall have the meaning provided in Section 4.01(b) hereof.

         "Collateral  Assignment"  shall mean all  documents  pursuant  to which
Borrower shall have collaterally  assigned all of its right,  title and interest
in, to and under an item of Collateral to secure a Loan made hereunder.

         "Collateral  Documents" shall mean with respect to any Collateral Loan,
Equity  Interest,  or Other Approved  Collateral,  the documents  comprising the
Collateral File for such item of Collateral.

         "Collateral  File" shall  mean,  as to each item of  Collateral,  those
documents  set forth in a schedule to be delivered  by Lender to  Custodian  and
which  are  delivered  to the  Custodian  pursuant  to the  terms  of this  Loan
Agreement  or  the  Custodial  Agreement  including,   without  limitation,  all
documents  required  by Lender to grant and  perfect a first  priority  security
interest in such item of Collateral.

         "Collateral  Loan"  shall mean,  as  applicable,  a Mortgage  Loan or a
Mezzanine Loan.

         "Collateral  Obligor" shall mean any obligor under any Collateral Loan,
any issuer of any  security  comprising  any portion of the  Collateral  and any
entity in which an Equity Interest comprises any portion of the Collateral.

         "Collateral  Report" shall mean the  collateral  schedule and exception
report prepared by Custodian pursuant to the Custodial Agreement.

         "Collateral  Schedule"  shall mean a list of Eligible  Collateral to be
pledged pursuant to this Loan Agreement,  attached to a Custodial Identification
Certificate  setting  forth,  as  to  each  item  of  Eligible  Collateral,  the
applicable  information  for such  Collateral  Type  specified on Annex 1 to the
Custodial Agreement.



                                      -3-


<PAGE>


         "Collateral  Type" shall mean a Mortgage Loan,  Mezzanine Loan,  Equity
Interest and Other Approved Collateral.

         "Collateral  Value"  shall mean,  with respect to each item of Eligible
Collateral,  the  Asset  Value of such  Eligible  Collateral  multiplied  by the
applicable  Advance Rate set forth in the definition of "Eurodollar Rate Spread"
set forth herein or as otherwise defined or limited herein;  provided, that, the
Collateral Value shall be deemed to be zero or such greater amount as determined
by Lender in respect of each item of Eligible Collateral (1) in respect of which
there is a breach of a representation or warranty by a Collateral  Obligor,  (2)
in respect of which there is a  delinquency  in the payment of principal  and/or
interest  which  continues  for a period in excess  of 30 days  (such  period to
include any applicable  grace periods) unless otherwise  approved by Lender,  or
(3) which has been released from the possession of Custodian under the Custodial
Agreement to Borrower for a period in excess of 14 days.

         "Collection Account" shall mean one or more accounts established by the
Servicer  subject to a  security  interest  in favor of  Lender,  into which all
Collections shall be deposited by the Servicer.

         "Collections" shall mean, collectively, all collections and proceeds on
or in respect of the Collateral,  excluding  collections  required to be paid to
the Servicer or a borrower on the Collateral.

         "Conduit Loan" shall mean a Mortgage Loan,  secured by a first mortgage
on a real  property,  that in Lender's  determination,  satisfies  the following
criteria: (i) principal balance not exceeding $40,000,000.00; (ii) interest at a
fixed  rate  with   prepayment   protection   satisfactory   to  Lender;   (iii)
single-asset,  bankruptcy  remote  property owner  complying with all nationally
recognized statistical rating agency requirements; (iv) no subordinate financing
and mortgage and organizational  documents prohibiting  subordinate financing or
unsecured   financing  not  otherwise   subject  to   intercreditor   agreements
satisfactory to rating agencies;  (v) debt service coverage ratio (as determined
by Lender in its sole  discretion)  of not less than  1.25:1 or such higher debt
service  coverage ratio as may be required by rating  agencies;  (vi) not having
any  characteristics  that  would  impair the  rating of any  securities  issued
pursuant to a securitization that included a substantial  component of mortgages
similar to such mortgage; and (vii) in full compliance with such other "conduit"
underwriting and structuring requirements as Lender shall establish from time to
time.

         "Control" shall mean  possession of the power,  directly or indirectly,
to (a) vote  more than  fifty  percent  (50%) of the  voting  securities  having
ordinary  power for the  election of  directors  of an entity,  or (b) direct or
cause the direction of the  management  and policies of such entity,  whether by
contract or otherwise.

         "CT-F2" shall mean CT-F2-GP,  LLC, a Delaware limited liability company
and a member of the general partner of CT Mezz II.

         "CT Mezz II" shall mean CT Mezzanine Partners II LP, a Delaware limited
partnership, the sole shareholder of CTMP II.

         "CTMP II" shall  mean CTMP II  Funding  Corp.,  a company  incorporated
under the laws of the Cayman Islands, the sole shareholder of Borrower.

         "CTI" shall mean Capital Trust,  Inc., a Maryland  corporation  and the
sole member of CT-F2.

         "CTIMCO"  shall  mean CT  Investment  Management  Co.,  LLC, a Delaware
limited liability company and the investment manager of Borrower pursuant to the
Investment Management Agreement.

         "Custodial  Agreement" shall mean the Custodial Agreement,  dated as of
the date hereof, among Borrower, Custodian and Lender, substantially in the form
of  Exhibit B hereto,  as the same shall be  modified  and  supplemented  and in
effect from time to time.


                                      -4-


<PAGE>



         "Custodial  Identification  Certificate"  shall  mean  the  certificate
executed by Borrower in  connection  with the pledge of Eligible  Collateral  to
Lender in the form of Annex 3 to the Custodial Agreement.

         "Custodian"  shall mean Bankers  Trust  Company as custodian  under the
Custodial Agreement, and its successors and permitted assigns thereunder.

         "Default"  shall mean an Event of Default or an event that with  notice
or lapse of time or both would become an Event of Default.

         "Diligence  Materials"  means the  Preliminary  Due  Diligence  Package
together with the materials requested in the Supplemental Due Diligence List.

         "Direct  Mortgage" means a recorded  mortgage or deed of trust in favor
of Lender on real property.

         "Dollars"  and "$" shall  mean  lawful  money of the  United  States of
America.

         "Drawdown Fee" shall mean, for each Loan with respect to any particular
item of  Eligible  Collateral,  an amount  equal to the product of 0.25% and the
principal  amount of such Loan;  provided,  however,  that (a) the  Drawdown Fee
shall be equal to zero to the extent  that such Loan is to be made with  respect
to a Conduit Loan as  Collateral  and (b) with respect to any other such item of
Eligible  Collateral,  borrowings which are repaid and  subsequently  reborrowed
will not be charged a subsequent Drawdown Fee.

         "Due Diligence  Review" shall mean the  performance by Lender of any or
all of the reviews  permitted  under Section 11.15 hereof with respect to any or
all of the Collateral, as desired by Lender from time to time.

         "Effective  Date"  shall  mean  the  date  upon  which  the  conditions
precedent set forth in Section 5.01 shall have been satisfied.

         "Eligible  Collateral"  shall mean  Mortgage  Loans,  Mezzanine  Loans,
Equity Interests and Other Approved  Collateral as to which the  representations
and warranties in Section 6.09 hereof are correct.

         "Equity  Interest"  shall mean any interest in a Person  constituting a
share  of  stock or a  partnership  or  membership  interest  or other  right or
interest in a Person not  characterized  as indebtedness  under GAAP (including,
without limitation, a preferred equity interest).

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.

         "ERISA  Affiliate" shall mean any corporation or trade or business that
is a member of any group of organizations (i) described in Section 414(b) or (c)
of the Code of which  Borrower  is a member  and (ii)  solely  for  purposes  of
potential  liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section  302(f) of ERISA and Section  412(n)
of the Code, described in Section 414(m) or (o) of the Code of which Borrower is
a member.

         "Eurocurrency  Reserve Requirements" shall mean, for any day as applied
to a Loan,  the aggregate  (without  duplication)  of the rates  (expressed as a
decimal  fraction)  of  reserve  requirements  in effect on such day  (including
without  limitation basic,  supplemental,  marginal and emergency reserves under
any regulations of the Board of Governors of the Federal Reserve System or other
Governmental  Authority having jurisdiction with respect thereto),  dealing with
reserve requirements  prescribed for eurocurrency funding (currently referred to
as  "Eurocurrency  Liabilities"  in Regulation D of such Board)  maintained by a
member bank of such Governmental Authority.


                                      -5-


<PAGE>



         "Eurodollar  Base Rate"  shall  mean,  with  respect to any  Eurodollar
Contract Period,  the rate per annum equal to the rate appearing at page 3750 of
the Telerate  Screen as 30 day LIBOR on such date, and if such rate shall not be
so quoted,  the rate per annum at which Lender is offered Dollar  deposits at or
about  10:00  A.M.,  New York  City  time,  on such  date by prime  banks in the
interbank  eurodollar  market where the eurodollar and foreign currency exchange
operations in respect of its Loans are then being conducted for delivery on such
day for a period of 30 days and in an  amount  comparable  to the  amount of the
Loans to be outstanding on such day.

         "Eurodollar  Contract  Period"  means,  with  respect to each Loan,  an
interest rate contract  period which shall commence on the first Business Day of
each calendar month during the term of this Agreement and which shall  terminate
on the day that  immediately  precedes the first  Business Day of the  following
month;  provided,  that: (a) Eurodollar  quotations for the period requested are
reasonably  available  to Lender in the  Eurodollar  market for such  Eurodollar
Contract  Period;  (b) in no event shall a  Eurodollar  Contract  Period  extend
beyond the Termination Date; and (c) the initial Eurodollar Contract Period with
respect to each  Asset-Specific  Loan  Balance  shall  commence  on the  related
Funding Date and shall terminate on the day that immediately  precedes the first
Business Day of the following month.

         "Eurodollar  Rate"  shall  mean,  with  respect  to each  day a Loan is
outstanding,  a rate per annum  determined  by Lender in its sole  discretion in
accordance with the following formula (rounded upwards to the nearest 1/100th of
one percent),  which rate as  determined  by Lender shall be  conclusive  absent
manifest error by Lender:

                              Eurodollar Base Rate
                    ------------------------------------------
                         1.00 minus Eurocurrency Reserve
                                  Requirements

         "Eurodollar  Rate  Spread"  means  (A)  as to  each  Advance  Rate  the
applicable Eurodollar Rate Spread set forth below opposite such Advance Rate for
the applicable  Collateral  type, or such other Eurodollar Rate Spread as may be
mutually agreed to by Borrower and Lender:
<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------------
                                                                                      Eurodollar Rate Spread (expressed as
                                                                                       percentage points per annum and as
Collateral Type                                                 Advance Rate                      basis points)
--------------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                 <C>                 <C>
Conduit Loan                                                            90%                 1.25%               125bp
--------------------------------------------------------------------------------------------------------------------------
Non-Conduit Loans (limited to 90% LTV maximum)
      First Mortgage (75% LTV maximum)                                  85%                 1.75%               175bp

--------------------------------------------------------------------------------------------------------------------------
      Subordinate Mortgage Loans, Mezzanine
      Loans, CMBS and Equity Interests*                                 70%                 2.25%               225bp


--------------------------------------------------------------------------------------------------------------------------
</TABLE>

*     Solely for  illustrative  purposes,  Borrower  and  Lender  agree that the
      following example of a transaction  illustrates their intent: with respect
      to an item of  Collateral  that is a First  Mortgage  Loan for  which  the
      appraised value of the underlying real property is $100,000,000,  on which
      a  First  Mortgage  Loan  has  been  made  in  the  aggregate   amount  of
      $80,000,000,   with  Lender   advancing   hereunder   85%  of  a  75%  LTV
      ($63,750,000), plus 70% of the remaining 5% LTV (70% of $15,000,000 equals
      $3,500,000),  the  aggregate  loans from  Lender to  Borrower  would equal
      $67,250,000,  resulting  in a 84.06%  underlying  loan-to-loan  value.  In
      addition,  Lender will finance  non-conduit  loans  originated by Borrower
      with an aggregate underlying LTV up to 90% and above 90% on a case-by-case
      basis. The Eurodollar Rate Spread may exceed the levels set forth above on
      loans with underlying LTVs in excess of 90%.

and (B) notwithstanding anything set forth in clause (A) to the contrary, in the
event the Termination Date shall be extended  pursuant to the terms hereof,  for
the period from and after the First Anniversary to, and including,  the date the
Loans are repaid in full, as to each Advance Rate the sum of (x) the  applicable
Eurodollar  Rate Spread set forth  opposite such Advance Rate for the applicable
Collateral type in clause (A) above,  plus (y) .25 percent,  or 25 basis points,
per annum.


                                      -6-


<PAGE>


         "Eurodollar  Substitute Rate" means a rate of interest equal to (a) the
Base Rate minus (b) Two and  eighty-five  hundredths  percent  (2.85%) per annum
(285 basis points).

         "Event of Default" shall have the meaning provided in Section 8 hereof.

         "Federal Funds Rate" shall mean,  for any day, the weighted  average of
the rates on overnight  federal funds  transactions  with members of the Federal
Reserve  System  arranged by federal  funds  brokers,  as  published on the next
succeeding  Business Day by the Federal  Reserve  Bank of New York,  or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations  for the day of such  transactions  received  by  Lender  from  three
federal funds brokers of recognized standing selected by Lender.

         "First  Anniversary"  shall mean the date that is the first anniversary
of the date hereof.

         "First  Mortgage  Exclusion"  shall mean 87% of the Aggregate  Imbedded
First Mortgage Component.

         "Funding Costs" shall mean, collectively, the actual costs to Lender of
breaking a Eurodollar contract (or costs that would have been incurred if Lender
had entered  into and broken a Eurodollar  contract  for a  Eurodollar  Contract
Period as requested  by  Borrower)  prior to the  expiration  of the  Eurodollar
Contract  Period  applicable  thereto  in  connection  with  (a) any  prepayment
(whether  voluntary or involuntary)  of all or any portion of an  Asset-Specific
Loan  Balance or other  principal  repayments  required or  permitted  under the
Security Documents, that is made at any time other than at the expiration of the
related   Eurodollar   Contract   Period,   (b)  any  voluntary  or  involuntary
acceleration of the Termination  Date, such that the Termination  Date occurs on
any date that is not the expiration date of the Eurodollar  Contract Period with
respect  to  any  Asset-Specific  Loan  Balance,   and  (c)  any  other  set  of
circumstances  not  attributable   solely  to  Lender's  acts.  Subject  to  the
foregoing,  Funding Costs shall not include any  diminution in yield suffered by
Lender upon  re-lending  or  re-investing  the  principal  of the Loan after any
prepayment of the Loan.

         "Funding Date" shall mean the date on which a Loan is made hereunder.

         "GAAP" shall mean generally accepted accounting principles consistently
applied as in effect from time to time in the United States.

         "Governmental Authority" shall mean any nation or government, any state
or  other  political  subdivision  thereof,  any  entity  exercising  executive,
legislative,  judicial,  regulatory or administrative functions of or pertaining
to government and any court or arbitrator  having  jurisdiction over any obligor
on  any  underlying  loan,  Borrower,  any  of  its  Subsidiaries  or any of its
properties.

         "GREMII" shall mean Travelers General Real Estate Mezzanine Investments
II,  LLC, a  Delaware  limited  liability  company  and a member of the  general
partner of CT Mezz II.

         "Guarantee" shall mean, as to any Person, any obligation of such Person
directly or indirectly  guaranteeing  any Indebtedness of any other Person or in
any manner  providing for the payment of any Indebtedness of any other Person or
otherwise  protecting the holder of such  Indebtedness  against loss (whether by
virtue of  partnership  arrangements,  by  agreement to  keep-well,  to purchase
assets, goods, securities or services, or to take-or-pay or otherwise); provided
that the term  "Guarantee"  shall not include (i) endorsements for collection or
deposit  in the  ordinary  course  of  business,  or  (ii)  obligations  to make
servicing  advances for delinquent  taxes and insurance or other  obligations in
respect of a Mortgaged Property, to the extent required by Lender. The amount of
any Guarantee of a Person shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
is made or, if not stated or determinable,  the maximum  reasonably  anticipated
liability in respect  thereof as  determined  by such Person in good faith.  The
terms  "Guarantee"  and  "Guaranteed"  used  as  verbs  shall  have  correlative
meanings.



                                      -7-


<PAGE>


         "Imbedded First Mortgage  Component"  shall mean 75% of the Asset Value
of the Eligible  Collateral pledged to Lender in connection with each Loan as of
the date of such  calculation,  which calculation shall be made on an individual
Loan by Loan basis.

         "Initial Borrower" has the meaning set forth in the heading hereto.

         "Indebtedness"  shall mean, for any Person:  (a)  obligations  created,
issued or incurred  by such  Person for  borrowed  money  (whether by loan,  the
issuance and sale of debt  securities or the sale of Property to another  Person
subject to an understanding or agreement, contingent or otherwise, to repurchase
such  Property  from such  Person);  (b)  obligations  of such Person to pay the
deferred purchase or acquisition price of Property or services, other than trade
accounts  payable (other than for borrowed money) arising,  and accrued expenses
incurred,  in the  ordinary  course of business  so long as such trade  accounts
payable  are  payable  within  90 days of the  date  the  respective  goods  are
delivered or the respective  services are rendered;  (c)  Indebtedness of others
secured by a Lien on the Property of such Person,  whether or not the respective
Indebtedness  so  secured  has been  assumed  by such  Person;  (d)  obligations
(contingent  or  otherwise)  of such  Person in  respect of letters of credit or
similar instruments issued or accepted by banks and other financial institutions
for account of such Person;  (e) Capital Lease  Obligations of such Person;  (f)
obligations of such Person under repurchase agreements or like arrangements; (g)
Indebtedness  of others  Guaranteed by such Person;  (h) all obligations of such
Person  incurred in connection  with the acquisition or carrying of fixed assets
by such  Person;  and (i)  Indebtedness  of general  partnerships  of which such
Person is a general partner.

         "Interest Rate Protection Agreement" shall mean, with respect to any or
all of the Mortgage  Loans and  Mezzanine  Loans,  any short sale of US Treasury
Securities,  or futures contract,  or mortgage related  security,  or Eurodollar
futures  contract,  or options related  contract,  or interest rate swap, cap or
collar  agreement  or similar  arrangements  providing  for  protection  against
fluctuations in interest rates or the exchange of nominal interest  obligations,
either generally or under specific contingencies, entered into by any obligor on
any  underlying  loan or Borrower  (specifically  with  respect to such items of
Collateral) and acceptable to Lender.

         "Investment  Management  Agreement"  shall  mean that  certain  Fund II
Investment  Management  Agreement  dated as of April 9, 2001 between  CTIMCO and
Initial  Borrower,  as may be  amended  from time to time with the  approval  of
Lender.

         "Lender" shall have the meaning provided in the heading hereto.

         "Lien" shall mean any  mortgage,  lien,  pledge,  charge,  encumbrance,
security interest or adverse claim.

         "Loan" and "Loans" shall have the meanings  provided in Section 2.01(a)
hereof.

         "Loan Agreement" shall mean this Master Loan and Security Agreement, as
the same may be amended, supplemented or otherwise modified from time to time.

         "Loan Documents"  shall mean,  collectively,  this Loan Agreement,  the
Note, The Parent Guaranty and the Custodial Agreement.

         "LTV" shall mean, as to any Eligible Collateral, the ratio that (x) the
aggregate   outstanding   principal  balances  of  all  loans  (including  Loans
hereunder) and preferred  equity  interests  secured in whole or in part by real
property or direct or indirect  beneficial  interests  therein  relating to such
Eligible  Collateral  bears  to  (y)  the  value,  determined  by  an  Appraisal
reasonably  acceptable  to  Lender,  of the  real  property  (together  with all
applicable   appurtenant   interests  and  subject  to  all  applicable   liens,
encumbrances and tenancies),  or direct or indirect  beneficial  interests which
form the basis of such Eligible Collateral.

         "Material  Adverse Effect" shall mean a material  adverse effect on (a)
the Property, business, operations, financial condition or prospects of Borrower
taken as a whole, (b) the ability of



                                      -8-


<PAGE>



Borrower to perform its obligations  under any of the Loan Documents to which it
is a party, (c) the validity or enforceability of any of the Loan Documents, (d)
the rights  and  remedies  of Lender  under any of the Loan  Documents,  (e) the
timely  payment of the  principal  of or interest on the Loans or other  amounts
payable in connection therewith or (f) the aggregate value of the Collateral.

         "Maximum  Advance  Rate"  shall  mean,  as  to  any  item  of  Eligible
Collateral,  the  maximum  Advance  Rate that shall be  determined  by Lender in
Lender's  sole and  absolute  discretion;  provided,  that,  with respect to the
specific  categories  of Eligible  Collateral  referred to in the  definition of
Eurodollar Rate Spread, the Maximum Advance Rate shall not exceed the respective
Advance Rates set forth in such definition.

         "Maximum  Credit" shall mean Two Hundred  Twenty-Five  Million  Dollars
($225,000,000.00) or such increased or decreased amount as may be permitted,  or
otherwise required, pursuant to Section 2.02 (a).

         "Mezzanine  Loan"  shall  mean a loan  secured  by a pledge  of  Equity
Interests  in one  or  more  entities  holding  direct  or  indirect  beneficial
interests  in an  entity  owning  (or  having  a  ground  lease  interest  in) a
commercial or multi-family residential property, preferred equity interests or a
second mortgage.

         "Monthly  Statement"  shall mean,  for each calendar month during which
this Loan Agreement shall be in effect,  Borrower's reconciliation in arrears of
beginning balances,  interest,  principal,  paid-to-date and ending balances for
each  asset  constituting  the  Collateral,   together  with  (a)  an  Officer's
Certificate  with respect to all  Collateral  pledged to Lender as at the end of
such  month,  (b) a  written  report  of any  developments  or  events  that are
reasonably likely to have a Material Adverse Effect, (c) a written report of any
and  all  written  modifications  to  any  documents  underlying  any  items  of
Collateral and (d) such other internally  prepared reports as mutually agreed by
Borrower  and Lender which  reconciliation,  Officer's  Certificate  and reports
shall be  delivered  to Lender for each  calendar  month during the term of this
Loan  Agreement  within ten (10) days  following  the end of each such  calendar
month.

         "Mortgage"  shall mean the mortgage,  deed of trust or other instrument
securing a Mortgage  Note,  which  creates a valid lien on the fee or  leasehold
interest in real property securing the Mortgage Note and the assignment of rents
and leases related thereto.

         "Mortgage  Loan"  shall  mean  a  mortgage  loan  (including,   without
limitation,  a Conduit  Loan) which  Custodian  has been  instructed to hold for
Lender  pursuant to the Custodial  Agreement,  and which Mortgage Loan includes,
without  limitation,  (i) the  indebtedness  evidenced  by a  Mortgage  Note and
secured by a related Mortgage and (ii) all right, title and interest of Borrower
in and to the Mortgaged Property covered by such Mortgage.

         "Mortgage  Note" shall mean the original  executed  promissory  note or
other  evidence of the  indebtedness  of a mortgagor  with respect to a Mortgage
Loan.

         "Mortgaged  Property"  shall  mean the  real  property  (including  all
improvements,  buildings,  fixtures,  building  equipment and personal  property
thereon and all additions,  alterations and  replacements  made at any time with
respect to the foregoing)  and all other  Collateral  securing  repayment of the
debt evidenced by a Mortgage Note.

         "MS & Co." shall mean Morgan Stanley & Co.  Incorporated,  a registered
broker-dealer.

         "MS Indebtedness" shall mean all Indebtedness from time to time owed by
Borrower to Lender or any  Affiliate of Lender  including,  without  limitation,
under this Loan Agreement,  the CMBS Loan Agreement,  or any repurchase or other
agreement between Lender, or an Affiliate of Lender, and Borrower.


                                      -9-


<PAGE>


         "Multiemployer Plan" shall mean a multiemployer plan defined as such in
Section  3(37) of ERISA to which  contributions  have been or are required to be
made by  Borrower  or any ERISA  Affiliate  and that is  covered  by Title IV of
ERISA.

         "'Non-Table'  Funded  Eligible  Collateral"  shall  mean  the  items of
Eligible Collateral as described in Section 2.03(e) of this Loan Agreement.

         "Note" shall mean the promissory  note provided for by Section  2.02(a)
hereof for Loans and any promissory  note delivered in  substitution or exchange
therefor, in each case as the same shall be modified,  amended,  supplemented or
extended and in effect from time to time.

         "Officer's  Certificate"  shall mean the  certificate  of a Responsible
Officer as set forth in Section 5.02(b) hereof.

         "Other Approved  Collateral" shall mean such other Property of Borrower
as Lender shall accept as Collateral for the Loans.

         "Parent Guaranty" shall mean that certain Parent Guaranty dated of even
date herewith executed by the CT Mezz II for the benefit of Lender.

         "Payment  Date"  shall  mean,  with  respect  to each  Loan,  the first
Business Day of each calendar month following the related Funding Date.

         "PBGC"  shall mean the  Pension  Benefit  Guaranty  Corporation  or any
entity succeeding to any or all of its functions under ERISA.

         "Person" shall mean any  individual,  corporation,  company,  voluntary
association,  partnership,  joint venture,  limited  liability  company,  trust,
unincorporated  association  or government  (or any agency,  instrumentality  or
political subdivision thereof).

         "Plan"  shall mean an  employee  benefit or other plan  established  or
maintained by Borrower or any ERISA Affiliate  during the five-year period ended
immediately  before the date of this Loan  Agreement or to which Borrower or any
ERISA Affiliate  makes, is obligated to make or has, within the five-year period
before the date of this Loan Agreement,  been required to make contributions and
that is covered  Title IV of ERISA or Section 302 of ERISA or Section 412 of the
Code, other than a Multiemployer Plan.

         "Post-Default Rate" shall mean, in respect of any principal of any Loan
or any other  amount  under  this  Loan  Agreement,  the Note or any other  Loan
Document  that is not paid when due to Lender  (whether at stated  maturity,  by
acceleration,  by optional or mandatory  prepayment  or  otherwise),  a rate per
annum during the period from and  including  the due date to but  excluding  the
date on which  such  amount is paid in full  equal to 4% per annum plus the Base
Rate.

         "Preliminary Due Diligence  Package" means with respect to any proposed
Collateral,  the following due diligence  information  relating to such proposed
Collateral to be provided by Borrower to Lender pursuant to this Loan Agreement:

         (i)   a  summary   memorandum   outlining  the  proposed   transaction,
               including  potential   transaction   benefits  and  all  material
               underwriting   risks,  all  Underwriting  Issues  and  all  other
               characteristics of the proposed transaction that a prudent lender
               would consider material;

         (ii)  current rent roll, if applicable;

         (iii) cash flow pro-forma, plus historical information, if available;

         (iv)  description of the property (real property, pledged loan or other
               Collateral);

         (v)   indicative debt service coverage ratios;


                                      -10-


<PAGE>



         (vi)  indicative loan-to-value ratio;

         (vii) Borrower's  or any  affiliate's  relationship  with its potential
               underlying borrower or any affiliate;

         (viii)if applicable,  Phase I environmental  report (including asbestos
               and lead paint report);

         (ix)  if applicable, engineering and structural reports;

         (x)   third party  reports,  to the extent  available  and  applicable,
               including:

               (a) current Appraisal;

               (b) Phase  II  or  other   follow-up   environmental   report  if
                   recommended in Phase I;

               (c) seismic reports; and

               (d) operations  and  maintenance  plan with  respect to  asbestos
                   containing materials;

         (xi)  analyses  and  reports   with  respect  to  such  other   matters
               concerning  the  Collateral as Lender may in its sole  discretion
               require;

         (xii) documents comprising such Collateral,  or current drafts thereof,
               including,  without  limitation,  underlying  debt  and  security
               documents,   guaranties,   underlying  borrower's  organizational
               documents,  warrant  agreements,  and loan and collateral  pledge
               agreements, as applicable; and

         (xiii)a list that specifically and expressly  identifies any Collateral
               Documents  that  relate  to  such   Collateral  but  are  not  in
               Borrower's possession.

         "Property"  shall mean any right or  interest  in or to property of any
kind  whatsoever,  whether  real,  personal  or mixed and  whether  tangible  or
intangible.

         "Regulations T, U and X" shall mean Regulations T, U and X of the Board
of Governors of the Federal Reserve System (or any  successor),  as the same may
be modified and supplemented and in effect from time to time.

         "Responsible Officer" shall mean, as to any Person, the chief executive
officer,  any vice chairman and the chief  financial  officer of such Person or,
for the purpose of executing certificates, the president, the vice president and
counsel responsible therefor.

         "Secured  Obligations"  shall  have the  meaning  provided  in  Section
4.01(a) hereof.

         "Security Documents" means this Loan Agreement, the Note, and all other
agreements, instruments, certificates and documents delivered by or on behalf of
Borrower to evidence or secure the Loan(s) or otherwise in  satisfaction  of the
requirements of this Loan Agreement, or the other documents listed above as same
may be amended or modified from time to time.

         "Servicer" shall have the meaning provided in Section 11.14(c) hereof.

         "Servicing  Agreement"  shall  have the  meaning  provided  in  Section
11.14(c) hereof.

         "Servicing Records" shall have the meaning provided in Section 11.14(b)
hereof.

         "Subsidiary"  shall mean, with respect to any Person,  any corporation,
partnership  or other entity of which at least a majority of the  securities  or
other ownership  interests  having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons  performing  similar
functions of such  corporation,  partnership  or other entity  (irrespective  of
whether or not at the

                                      -11-


<PAGE>




time  securities or other  ownership  interests of any other class or classes of
such  corporation,  partnership  or other entity shall have or might have voting
power by reason of the happening of any  contingency) is at the time directly or
indirectly  owned or  controlled by such Person or one or more  Subsidiaries  of
such Person or by such Person and one or more Subsidiaries of such Person.

         "Supplemental  Due Diligence List" means,  with respect to any proposed
Collateral,  information or deliveries concerning such proposed Collateral, such
items that Lender shall  request in addition to the  Preliminary  Due  Diligence
Package including, without limitation, a credit approval memorandum representing
the final terms of the underlying transaction, a final LTV ratio computation and
a final debt service coverage ratio computation for such proposed Collateral.

         "'Table Funded' Eligible  Collateral"  shall mean the items of Eligible
Collateral as described in Section 2.03(e) of this Loan Agreement.

         "Termination  Date" shall mean the First  Anniversary  or such  earlier
date on which  this  Loan  Agreement  shall  terminate  in  accordance  with the
provisions hereof or by operation of law; provided,  however,  that in the event
that (i) this  Agreement  shall not have  been  earlier  terminated  and (ii) no
Default  shall have occurred and be  continuing  on the First  Anniversary,  the
Termination  Date shall be  automatically  extended to the date that is nine (9)
months after the First Anniversary.

         "Title Insurance  Policy" shall mean, with respect to any real property
underlying a Collateral  Loan, a mortgagee's  title insurance policy or policies
issued to Lender and Lender's  successors and assigns (or,  subject to the prior
written approval of Lender,  an endorsement to Borrower's title insurance policy
insuring the collateral  assignment to Lender of the applicable mortgage) by one
or more title  companies  reasonably  satisfactory  to Lender,  which  policy or
policies shall be in form and substance  reasonably  acceptable to Lender,  with
such  endorsements as Lender shall  reasonably  require and, with respect to any
Collateral  Loan, a mortgagee's  title  insurance  policy or policies  issued to
Lender and Lender's  successors  and/or  assigns by one or more title  companies
reasonably   satisfactory  to  Lender  reflecting   Lender's  interest  in  such
Collateral Loan.

         "Total Adjusted Indebtedness" shall mean, for any period, the aggregate
Indebtedness  of  Borrower  during  such  period  less  (i)  the  amount  of any
nonspecific  balance sheet reserves  maintained in accordance with GAAP and (ii)
the First Mortgage Exclusion.

         "Total   Indebtedness"  shall  mean,  for  any  period,  the  aggregate
Indebtedness  of Borrower  during such period less the amount of any nonspecific
balance sheet reserves maintained in accordance with GAAP.

         "Transaction  Costs" shall mean,  with respect to any Loan,  all actual
out-of-pocket  reasonable  costs and  expenses  paid or  incurred  by Lender and
payable by Borrower  relating to the making of such Loan  (including  legal fees
and other fees  described in Section  11.03  hereof).  Lender shall  endeavor to
limit the  Transaction  Costs  associated  with such Loan (excluding the initial
Loan) to $5,000,  but the foregoing shall not limit Borrower's  obligations with
respect to Transaction  Costs or constitute a "cap" on Transaction Costs for any
Loan.  Transaction Costs shall not include costs incurred by Lender for overhead
and general administrative expenses.

         "Treasury  Regulations"  shall mean the  regulations  prescribed by the
Secretary of the Department of the Treasury with the authority granted under the
Code, as may be necessary to carry out the purposes of the Code, as amended from
time to time.

         "Trust Receipt" shall mean the receipt delivered by Custodian  pursuant
to the provisions of Section 4 of the Custodial Agreement  acknowledging receipt
of a Collateral  File in connection with a Loan hereunder in the form of Annex 2
to the Custodial Agreement.

         "Underwriting  Issues" means with respect to any Collateral as to which
Borrower  intends to request a Loan, all information that has come to Borrower's
attention,  based on the making of  reasonable  inquiries  and the  exercise  of
reasonable care and diligence under the circumstances, which would be considered
a materially "negative" factor (either separately or in the aggregate with other

                                      -12-


<PAGE>




information),  or a material defect in loan  documentation or closing deliveries
(such as any absence of any material  Collateral  Document(s)),  to a reasonable
institutional  lender  in  determining  whether  to  originate  or  acquire  the
Collateral in question.

         "Uniform  Commercial Code" shall mean the Uniform Commercial Code as in
effect on the date hereof in the State of New York;  provided  that if by reason
of mandatory  provisions  of law, the  perfection or the effect of perfection or
non-perfection  of the security  interest in any  Collateral  is governed by the
Uniform  Commercial  Code as in effect in a  jurisdiction  other  than New York,
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in effect in
such other  jurisdiction for purposes of the provisions  hereof relating to such
perfection or effect of perfection or non-perfection.

         "Wholly-Owned  Subsidiary" shall mean, with respect to any Person,  any
corporation,  partnership  or other  entity of which 100% of the  securities  or
other ownership  interests  having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons  performing  similar
functions  of such  corporation,  partnership  or  other  entity  is at the time
directly  or  indirectly  owned  or  controlled  by such  Person  or one or more
Subsidiaries  of such Person or by such Person and one or more  Subsidiaries  of
such Person.

         1.02 Accounting Terms and Determinations. Except as otherwise expressly
provided herein, all accounting terms used herein shall be interpreted,  and all
financial  statements  and  certificates  and  reports as to  financial  matters
required to be delivered to Lender  hereunder  shall be prepared,  in accordance
with GAAP.

         Section 2. Loans, Note and Prepayments.
                    ---------------------------

         2.01 Loans.
              -----

         (a) Lender agrees to consider,  as provided  herein,  from time to time
Borrower's  requests that Lender make, on the terms and  conditions of this Loan
Agreement, loans (each, individually,  a "Loan" and, collectively,  the "Loans")
to Borrower in Dollars,  from and including the Effective  Date to and including
the  First  Anniversary,  in an  aggregate  principal  amount  at any  one  time
outstanding up to but not exceeding the Maximum Credit as in effect from time to
time.  Nothing in this Loan  Agreement  shall be  interpreted as a commitment by
Lender to make any Loans,  but rather  sets forth the  procedures  to be used in
connection with periodic  requests for Loans and the conditions to the making of
any Loans.  Borrower hereby  acknowledges  that Lender is under no obligation to
agree to make, or to make, any Loan pursuant to this Loan Agreement.

         (b) Subject to the terms and conditions of this Loan Agreement,  during
such period Borrower may borrow, prepay and reborrow hereunder.

         2.02 Notes.
              -----

         The Loans made by Lender shall be evidenced by a single promissory note
of  Borrower  substantially  in the form of  Exhibit  A  hereto,  dated the date
hereof,  payable to Lender in the  principal  amount of Two Hundred  Twenty-Five
Million Dollars ($225,000,000.00),  as otherwise duly completed. Notwithstanding
the foregoing,  provided that no Default or Event of Default shall have occurred
and be continuing hereunder or under any Affiliate Credit Facility, Borrower may
request,  on no less than ten (10) Business Days prior written notice  delivered
to Lender, that the aggregate credit available to Borrower hereunder,  under the
CMBS Loan Agreement and under any Affiliate Credit Facility be reallocated among
such credit agreements;  provided,  however,  that in no event shall the Maximum
Credit  plus (i) the  Maximum  Credit  (as such term is defined in the CMBS Loan
Agreement) under the CMBS Loan Agreement plus (ii) the aggregate  Maximum Credit
(as such term is defined in any Affiliate  Credit  Facility)  under any existing
Affiliate    Credit    Facility,    exceed   Four   Hundred    Million   Dollars
($400,000,000.00).  In the event (i) that the  Maximum  Credit is  increased  or
decreased as a result of a reallocation  of the Maximum Credit  available  under
any  Affiliate  Credit  Facility  or  (ii)  of the  existence  of an  Additional
Borrower,  Borrower shall deliver to Lender a substitute  Note  evidencing  such
increase,  decrease or addition of an Additional Borrower. Lender shall have the
right to have its Note  subdivided,


                                      -13-


<PAGE>



by exchange for promissory notes of lesser  denominations or otherwise and shall
have the right to sell participating interests in such Note; provided,  however,
that Lender must retain (i) in excess of fifty percent (50%) ownership  interest
in the Note and (ii) control over all decisions with respect to loan pricing and
the exercise of remedies with respect to each item of Collateral;  and provided,
further,  however,  that Lender may subject up to one hundred  percent (100%) of
the Loans made hereunder to a repurchase agreement.

         (a) The date,  amount and interest  rate of each Loan made by Lender to
Borrower,  and each payment made on account of the principal  thereof,  shall be
recorded by Lender on its books and, prior to any transfer of the Note, endorsed
by Lender on the  schedule  attached  to the Note or any  continuation  thereof;
provided that the failure of Lender to make any such  recordation or endorsement
shall not affect the  obligations  of Borrower to make a payment when due of any
amount owing hereunder or under the Note in respect of the Loans.

         2.03 Procedures for Borrowing.
              ------------------------

         (a) Preliminary Approval of Proposed Collateral.

             (i) Borrower may, from time to time, submit to Lender a Preliminary
     Due Diligence  Package for Lender's review and approval in order to request
     a borrowing hereunder with respect to any proposed Collateral that Borrower
     proposes to pledge to Lender and to be included  in the  Borrowing  Base in
     connection with such borrowing.

             (ii) Upon Lender's receipt of a complete  Preliminary Due Diligence
     Package,  Lender  within  two (2)  Business  Days  shall  have the right to
     request,  in Lender's sole and absolute  discretion,  additional  diligence
     materials and deliveries  that Lender shall specify on a  Supplemental  Due
     Diligence List. Upon Lender's receipt of all of the Diligence  Materials or
     Lender's  waiver  thereof,  Lender,  within five (5) Business  Days,  shall
     either (i) notify  Borrower of the Maximum  Advance Rate (which may be less
     than the  Advance  Rate set  forth in the  definition  of  Eurodollar  Rate
     Spread) and the Asset Value for the proposed  Collateral  or (ii) deny,  in
     Lender's sole and absolute  discretion,  Borrower's request for an advance.
     Lender's  failure to respond to  Borrower  within  five (5)  Business  Days
     following  receipt of all Diligence  Materials or Lender's  written  waiver
     thereof  shall  be  deemed  to be a denial  of  Borrower's  request  for an
     advance,  unless  Lender and  Borrower  have agreed  otherwise  in writing.
     Nothing in this Section  2.03(a)(ii)  or  elsewhere in this Loan  Agreement
     shall,  or be deemed  to,  prohibit  Lender  from  determining  in its sole
     discretion  the  adequacy,  correctness  and  appropriateness  of,  or from
     disapproving, any and all financial and other underwriting data required to
     be supplied by Borrower under this Loan Agreement.

             (iii) Notwithstanding anything to the contrary contained herein, in
     the event that any  Preliminary Due Diligence  Package  submitted to Lender
     pursuant  to this  Section  2.03  shall  pertain to  Collateral  owned by a
     Wholly-Owned Subsidiary of Borrower, Lender may condition any determination
     of the Asset Value and any  approval  of the  applicable  advance  upon the
     modification of the Loan Documents to include such Wholly-Owned  Subsidiary
     (each,  an  "Additional  Borrower")  as an  Additional  Borrower  under the
     applicable Loan Documents.

         (b) Final Approval of Proposed Collateral.  Upon Lender's  notification
to  Borrower of the Maximum  Advance  Rate and the Asset Value for any  proposed
Collateral,  Borrower shall, if Borrower  desires to obtain one or more advances
secured by such proposed Collateral,  satisfy the conditions set forth below (in
addition to satisfying  the conditions  precedent to obtaining each advance,  as
set forth in  Section 5 of this  Loan  Agreement)  as  conditions  precedent  to
Lender's  approval of such proposed  Collateral as Collateral,  all in a manner,
and pursuant to  documentation,  satisfactory  in all respects to Lender and its
counsel:

             (i) Environmental and Engineering. If applicable, Lender shall have
     received an Environmental  Report and an Engineering  Report,  each in form
     and  substance


                                      -14-


<PAGE>



     satisfactory to Lender, by an Engineer and Environmental  Consultant listed
     on Schedules 3 and 4 attached hereto,  respectively,  as each such schedule
     may be amended from time to time by Lender in its reasonable discretion.

             (ii)  Appraisal.  If  applicable,  Lender  shall have  received  an
     Appraisal.

             (iii) Insurance.  With respect to proposed  Collateral that is real
     property,  Lender shall have  received  certificates  or other  evidence of
     insurance demonstrating insurance coverage in respect of such real property
     of types,  in amounts,  with insurers and otherwise in compliance  with the
     terms,  provisions and conditions set forth in the Collateral  Documents or
     the Security Documents.  Such certificates or other evidence shall indicate
     Borrower, as lender, will be named as an additional insured as its interest
     may appear  and shall  contain a loss  payee  endorsement  in favor of such
     additional  insured with respect to the  property  policies  required to be
     maintained under the Collateral Documents.

             (iv) Survey.  With respect to a Mortgage  Loan, a Mezzanine Loan or
     an Equity Interest,  to the extent obtained by Borrower from the Collateral
     Obligor with respect to any item of  Collateral at the  origination  of the
     underlying loan or equity interest,  as the case may be, relating  thereto,
     Lender shall have received with respect to proposed Collateral that is real
     property,  a current Survey of such real property in a form satisfactory to
     Lender.

             (v) Lien  Search  Reports.  Lender or Lender's  counsel  shall have
     received,  as reasonably requested by Lender,  satisfactory reports of UCC,
     tax lien,  judgment and litigation  searches and title reports and updates,
     as applicable,  conducted by search firms and/or title companies acceptable
     to  Lender  with  respect  to the  Collateral,  Borrower  and  the  related
     underlying  obligor,  such searches to be conducted in each location Lender
     shall reasonably designate.

             (vi) Title Insurance Policy.

                  (A) With  respect  to a  Mortgage  Loan,  Borrower  shall have
             delivered to Lender (1) an unconditional  commitment to issue title
             insurance  policies  in favor of  Lender  and  Lender's  successors
             and/or  assigns  with  respect to Lender's  interest in the related
             real  property  with an amount of insurance  that shall be not less
             than the related  Asset-Specific  Loan Balance (taking into account
             the proposed  advance) or such other amount as Lender shall require
             in its sole discretion or (2) an endorsement or confirmatory letter
             from the existing  title  company to the existing  Title  Insurance
             Policy in favor of Lender and Lender's  successors  and/or  assigns
             that amends the existing title insurance policy by stating that the
             amount of the insurance is no less than the related  Asset-Specific
             Loan Balance  (taking  into  account the proposed  advance) or such
             other amount of title  coverage as Lender shall require in its sole
             discretion.

                  (B) With  respect to a Mezzanine  Loan or an Equity  Interest,
             Borrower  shall have delivered to Lender such evidence as Lender on
             a case-by-case basis, in its sole discretion,  shall require of the
             ownership of the real property  underlying  such item of Collateral
             including,  without limitation,  a copy of a title insurance policy
             dated a date,  and by a title insurer,  in each case  acceptable to
             Lender in its sole discretion,  showing that title is vested in the
             related  Collateral Obligor or in an entity in whom such Collateral
             Obligor holds a beneficial interest.

             (vii)  Security   Documents.   Borrower  shall  have  executed  and
     delivered to Lender,  in form and substance  satisfactory to Lender and its
     counsel,  all security documents  perfecting  Lender's security interest in
     the proposed  Collateral  (and in any Interest Rate  Protection  Agreements
     held by Borrower with respect  thereto)  which shall be subject to no Liens
     except as  expressly  permitted by Lender.  Each of the security  documents
     shall contain such

                                      -15-


<PAGE>



     representations and warranties  concerning the proposed Collateral and such
     other terms as shall be reasonably satisfactory to Lender.

             (viii) Opinions of Counsel. Lender shall have received from counsel
     to Borrower its legal opinion as to  enforceability of this Loan Agreement,
     the substitute  Note (if  applicable),  the matters that are the subject of
     the opinion  delivered  pursuant to Section  5.04 hereof and all  documents
     executed and delivered hereunder in connection with such Loan, (at Lender's
     option) an opinion  from local  counsel  where the  applicable  property is
     located  and an opinion to Borrower  and its  successors  and assigns  from
     counsel to the underlying  obligor on the underlying loan  transaction,  as
     applicable,  as to  enforceability  of the loan  documents  governing  such
     transaction  and such other  matters as Lender  shall  require  (including,
     without limitation,  opinions as to due formation, authority, choice of law
     and  perfection  of  security  interests).  Such  legal  opinions  shall be
     addressed  to Lender and its  successors  and  assigns,  dated the  related
     Funding Date, and in form and substance reasonably satisfactory to Lender.

             (ix)  Additional  Real Estate  Matters.  To the extent  obtained by
     Borrower from the Collateral  Obligor relating to any item of Collateral at
     the origination of the underlying loan or equity interest relating thereto,
     Borrower  shall have  delivered  to Lender such other real  estate  related
     certificates and  documentation as may have been requested by Lender,  such
     as (i)  certificates of occupancy and letters  certifying that the property
     is  in  compliance  with  all  applicable   zoning  laws,  each  issued  by
     appropriate  Governmental  Authority  and (ii)  abstracts  of all Leases in
     effect at the real property relating to such Collateral.

             (x)  Additional  Borrower.  Lender shall have received a substitute
     Note evidencing the addition of any Additional Borrower owning the proposed
     Collateral and naming Additional Borrower as obligor  thereunder,  and such
     modifications  to the other Loan  Documents  as Lender  shall  require.  In
     addition,  each of the conditions  precedent  contained in Section 5 hereof
     shall have been satisfied  with respect to each  Additional  Borrower,  the
     addition of each applicable  Additional  Borrower shall not cause a default
     by Borrower under any term, covenant, condition, representation or warranty
     hereunder,  and Lender  shall  have  received  such other  representations,
     warranties,  certificates,  documents  and  opinions  with  respect to each
     Additional  Borrower  as  Lender  shall,  in  its  sole  discretion,   deem
     satisfactory.

             (xi)  Other  Documents.  Lender  shall  have  received  such  other
     documents  as Lender or its counsel  shall  request with respect to each or
     any item of Collateral.

         (c) Collateral  Approval or  Disapproval.  Within two (2) Business Days
following  the  date  upon  which  Borrower  has  tendered  performance  of  the
conditions enumerated in Sections 2.03(b)(i) through (xi), or has delivered such
items or documents fully executed,  if applicable,  in final form,  Lender shall
either (i) if the Collateral Documents or the Security Documents with respect to
the proposed Collateral are not reasonably satisfactory in form and substance to
Lender,  notify Borrower that Lender has not approved the proposed Collateral as
Collateral  or (ii) notify  Borrower  and Bailee that  Lender has  approved  the
proposed  Collateral as Collateral  and such notice shall identify the documents
to be  delivered  to  Custodian  in  connection  with such  proposed  Collateral
pursuant to Sections 2.03 and 5 of this Loan  Agreement  and shall  identify the
party whom Lender shall designate to record and/or file, as the case may be, any
security  documents  necessary  to perfect  Lender's  security  interest  in the
Eligible Collateral. The terms of delivery and filing and/or recordation of such
security documents shall be set forth in a separate agreement between Lender and
its designee.  Lender's  failure to respond to Borrower  within two (2) Business
Days shall be deemed to be a denial of  Borrower's  request that Lender  approve
the proposed  Collateral,  unless Lender and Borrower  have agreed  otherwise in
writing.

         (d) Procedure for Borrowing with Respect to Eligible  Collateral.  Once
Lender has approved the  Collateral in accordance  with Section  2.03(c)  above,
Borrower  may request a Loan  hereunder,  on any  Business Day during the period
from and including the Effective Date to and including the Termination  Date, by
delivering to Lender,  with a copy to Custodian,  an irrevocable written request

                                      -16-


<PAGE>



for borrowing,  substantially  in the form of Exhibit D attached  hereto,  which
request must be received by Lender prior to 11:00 a.m.,  New York City time, one
(l) Business Day prior to the requested Funding Date. Such request for borrowing
shall (1) attach a schedule  identifying  the Eligible  Collateral that Borrower
proposes  to  pledge to  Lender  and to be  included  in the  Borrowing  Base in
connection with such borrowing,  (2) specify the requested Funding Date, and (3)
attach an Officer's  Certificate signed by a Responsible  Officer of Borrower as
required by Section 5.02(b) hereof.  Contemporaneously  with the delivery of the
request  for  borrowing,  Borrower  shall  deliver  to  Lender  with a  copy  to
Custodian,  a Custodial  Identification  Certificate along with the accompanying
Collateral  Schedule  with respect to all  proposed  Eligible  Collateral  to be
pledged to Lender on the applicable Funding Date.

         (e) Delivery of Collateral Files and Security Documents.

             "Non-Table Funded" Eligible Collateral:
             -------------------------------------

             1) By no later than 1:00 p.m., New York City time, one (1) Business
          Day prior to any Funding  Date,  the Borrower  and/or the Bailee shall
          deliver  to  the  Custodian  as  to  any  Eligible   Collateral  on  a
          case-by-case  basis,  (i)  original  counterparts  of  all  Collateral
          Documents  comprising the Collateral File, (ii) the security documents
          described  in  Section  2.03(b)(vii)  above,  and (iii) to the  extent
          applicable,  any other  documents,  reports or updated  information as
          Lender shall request  pursuant to Section  2.03(b)(i)-(x)  and Section
          5.03(b) not heretofore finally approved by Lender.

             "Table Funded" Eligible Collateral:
             ---------------------------------

             1) By no later than 1:00 p.m.,  New York City time,  on the Funding
          Date,  the Borrower shall cause the Bailee to deliver to the Custodian
          by facsimile (i) as to each item of Eligible Collateral,  the note, if
          applicable,  evidencing  the making of a loan secured by such Eligible
          Collateral,  a fully  executed  Bailee  Agreement  and Bailee's  Trust
          Receipt and Certification issued by the Bailee thereunder,  (ii) as to
          all other categories of Eligible  Collateral on a case-by-case  basis,
          the delivery of all fully executed documents and instruments  required
          by  Lender  to  comprise  the  Collateral   File  and  (iii)  evidence
          satisfactory  to  Lender  that  all  documents  necessary  to  perfect
          Borrower's  interest in the Eligible Collateral have been delivered to
          a party acceptable to Lender for recordation and filing.

             2) By no later  than 1:00 p.m.,  New York City  time,  on the third
          Business Day following the applicable Funding Date, the Borrower shall
          cause the Bailee to deliver to the Custodian the Collateral File.

         (f) No later than 1:00 p.m.,  New York City time, on each Funding Date,
Borrower  shall  provide   Custodian  with  a  final  Custodial   Identification
Certificate  and  related  Collateral  Schedule  with  respect  to the  Eligible
Collateral  to be pledged to the Lender on such  Funding  Date,  indicating  any
changes,  if any,  from the  Custodial  Identification  Certificate  and related
Collateral  Schedule  heretofore  delivered to Lender and Custodian  pursuant to
Section 2.03(d) above.

         (g) If Borrower  shall  deliver a request  for a borrowing  pursuant to
Section  2.03(d)  hereof  and all  conditions  precedent  set forth in  Sections
2.03(a),  2.03(b), 2.03(c), 5.01 and 5.02 have been met, and provided no Default
or Event of Default shall have occurred and be  continuing,  Lender shall make a
Loan to Borrower on the  requested  Funding Date, in the amount so requested and
approved by Lender.

         (h) Subject to the  delivery by  Custodian  to Borrower and Lender of a
Trust Receipt with a Collateral Schedule in respect to all Collateral pledged to
Lender on such Funding Date by no later then 3:00 p.m. on such date, and subject
further to the provisions of Section 5 hereof,  such borrowing will then be made
available  to  Borrower  by  Lender  transferring,  via  wire  transfer,  to the
following account of Borrower: Bank of New York, 530 Fifth Avenue, New York, New
York, Account No. 630-0439428 for

                                      -17-


<PAGE>




the  benefit of  Capital  Trust,  ABA#  021-000018,  Attn:  Tarryn  Kone  ((212)
852-4219),  in the  aggregate  amount  of such  borrowing  in funds  immediately
available to Borrower.  Lender may consider on a case-by-case basis in its sole,
absolute discretion alternative funding arrangements requested by Borrower.

         (i) From time to time,  the  Borrower  shall  forward to the  Custodian
additional  original  documents  or  additional  documents  evidencing  any  (i)
assumption,  modification,  consolidation  or extension of a Collateral Loan, or
(iii)  any  amendment  to the  operative  documents  with  respect  to an Equity
Interest,  in each case approved by the Lender in  accordance  with the terms of
this Loan Agreement and upon receipt of any such other documents,  the Custodian
shall hold such other documents as the Lender shall request from time to time.

         (j) With  respect to any  documents  which have been  delivered  or are
being delivered to recording offices for recording and have not been returned to
the Borrower in time to permit their delivery hereunder at the time required, in
lieu of delivering such original  documents,  Borrower shall deliver to Lender a
true copy thereof with an Officer's  Certificate  certifying that such copy is a
true, correct and complete copy of the original,  which has been transmitted for
recordation. The Borrower shall deliver such original documents to the Custodian
promptly when they are received.

         2.04 Mandatory Prepayments or Pledge.
              -------------------------------

         (a) Lender may determine  and  re-determine  the Borrowing  Base on any
Business Day and on as many  Business  Days as it may elect.  If at any time (i)
the aggregate  outstanding  principal amount of Loans exceeds the Borrowing Base
(a "Borrowing Base Deficiency"),  as determined by Lender in its sole discretion
and notified to Borrower on any Business Day,  Borrower  shall no later than one
Business Day after receipt of such notice,  or (ii) Borrower shall have received
a  prepayment  of the  principal  of  any  loan  or  preferred  equity  interest
comprising  a portion of the  Collateral  (including,  without  limitation,  the
payment of casualty or condemnation  proceeds),  Borrower shall,  not later than
one (1) Business Day after receipt of such  prepayment,  either prepay the Loans
in part or in whole or pledge  additional  Collateral (which Collateral shall be
in all respects  acceptable to Lender) to Lender,  such that after giving effect
to such prepayment or pledge the aggregate  outstanding  principal amount of the
Loans does not exceed the Borrowing  Base as  re-determined  by Lender after the
addition of  Collateral.  So long as no Default or Event of Default has occurred
and is then  continuing,  all partial  repayments  shall be applied  against the
Asset-Specific Loan Balance relating to the Loan being repaid.

         (b) If at any time under any Collateral  Document  evidencing  Eligible
Collateral  (x) there is an Event of Default,  or event with which the giving of
notice or lapse of time or both  would  become an Event of  Default,  or (y) any
representation  or  warranty  made by or on  behalf of the  relevant  Collateral
Obligor becomes false or misleading in any material  respect or (z) the relevant
Collateral  Obligor  fails to perform or observe any material  covenant or other
obligation,  Lender  may,  in its sole  discretion  and  without  regard  to any
determination of the Asset Value of such Eligible Collateral, notify Borrower of
such occurrence and may require that the Asset-Specific  Loan Balance related to
the  relevant  Eligible  Collateral  be  prepaid  in  whole  or in  part  in the
determination  of Lender.  Not later than one (1) Business Day after the receipt
of such notice, Borrower shall prepay the Asset-Specific Loan Balance related to
such  Eligible  Collateral.  Lender may, in its sole  discretion,  determine and
re-determine  the  amount  to be  prepaid  irrespective  of  whether  or not any
statement of fact contained in any Officer's  Certificate  delivered pursuant to
Section 5.02(b) or (ii) any representation of Borrower set forth in Section 6.12
was true to Borrower's actual knowledge.

         Section 3. Payments; Computations; Etc.
                    ----------------------------

         3.01 Repayment of Loans; Interest.
              ----------------------------

         (a) Borrower hereby  promises to repay in full on the Termination  Date
the aggregate outstanding principal amount of the Loans;  provided,  however, in
the event the  Termination  Date shall be  extended to the date that is nine (9)
months  after the First  Anniversary  pursuant  to the  terms  hereof,  Borrower
promises to repay such aggregate  principal  amount of the Loans  outstanding on
the First

                                      -18-


<PAGE>




Anniversary  by the payment on the first  Business  Day of each  calendar  month
during the  Amortization  Period  beginning  with the first  Business day of the
first  calendar month  following the First  Anniversary  and on the  Termination
Date,  as  extended  (each,  an  "Installment  Date") of an amount  equal to the
quotient of (x) the aggregate  principal  amount of the Loans  outstanding as at
the First  Anniversary  divided by (y) nine (9) (such schedule of payments,  the
"Amortization  Schedule");  provided,  further,  that in the event that Borrower
shall repay any portion of the  outstanding  principal in an amount in excess of
the amount then due and payable in accordance  with the  Amortization  Schedule,
the Amortization  Schedule shall be recalculated  such that Borrower shall repay
the  principal  amount of the Loans  outstanding  on the date of such  repayment
(after taking such  repayment  into account) by the payment on each  Installment
Date remaining in the Amortization  Period of an amount equal to the quotient of
(x) the aggregate  principal amount of the Loans outstanding on the date of such
repayment  (after taking such repayment into account)  divided by (y) the number
of Installment Dates remaining during the Amortization  Period. Any repayment of
the  principal  of the  Loans  made  by  Borrower  to  Lender  subsequent  to an
Installment  Date shall be credited  at the time of such  payment and applied to
the payment due on next succeeding Installment Date.

         (b) Borrower  hereby  promises to pay to Lender  interest on the unpaid
principal amount of each Loan for the period from and including the date of such
Loan to but  excluding  the date such Loan shall be paid in full,  at a rate per
annum equal to the Eurodollar  Rate plus the applicable  Eurodollar Rate Spread.
Notwithstanding the foregoing, Borrower hereby promises to pay to Lender, to the
extent permitted by applicable law, interest at the applicable Post-Default Rate
on any  principal  of any Loan  and on any  other  amount  payable  by  Borrower
hereunder  or under the Note that shall not be paid in full when due (whether at
stated  maturity,  by acceleration or by mandatory  prepayment or otherwise) for
the period from and including the due date thereof to but excluding the date the
same is paid in full.  Payment  and  acceptance  of  interest  pursuant  to this
subsection  shall not constitute a waiver of any Default and shall not otherwise
limit or prejudice  any right of Lender  hereunder.  In no event shall Lender be
entitled  to  receive  any  proceeds  received  from any  Collateral  Obligor in
connection with the refinancing and/or final distribution to Lender with respect
to any Eligible  Collateral  to the extent same exceeds the sums  provided to be
paid to Lender under Section 7.l5 of this Loan Agreement.

         (c) Accrued  interest on each Loan shall be payable  monthly in arrears
on the  first  Business  Day of each  month  and for the last  month of the Loan
Agreement on the first  Business  Day of such last month and on the  Termination
Date,  except that interest payable at the Post-Default  Rate shall accrue daily
and shall be payable upon such accrual.

         (d) The Loans may be  prepaid  in whole or in part at any time upon two
(2)  Business  Days prior  written  notice,  without  any  penalty  or  premium;
provided,  however,  that any such prepayment  shall be accompanied by an amount
representing  accrued  interest on the  principal  amount being  prepaid and all
other amounts then due under the Loan Documents (including,  without limitation,
all  amounts  due under  Section 3  hereof).  Each  partial  prepayment  that is
voluntary (as opposed to mandatory under the terms of this Loan Agreement) shall
be in an amount of not less than One Hundred  Thousand  Dollars  ($100,000).  So
long as no Default or Event of Default has occurred and is then continuing, each
voluntary  prepayment shall be applied to reduce any Asset-Specific Loan Balance
as designated by Borrower to Lender in writing.

         (e) With  respect to any item of  Collateral,  Borrower  shall repay to
Lender an amount equal to the amount of casualty or  condemnation  proceeds paid
to, or for the benefit of, Borrower or any underlying obligor in respect of such
item of  Collateral  to the  extent  that  Borrower  is not  required  under the
underlying loan documents with Borrower's obligor to reserve,  escrow, readvance
or apply such  proceeds for the benefit of such obligor or the  underlying  real
property.  So long as no Default or Event of Default  has  occurred  and is then
continuing,  such  amounts  paid to Lender  shall be applied in reduction of the
Asset-Specific Loan Balance relating to such item of Collateral.

                                      -19-


<PAGE>




         3.02 Payments.
              --------

         (a) Except to the extent  otherwise  provided  herein,  all payments of
principal,  interest  and other  amounts to be made by Borrower  under this Loan
Agreement and the Note shall be made in Dollars, in immediately available funds,
without deduction,  set-off or counterclaim,  to Lender at the following account
maintained by Lender:  Account No. 40615114, for the account of MSMCI, Citibank,
N.A., ABA No. 021000089, Attn: Whole Loan Operations, Mortgage-Backed Securities
Department, Fixed Income Division, not later than 1:00 p.m., New York City time,
on the date on which such  payment  shall become due (and each such payment made
after  such time on such due date  shall be deemed to have been made on the next
succeeding  Business  Day).  Borrower  acknowledges  that  it has no  rights  of
withdrawal from the foregoing account.  Lender shall endeavor to send Borrower a
detailed  bill on the date which is two (2)  Business  Days prior to the date on
which payment is due; provided,  however, that the failure of Lender to send, or
of Borrower to receive,  such bill shall in no way affect Borrower's  obligation
to pay amounts due under this Loan Agreement.

         (b) Except to the extent otherwise  expressly  provided herein,  if the
due date of any payment  under this Loan  Agreement or the Note would  otherwise
fall on a day that is not a Business  Day,  such date shall be  extended  to the
next succeeding Business Day, and interest shall be payable for any principal so
extended for the period of such extension.

         3.03 Computations. Interest on the Loans shall be computed on the basis
of a 360-day  year for the  actual  days  elapsed  (including  the first day but
excluding the last day) occurring in the period for which payable.  Lender shall
determine  any  rate  of  interest   payable  on  Loans   hereunder,   and  such
determination shall be conclusive and binding, absent manifest error.

         3.04 U.S. Taxes.
              ----------

         (a)  Borrower  agrees to pay to Lender such  additional  amounts as are
necessary  in order that the net  payment of any amount due to Lender  hereunder
after deduction for or withholding in respect of any U.S. Tax (as defined below)
imposed with respect to such payment (or in lieu  thereof,  payment of such U.S.
Tax by  Lender)  or any  other  tax,  imposition,  levy  or  similar  charge  or
assessment  against or otherwise  applicable to Borrower  (whether  imposed by a
political  subdivision or agency of the United States Government,  under any law
or treaty in force or subsequently enacted under the laws of the Cayman Islands)
or otherwise,  will not be less than the amount stated herein to be then due and
payable;  provided that the foregoing obligation to pay such additional amounts,
to the extent attributable to a U.S. Tax, shall not apply:

             (i) to any payment to Lender hereunder unless Lender is entitled to
     submit a Form W-8BEN  (relating  to Lender and  entitling  it to a complete
     exemption  from  withholding on all interest to be received by it hereunder
     in respect of the Loans) or Form  W-8ECI  (relating  to all  interest to be
     received by Lender hereunder in respect of the Loans), or

             (ii) to any U.S.  Tax  imposed  solely by reason of the  failure by
     Lender to comply with applicable certification,  information, documentation
     or other  reporting  requirements  concerning the  nationality,  residence,
     identity or connections with the United States of America of Lender if such
     compliance  is required by statute or  regulation  of the United  States of
     America as a precondition to relief or exemption from such U.S. Tax.

For the purposes of this Section 3.04,  (x) "Form W-8BEN" shall mean Form W-8BEN
(Ownership,  Exemption,  or Reduced Rate  Certificate)  of the Department of the
Treasury of the United  States of  America,  (y) "Form  W-8ECI"  shall mean Form
W-8ECI (Exemption from Withholding of Tax on Income  Effectively  Connected with
the Conduct of a Trade or Business in the United  States) of the  Department  of
the Treasury of the United States of America (or in relation to either such Form
such  successor  and  related  form as may from time to time be  adopted  by the
relevant taxing  authorities of the United States of America to document a claim
to which such Form relates), and (z) "U.S. Taxes" shall mean any present or

                                      -20-


<PAGE>




future tax,  assessment  or other  charge or levy imposed by or on behalf of the
United  States of America,  any  political  subdivision  of the United States of
America or any taxing authority thereof or therein.

         (b) Within 30 days after  paying any such amount to Lender,  and within
30 days after it is required by law to remit such  deduction or  withholding  to
any  relevant  taxing  or other  authority,  Borrower  shall  deliver  to Lender
evidence  satisfactory to Lender of such  deduction,  withholding or payment (as
the case may be).

         (c) Lender  represents and warrants to Borrower that on the date hereof
Lender is either  incorporated  under the laws of the  United  States or a State
thereof or is entitled to submit a Form W-8BEN (relating to Lender and entitling
it to a complete exemption from withholding on all interest to be received by it
hereunder  in respect of the Loans) or Form W-8ECI  (relating to all interest to
be  received by Lender  hereunder  in respect of the  Loans).  Lender  shall not
assign or sell participation interests in the Loans made or to be made hereunder
to a  foreign  bank if as a result  thereof  Lender  shall be unable to make the
representations set forth in this Section 3.04(c).

         3.05 Booking of Loans.  Without  limitation of Lender's rights to sell,
assign or transfer a Loan or any interest  therein,  including any participation
interest  therein,  at any time and from time to time, Lender may make, carry or
transfer  such Loan at, to, or for the  account of any of its branch  offices or
the office of an Affiliate of Lender; provided, however, that the representation
in Section 3.04(c) shall remain true throughout the term of such Loan.

         3.06  Lender's  Funding  of  Eurodollar  Rate  Loans.  Borrower  hereby
expressly  acknowledges  and agrees that Lender may fund a Loan in any manner it
sees fit,  including  (i) through the actual  purchase of a  Eurodollar  deposit
bearing  interest at the rate obtained  pursuant to the definition of Eurodollar
Rate in an  amount  equal to the  principal  amount  of such  Loan and  having a
maturity  comparable to the relevant  interest  period or (ii) through  Lender's
entering into or purchase of repurchase  agreements,  interest rate  agreements,
swap agreements or other  arrangements in such amounts as Lender shall determine
(and which  amounts  may or may not,  in  Lender's  sole  discretion,  be "match
funded" to such Loan).  Calculation of all amounts  payable to Lender under this
Section 3.06 and under  Section 3.07 shall be made as though Lender had actually
funded such Loan through the purchase of a Eurodollar  deposit bearing  interest
at the rate obtained  pursuant to the definition of Eurodollar Rate in an amount
equal to the  amount  of such  Loan  and  having a  maturity  comparable  to the
relevant  interest  period and through the transfer of such  Eurodollar  deposit
from an off-shore  office of Lender to a domestic office of Lender in the United
States of  America;  provided,  however,  that  Lender may fund such Loan in any
manner it sees fit and the  foregoing  assumptions  shall be  utilized  only for
purposes  of  calculating  amounts  payable  under this  Section  3.06 and under
Section 3.07, if any.

         3.07 Funding Costs.
              -------------

         (a) Borrower shall  compensate  Lender,  upon written request by Lender
(which request shall set forth the basis for requesting  such amounts),  for all
Funding Costs.

         (b) Lender  shall  deliver to  Borrower a statement  setting  forth the
amount and basis of determination of any Funding Cost, it being agreed that such
statement  and the method of  calculation  shall be  conclusive  and  binding on
Borrower,  absent manifest error.  In addition,  in the event Borrower  provides
Lender not less than five (5) Business Days prior  written  notice of a proposed
voluntary prepayment  hereunder,  Lender shall deliver to Borrower a non-binding
good faith  estimate of the  applicable  components  and amount of Funding Costs
which  would be  incurred  by  Borrower  if  Borrower  were to make a  voluntary
prepayment hereunder;  provided,  however, that Borrower shall remain liable for
all Funding  Costs shown on the statement  referred to in the first  sentence of
this subsection (b), notwithstanding such good faith estimate.

         (c) In lieu of  prepaying  the Loan when and as  otherwise  required or
permitted by this Loan  Agreement,  Borrower may on any Business Day (a "Deposit
Funding  Date")  instead  deposit with Lender an amount equal to the  applicable
prepayment, to be held by Lender (the "Prepayment Deposit")

                                      -21-


<PAGE>



until such date as application of the Prepayment  Deposit on account of the Loan
would not cause Lender to suffer Funding Costs (the "Deposit Application Date").
Any Prepayment Deposit held by Lender shall: (a) constitute  additional security
for the Loan,  for which the parties  shall enter into such  security  documents
(and  account  establishment  and  administration  documents)  as  Lender  shall
require;  (b) be held by  Lender in an  interest-bearing  account  selected  and
controlled  solely by Lender,  interest on which shall be added to principal and
applied in the same manner as principal;  (c) at Lender's option, be accompanied
by a payment  (as  estimated  by Lender)  equal to the  difference  between  the
interest  to be earned on the  Prepayment  Deposit  and the  interest  that will
accrue on a portion  of the Loan  equal to the  Prepayment  Deposit  during  the
period from the Deposit Funding Date to the Deposit  Application  Date; (d) with
respect to the  Collateral,  entitle  Borrower to the same  rights and  benefits
(including  the right to  releases,  if any) that would have been  available  to
Borrower if Borrower had prepaid the Loan (and  designated  Asset-Specific  Loan
Balance(s)) by an amount equal to the Prepayment Deposit;  and (e) be applied on
account of the Loan (principal and interest) on the Deposit Application Date.

         3.08  Compensation  for Increased  Costs. If Lender shall in good faith
determine that any change in any law, treaty or governmental rule, regulation or
order, or in the interpretation,  administration or application  thereof, or any
determination  of a court or  governmental  authority,  or  compliance  with any
guideline,  request or  directive  issued or made by any  central  bank or other
governmental or quasi-governmental authority (whether or not having the force of
law):

         (a) imposes,  modifies or holds  applicable any reserve  (including any
marginal, emergency,  supplemental,  special or other reserve), special deposit,
compulsory loan, FDIC insurance or similar  requirement  against assets held by,
or deposits or other  liabilities in or for the account of, or advances or loans
by, or other  credit  extended  by, or any other  acquisition  of funds by,  any
office of Lender; or

         (b)  imposes  any  other  condition  on  or  affecting  Lender  or  its
obligations hereunder or the interbank Eurodollar market;

and the  result of any of the  foregoing  is to  increase  the cost to Lender of
agreeing to make,  making or  maintaining  the Loan  hereunder  or to reduce any
amount received or receivable by Lender with respect thereto;  then, in any such
case,  Borrower shall promptly (but in any event no later than five (5) Business
Days  following any notice from Lender of the same) pay to Lender,  upon receipt
of the statement  referred to in the next sentence,  such  additional  amount or
amounts as may be necessary to compensate  Lender for any such increased cost or
reduction in amounts received or receivable  hereunder.  Lender shall deliver to
Borrower a written  statement,  setting forth in reasonable detail the basis for
calculating the additional amounts owed to Lender under this Section 3.08, which
statement  shall be  conclusive  and  binding  upon all  parties  hereto  absent
manifest error.

         3.09 Limitation on Types of Loans;  Illegality.  Anything herein to the
contrary notwithstanding, if:

         (a) Lender determines,  which determination  shall be conclusive,  that
quotations  of  interest  rates for the  relevant  deposits  referred  to in the
definition  of  "Eurodollar  Base  Rate" in  Section  1.01  hereof are not being
provided in the relevant amounts or for the relevant  maturities for purposes of
determining rates of interest for Loans as provided herein; or

         (b) Lender determines,  which determination  shall be conclusive,  that
the relevant rate of interest  referred to in the definition of "Eurodollar Base
Rate" in Section  1.01 hereof  upon the basis of which the rate of interest  for
Loans is to be determined is not likely  adequate to cover the cost to Lender of
making or maintaining Loans; or

         (c) Lender determines, which determination shall be conclusive, that it
is or will be unlawful  for Lender to honor its  obligation  to make or maintain
Loans  hereunder  using a Eurodollar Rate as a result of compliance by Lender in
good faith with any law, treaty,  governmental  rule,  regulation,


                                      -22-


<PAGE>



guideline or order (or would conflict with any such treaty,  governmental  rule,
regulation,  guideline  or order not  having  the force of law even  though  the
failure to comply therewith would not be unlawful);

         then Lender shall give Borrower  prompt notice  thereof and, so long as
such  condition  remains in effect,  Lender shall be under no obligation to make
additional  Loans,  and Borrower  shall,  either prepay all such Loans as may be
outstanding  or pay  interest  on such  Loans at a rate per  annum  equal to the
Eurodollar Substitute Rate.

         Section 4. Collateral Security.
                    -------------------

         4.01 Collateral; Security Interest.
              -----------------------------

         (a) Borrower hereby assigns,  pledges and grants a security interest in
all of its right,  title and interest in, to and under the Collateral  described
in Section  4.01(b)  below to Lender to secure the repayment of principal of and
interest on all Loans and all other amounts owing to Lender hereunder, under the
Note,  under the other Loan Documents and any and all MS Indebtedness  from time
to time outstanding (collectively,  the "Secured Obligations").  Borrower agrees
to mark its  computer  records  to  evidence  the  interests  granted  to Lender
hereunder.

         (b) All of Borrower's  right,  title and interest in, to and under each
of the  following  items of property  pledged by Borrower to Lender from time to
time and whether now owned or  hereafter  acquired,  now  existing or  hereafter
created and wherever  located,  is  hereinafter  individually  and  collectively
referred to as the "Collateral":

             (i) all Mortgage Loans, Mezzanine Loans, Equity Interests and Other
     Approved Collateral;

             (ii) all Collateral  Documents,  including  without  limitation all
     promissory  notes,  any  collateral  pledged or otherwise  relating to such
     Collateral,  all representations and warranties made to, or for the benefit
     of, Borrower by any Collateral  Obligor,  all Servicing Records (as defined
     in Section  11.14(b)  below) and  servicing  agreements,  together with all
     files,  documents,  instruments,  surveys,  certificates,   correspondence,
     appraisals,  computer programs,  computer storage media, accounting records
     and other books and records relating thereto, in each case subject to prior
     liens and encumbrances permitted by Lender;

             (iii) all guaranties and insurance (issued by governmental agencies
     or otherwise) and any insurance  certificate  or other document  evidencing
     such guaranties or insurance  relating to any Collateral and all claims and
     payments thereunder;

             (iv) all other insurance  policies and insurance  proceeds relating
     to any Collateral or the related Property;

             (v) all Interest Rate Protection Agreements;

             (vi) the  Collection  Account  and all monies  from time to time on
     deposit in the Collection Account;

             (vii) all "general intangibles",  "accounts" and "chattel paper" as
     defined in the Uniform  Commercial Code relating to or constituting any and
     all of the foregoing; and

             (viii) any and all replacements,  substitutions,  distributions on,
     or proceeds (including, without limitation,  condemnation proceeds) of, any
     and all of the  foregoing  set  forth in items  (i)  through  (vii) of this
     Section 4.01(b),  whether now owned or hereafter acquired,  now existing or
     hereafter created and wherever located.

         (c)  Pursuant  to the  Custodial  Agreement,  Custodian  shall hold the
Collateral  Documents as exclusive bailee and agent for Lender pursuant to terms
of the Custodial  Agreement  and shall deliver to Lender Trust  Receipts each to
the effect that it has reviewed such Collateral Documents in

                                      -23-


<PAGE>



the manner and to the extent required by the Custodial Agreement and identifying
any deficiencies in such Collateral Documents as so reviewed.

         4.02 Further Assurances.
              ------------------

         (a) Borrower shall  undertake,  with respect to each item of Collateral
pledged  hereunder as security for a Loan, any and all actions deemed  necessary
by Lender for the  granting  by  Borrower  to Lender of a valid  first  priority
security  interest in such  Collateral.  Without  limiting the generality of the
foregoing,  Borrower shall take such steps as are necessary for the granting and
perfection  of a first  priority  security  interest in  Securities  and related
Collateral.

         (b) At any time and from  time to time,  upon the  written  request  of
Lender,  and at the sole expense of Borrower,  Borrower  will  promptly and duly
execute and deliver,  or will promptly cause to be executed and delivered,  such
further  instruments  and documents  and take such further  action as Lender may
reasonably  request for the purpose of obtaining or preserving the full benefits
of this Loan Agreement and of the rights and powers herein  granted,  including,
without limitation, the filing of any financing or continuation statements under
the Uniform  Commercial Code in effect in any  jurisdiction  with respect to the
Liens created hereby.  Borrower also hereby  authorizes  Lender to file any such
financing or  continuation  statement  without the  signature of Borrower to the
extent permitted by applicable law. A carbon, photographic or other reproduction
of this Loan Agreement  shall be sufficient as a financing  statement for filing
in any jurisdiction.

         4.03 Changes in Locations, Name, etc. Borrower shall not (i) change the
location  of its  chief  executive  office/chief  place of  business  from  that
specified  in Section 6 hereof or (ii) change its name,  identity  or  corporate
structure  (or the  equivalent)  or change the location  where it maintains  its
records  with  respect to the  Collateral  unless it shall have given  Lender at
least ten (10) days prior  written  notice  thereof and shall have  delivered to
Lender all Uniform  Commercial Code financing  statements and amendments thereto
as Lender shall request and taken all other actions  deemed  necessary by Lender
to  continue  its  perfected  status in the  Collateral  with the same or better
priority.

         4.04 Lender's Appointment as Attorney-in-Fact.
              ----------------------------------------

         (a) Borrower hereby irrevocably constitutes and appoints Lender and any
officer  or agent  thereof,  with full  power of  substitution,  as its true and
lawful  attorney-in-fact  with full irrevocable power and authority in the place
and stead of Borrower and in the name of Borrower or in its own name,  from time
to time in Lender's  discretion,  for the  purpose of carrying  out the terms of
this Loan Agreement,  to take any and all appropriate  action and to execute any
and all  documents  and  instruments  which may be  necessary  or  desirable  to
accomplish  the  purposes of this Loan  Agreement,  and,  without  limiting  the
generality of the foregoing,  Borrower  hereby gives Lender the power and right,
on behalf of Borrower,  without assent by, but with notice to,  Borrower,  if an
Event of Default shall have occurred and be continuing, to do the following:

             (i) in the name of Borrower or its own name, or otherwise,  to take
     possession  of  and  endorse  and  collect  any  checks,   drafts,   notes,
     acceptances  or other  instruments  for the payment of moneys due under any
     mortgage  insurance or with respect to any other Collateral and to file any
     claim or to take any  other  action  or  proceeding  in any court of law or
     equity or  otherwise  deemed  appropriate  by  Lender  for the  purpose  of
     collecting any and all such moneys due under any such mortgage insurance or
     with respect to any other Collateral whenever payable;

             (ii) to pay or  discharge  taxes and  Liens  levied or placed on or
     threatened against the Collateral; and

             (iii) (A) to direct  any party  liable  for any  payment  under any
     Collateral  to make  payment  of any and all  moneys  due or to become  due
     thereunder  directly  to Lender or as Lender  shall  direct;  (B) to ask or
     demand for, collect, receive payment of and receipt for, any and


                                      -24-


<PAGE>




     all  moneys,  claims and other  amounts due or to become due at any time in
     respect of or arising  out of any  Collateral;  (C) to sign and endorse any
     invoices,  assignments,  verifications,  notices  and  other  documents  in
     connection  with any of the  Collateral;  (D) to commence and prosecute any
     suits, actions or proceedings at law or in equity in any court of competent
     jurisdiction  to collect the  Collateral or any part thereof and to enforce
     any other  right in  respect  of any  Collateral;  (E) to defend  any suit,
     action  or  proceeding   brought  against  Borrower  with  respect  to  any
     Collateral;  (F) to  settle,  compromise  or  adjust  any  suit,  action or
     proceeding described in clause (E) above and, in connection  therewith,  to
     give such  discharges or releases as Lender may deem  appropriate;  and (G)
     generally, to sell, transfer, pledge and make any agreement with respect to
     or otherwise  deal with any of the  Collateral  as fully and  completely as
     though Lender were the absolute owner thereof for all purposes,  and to do,
     at Lender's  option and Borrower's  expense,  at any time, and from time to
     time,  all acts and things  which  Lender  deems  reasonably  necessary  to
     protect, preserve or realize upon the Collateral and Lender's Liens thereon
     and to  effect  the  intent  of  this  Loan  Agreement,  all as  fully  and
     effectively as Borrower might do.

Borrower  hereby  ratifies all that said attorneys shall lawfully do or cause to
be done by virtue  hereof.  This power of  attorney is a power  coupled  with an
interest  and shall be  irrevocable  until the  repayment in full of all Secured
Obligations hereunder.

         (b) Borrower also authorizes Lender, at any time and from time to time,
to execute, in connection with any sale provided for in Section 4.07 hereof, any
endorsements,  assignments  or other  instruments of conveyance or transfer with
respect to the Collateral.

         (c) The powers  conferred  on Lender  are  solely to  protect  Lender's
interests  in the  Collateral  and shall  not  impose  any duty  upon  Lender to
exercise any such powers.  Lender shall be accountable  only for amounts that it
actually receives as a result of the exercise of such powers, and neither Lender
nor any of its  officers,  directors,  or  employees  shall  be  responsible  to
Borrower  for any act or  failure  to act  hereunder,  except  for its own gross
negligence or willful misconduct.

         4.05 Performance by Lender of Borrower's Obligations. If Borrower fails
to perform or comply with any of its agreements  contained in the Loan Documents
to which it is a party and  Lender may itself  perform or comply,  or  otherwise
cause  performance or compliance,  with such  agreement,  the expenses of Lender
incurred in  connection  with such  performance  or  compliance,  together  with
interest  thereon at a rate per annum equal to the  Post-Default  Rate, shall be
payable  by  Borrower  to  Lender  on  demand  and  shall   constitute   Secured
Obligations.

         4.06  Proceeds.  If an Event of Default shall occur and be  continuing,
(a) all proceeds of Collateral  received by Borrower  consisting of cash, checks
and  other  near-cash  items  shall be held by  Borrower  in trust  for  Lender,
segregated  from other funds of Borrower,  and,  within two (2) Business Days of
receipt by Borrower,  shall be turned over to Lender in the exact form  received
by Borrower  (duly endorsed by Borrower to Lender,  if required,  in order to be
negotiated  by  Lender)  and (b) any and all such  proceeds  received  by Lender
(whether from Borrower or otherwise) may, in the sole  discretion of Lender,  be
held by Lender as collateral security for, and/or then or at any time thereafter
may be applied by Lender against,  the Secured  Obligations  (whether matured or
unmatured),  such  application  to be in such order as Lender shall  elect.  Any
balance of such proceeds remaining after the Secured Obligations shall have been
paid in full and this Loan Agreement  shall have been  terminated  shall be paid
over to Borrower or to whomsoever may be lawfully  entitled to receive the same.
For  purposes  hereof,  proceeds  shall  include,  but not be  limited  to,  all
principal and interest payments, all prepayments and payoffs,  insurance claims,
condemnation awards, sale proceeds, real estate owned rents and any other income
and all other amounts received with respect to the Collateral.

         4.07  Remedies.  If an Event of Default shall occur and be  continuing,
Lender may,  at its  option,  enter into one or more  Interest  Rate  Protection
Agreements  covering all or a portion of the Mortgage  Loans or Mezzanine  Loans
pledged to Lender hereunder,  and Borrower shall be responsible for all damages,
judgment costs and expenses of any kind which may be imposed on,  incurred by or
asserted

                                      -25-


<PAGE>



against  Lender  relating to or arising  out of such  Interest  Rate  Protection
Agreements; including without limitation any losses resulting from such Interest
Rate  Protection  Agreements.  If  an  Event  of  Default  shall  occur  and  be
continuing,  Lender may  exercise,  in addition to all other rights and remedies
granted to it in this Loan  Agreement  and in any other  instrument or agreement
securing,  evidencing  or relating to the  Secured  Obligations,  all rights and
remedies of a secured party under the Uniform  Commercial Code. Without limiting
the generality of the  foregoing,  Lender without demand of performance or other
demand,  presentment,  protest,  advertisement or notice of any kind (except any
notice  required  by law  referred  to below) to or upon  Borrower  or any other
Person (each and all of which demands,  presentments,  protests,  advertisements
and notices are hereby waived),  may in such  circumstances  forthwith  collect,
receive,  appropriate  and realize  upon the  Collateral,  or any part  thereof,
and/or may forthwith sell, lease, assign, give option or options to purchase, or
otherwise dispose of and deliver the Collateral or any part thereof (or contract
to do any of the foregoing),  in one or more parcels or as an entirety at public
or private sale or sales, at any exchange, broker's board or office of Lender or
elsewhere  upon such terms and  conditions as it may deem  advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk.  Lender shall have the right upon any such public
sale or sales,  and, to the extent  permitted by law, upon any such private sale
or sales,  to purchase the whole or any part of the Collateral so sold,  free of
any right or equity of redemption  in Borrower,  which right or equity is hereby
waived or released.  Borrower further agrees, at Lender's  request,  to assemble
the  Collateral  and make it  available  to Lender at places  which Lender shall
reasonably  select,  whether at Borrower's  premises or elsewhere.  Lender shall
apply the net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale,  after deducting all reasonable costs and expenses of every
kind incurred  therein or incidental  to the care or  safekeeping  of any of the
Collateral  or in any way  relating  to the  Collateral  or the rights of Lender
hereunder,   including  without  limitation   reasonable   attorneys'  fees  and
disbursements, to the payment in whole or in part of the Secured Obligations, in
such order as Lender may elect,  and only after such  application  and after the
payment by Lender of any other amount  required or permitted by any provision of
law,  including  without  limitation  Section   9-608(a)(1)(c)  of  the  Uniform
Commercial  Code, need Lender account for the surplus,  if any, to Borrower.  To
the extent permitted by applicable law, Borrower waives all claims,  damages and
demands it may acquire  against  Lender arising out of the exercise by Lender of
any of its rights  hereunder,  other  than those  claims,  damages  and  demands
arising from the gross negligence or willful misconduct of Lender. If any notice
of a proposed sale or other  disposition of Collateral shall be required by law,
such  notice  shall be deemed  reasonable  and  proper if given at least 10 days
before such sale or other  disposition.  Borrower  shall  remain  liable for any
deficiency (plus accrued  interest  thereon as contemplated  pursuant to Section
3.01(b)  hereof)  if the  proceeds  of any  sale  or  other  disposition  of the
Collateral  (net of  costs  incurred  in  connection  with  such  sale or  other
disposition)  are  insufficient to pay the Secured  Obligations and the fees and
disbursements of any attorneys employed by Lender to collect such deficiency.

         4.08  Limitation  on  Duties  Regarding   Preservation  of  Collateral.
Lender's duty with respect to the custody, safekeeping and physical preservation
of  the  Collateral  in its  possession,  under  Section  9-207  of the  Uniform
Commercial  Code or  otherwise,  shall be to deal with it in the same  manner as
Lender deals with similar  property for its own account.  Neither Lender nor any
of its directors,  officers or employees  shall be liable for failure to demand,
collect or realize  upon all or any part of the  Collateral  or for any delay in
doing so or shall be under any  obligation  to sell or otherwise  dispose of any
Collateral upon the request of Borrower or otherwise.

         4.09 Powers Coupled with an Interest.  All  authorizations and agencies
herein  contained  with respect to the  Collateral  are  irrevocable  and powers
coupled with an interest.

         4.10  Release  of  Security  Interest.  Upon  termination  of this Loan
Agreement  and the CMBS Loan  Agreement  and  repayment to Lender of all Secured
Obligations and the performance of all obligations  under the Loan Documents and
under the CMBS Loan Agreement, Lender shall release its security interest in any
remaining Collateral.


                                      -26-


<PAGE>



         4.11  Release  of  Collateral.  Provided  that no  Default  or Event of
Default shall exist (other than one that (a) relates solely to the Collateral to
be released  and (b) will be cured  simultaneously  with such  release) and that
Borrower shall have paid all sums then due under the Loan relating thereto, upon
(i) Borrower's payment in full of the  Asset-Specific  Loan Balance with respect
to a portion of the Collateral  and (ii) receipt by Lender of a written  request
from  Borrower  for the  release  of such  Collateral,  Lender  shall as soon as
practicable  release (and Lender shall  reasonably  cooperate  with  Borrower to
facilitate  reasonable escrow arrangements to facilitate a simultaneous  release
of) the related  Collateral  Documents and the related  Collateral and any liens
related  thereto to Borrower or, to the extent  necessary to  facilitate  future
savings of mortgage tax in states that impose mortgage taxes,  assign such liens
as Borrower shall request;  provided, that any such assignments shall be without
recourse,  representation  or warranty  of any kind  except  that  Lender  shall
represent and warrant that such Collateral has not been  previously  assigned by
Lender.  Lender shall with reasonable  promptness,  after a written request from
Borrower,  execute any  document or  instrument  necessary  to  effectuate  such
release or assignment.

         4.12 Substitution of Eligible  Collateral.  From time to time until the
Custodian  is otherwise  notified by the Lender,  which notice shall be given by
the Lender only during the existence of an Event of Default,  and with the prior
written consent of the Lender, the Borrower may substitute for one or more items
of Eligible  Collateral  constituting the Collateral with one or more substitute
items of  Eligible  Collateral  having  aggregate  Collateral  Value equal to or
greater than the Collateral  Value of the Collateral  being  substituted for, or
obtain the release of one or more items of  Collateral  constituting  Collateral
hereunder:  provided that, after giving effect to such  substitution or release,
the Secured  Obligations then  outstanding  shall not exceed the Borrowing Base,
which  determination  shall be made solely by the Lender. In connection with any
such requested  substitution or release, the Borrower will provide notice to the
Custodian and the Lender no later than 3:00 p.m. New York City time, on the date
of such request,  specifying  the items of Collateral to be  substituted  for or
released  and the items of  substitute  Collateral  to be pledged  hereunder  in
substitution  thereof,  if any,  and shall  deliver with such notice a Custodial
Identification  Certificate  and a revised  Collateral  Schedule  indicating any
substitute Collateral.

         Section 5. Conditions Precedent.
                    --------------------

         5.01 Initial  Loan.  The  obligation of Lender to make its initial Loan
hereunder is subject to the  satisfaction,  immediately prior to or concurrently
with the making of such Loan, of the condition  precedent that Lender shall have
received  all of the  following  items  and  documents,  each of which  shall be
satisfactory to Lender and its counsel in form and substance:

         (a) Loan Documents.

             (i) This Loan Agreement, duly completed and executed;

             (ii) The Note, duly completed and executed,  together with a fee in
     the amount of $675,000.00;

             (iii) The  Custodial  Agreement,  duly  executed  and  delivered by
     Borrower and Custodian.  In addition,  Borrower shall have taken such other
     action as Lender  shall have  requested  in order to perfect  the  security
     interests created pursuant to the Loan Agreement; and

             (iv) The Parent Guaranty, duly completed and executed.

         (b) Organizational Documents.  Certified copies of the Borrower By-Laws
(or equivalent  documents),  certificate of incorporation of Borrower and of all
requisite  authority for Borrower and CT Mezz II with respect to the  execution,
delivery and  performance  of the Loan Documents to which it is a party and each
other  document to be  delivered by Borrower and CT Mezz II from time to time in
connection  herewith (and Lender may  conclusively  rely on such  certifications
until it receives notice in writing from Borrower to the contrary);

         (c) Legal Opinion and Certificate as to Substantive  Non-Consolidation.
A legal opinion of counsel to Borrower CTMP II, CT Mezz II, substantially in the
form attached hereto as Exhibit

                                      -27-


<PAGE>



C and a certificate of Borrower,  CTMP II, CT Mezz II, CT-F2,  GREMII,  TINDY RE
Investments,  Inc, The Travelers Insurance Company and CTI in form and substance
satisfactory  to Lender in its sole  discretion as to the separate  existence of
Borrower,  CTMP II, CT Mezz II, CT-F2, GREMII,  TINDY RE Investments,  Inc., The
Travelers  Insurance  Company and CTI and certain factual matters which would be
determinative of the probability that, in the event that any of CTMP II, CT Mezz
II, CT-F2, GREMII, TINDY RE Investments,  The Travelers Insurance Company or CTI
were to become a debtor under 11 U.S.C.  ss. 101 et seq.,  a federal  bankruptcy
court would not disregard such separate existence and consolidate the assets and
liabilities of Borrower, CTMP II, CT Mezz II, GREMII or CTI with any such debtor
entity;

         (d) Trust Receipt and Collateral Schedule and Exception Report. A Trust
Receipt,  substantially in the form of Annex 2 of the Custodial Agreement, dated
the Effective Date, from Custodian,  duly completed,  with a Collateral Schedule
and Exception Report attached thereto;

         (e) Servicing  Agreement(s).  Any Servicing  Agreement,  certified as a
true,  correct  and  complete  copy of the  original,  with  the  letter  of the
applicable  Servicer (i) consenting to  termination of such Servicing  Agreement
upon the  occurrence of an Event of Default and (ii) agreeing to hold all moneys
received  in  respect  of each item of  Collateral  for the  benefit  of Lender,
attached; and

         (f) Other  Documents.  Such other  documents  as Lender may  reasonably
request.

         5.02 Initial and Subsequent  Loans. The making of each Loan to Borrower
(including  the initial  Loan) on any Business Day is subject to the delivery of
all Collateral Documents pertaining to the Eligible Collateral to be pledged for
such Loan,  together with all documents set forth in Section  2.03(b)(i)-(x) and
the satisfaction of the following further conditions precedent, both immediately
prior to the making of such Loan and also after giving effect thereto and to the
intended use thereof:

         (a)  no  Event  of  Default  or  Default  shall  have  occurred  and be
continuing  on such date either  before or after giving  effect to the making of
the advance;

         (b)  Lender  shall  have  received  from  Borrower  and CT Mezz II, and
Borrower shall have received from each Collateral  Obligor such  representations
and warranties as Lender shall, in its sole discretion,  deem satisfactory.  The
representations  and warranties made by Borrower in Section 6 hereof,  elsewhere
in each of the Loan  Documents and by CT Mezz II in the Guaranty,  shall be true
and  complete  on and as of the date of the making of such Loan in all  material
respects (in the case of the  representations  and  warranties  in Section 6.09,
solely with respect to Eligible  Collateral included in the Borrowing Base) with
the same  force and  effect  as if made on and as of such date (or,  if any such
representation  or  warranty  is  expressly  stated  to have  been  made as of a
specific  date,  as of such  specific  date).  Lender  shall  have  received  an
officer's  certificate signed by a Responsible Officer of Borrower certifying as
to the truth and accuracy of the above,  which  certificate shall also include a
representation that (i) Borrower is in compliance with all governmental licenses
and authorizations,  (ii) Borrower is qualified to do business, validly existing
and,  to  the  extent   determinable,   in  good   standing,   in  all  required
jurisdictions,  (iii) the facts set forth in the Diligence  Materials related to
the  Collateral  for such Loan are,  to the best  knowledge  of  Borrower  after
diligent  inquiry,  true and correct (or shall fully explain all adverse changes
from the  information  previously  supplied to  Lender),  (iv) there has been no
change in the organizational and authority documents provided to Lender pursuant
to  Section  5.01(b)  hereof  since  the date of the most  recent  certification
thereof to Lender,  and (v) there has been no Material  Adverse Effect since the
date of the last advance to Borrower hereunder.  If required,  Lender shall also
receive a similar Certificate executed by a Responsible Officer of CT Mezz II.

         (c) the aggregate  outstanding  principal amount of the Loans shall not
exceed the Borrowing Base;

         (d)  subject to  Lender's  right to perform  one or more Due  Diligence
Reviews  pursuant to Section 11.15 hereof,  Lender shall have  completed its due
diligence  review of the  Collateral  Documents for each item of Collateral  and
such other documents, records, agreements, instruments,

                                      -28-


<PAGE>


mortgaged  properties  or  information  relating to such item of  Collateral  as
Lender in its sole discretion deems  appropriate to review and such review shall
be satisfactory to Lender in its sole discretion;

         (e) Lender shall have received from Custodian a Trust Receipt, together
with a Collateral  Schedule and Exception  Report with Exceptions (as defined in
the Custodial Agreement) as are acceptable to Lender in its sole discretion,  in
respect of the Eligible Collateral to be pledged hereunder on such Business Day;

         (f) Lender shall have received from Borrower a Lender's  Release Letter
substantially  in the form of Exhibit E hereto (or such other form acceptable to
Lender)  covering  each item of Collateral to be pledged to Lender to the extent
such Collateral is subject to a lender's lien;

         (g) none of the following shall have occurred and/or be continuing:

             (i) an  event  or  events  shall  have  occurred  resulting  in the
     effective  absence of a "repo  market" or comparable  "lending  market" for
     financing  debt  obligations  secured by mortgage loans or securities for a
     period of (or reasonably expected to be) at least 30 consecutive days or an
     event or events shall have  occurred  resulting in Lender not being able to
     finance  any Loans  through  the "repo  market" or  "lending  market"  with
     traditional  counterparties at rates which would have been reasonable prior
     to the occurrence of such event or events;

             (ii) an  event or  events  shall  have  occurred  resulting  in the
     effective  absence  of a  "securities  market"  for  securities  backed  by
     mortgage loans for a period of (or  reasonably  expected to be) at least 30
     consecutive  days or an event or events  shall have  occurred  resulting in
     Lender not being able to sell securities backed by mortgage loans at prices
     which would have been reasonable prior to such event or events; or

             (iii) there shall have  occurred a material  adverse  change in the
     financial  condition of Lender which effects (or can reasonably be expected
     to  effect)  materially  and  adversely  the  ability of Lender to fund its
     obligations under this Loan Agreement;

         (h) Drawdown Fee.  Borrower shall have paid Lender from the proceeds of
the advance to be made in connection  with such Loan, a Drawdown Fee  calculated
on the amount of such Loan then being disbursed.

         (i)  Transaction  Costs.  Borrower  shall  have  paid  Lender  from the
proceeds of the advance to be made in connection with such Loan, all Transaction
Costs for which  bills have been  submitted;  provided,  however,  that  nothing
herein shall be deemed to waive  Borrower's  obligation  to pay all  Transaction
Costs whether billed before or after the making of a Loan pursuant to which such
Transaction Costs were incurred.

         (j) Other  Documents.  Lender shall have received such other documents,
and Borrower shall have taken such other action in order to perfect the security
interests created hereunder, as Lender or its counsel shall deem necessary.

         (k) No Morgan  Stanley  Downgrade.  Morgan  Stanley Dean Witter & Co.'s
corporate  bond  rating  as  calculated  by S&P or  Moody's  shall not have been
lowered or  downgraded  to a rating  below A- as indicated by S&P or below A3 as
indicated by Moody's.

         Each request for a borrowing by Borrower  hereunder shall  constitute a
certification  by Borrower that all the  conditions  set forth in this Section 5
have been satisfied (both as of the date of such notice, request or confirmation
and as of the date of such borrowing).

         5.03 Additional Requirements.
              -----------------------

         (a)  Borrower and Lender  recognize  and agree that the  categories  of
Collateral  set forth in the  Recital  paragraph  hereof and  defined  herein as
categories  of assets which may be submitted by Borrower to Lender for review by
Lender as Eligible Collateral hereunder are general in nature and


                                      -29-


<PAGE>



that the full scope of such Collateral categories may be unknown.  Consequently,
the  appropriate  requirements  are not fully known for (i) the  documents to be
provided by Borrower for  underwriting  and due  diligence  review by Lender and
(ii)  submittals  by Borrower  in order to create and  perfect a first  priority
security interest in the Collateral.  Therefore, Borrower and Lender agree that,
as a further condition  precedent to funding a Loan in respect of any Collateral
hereunder, Borrower shall have delivered to Lender all information and documents
determined  by Lender in good  faith to be  required  for its  underwriting  and
examination  of such  Collateral  and for the granting and perfection of a first
priority security interest therein.

         (b) Without  limiting the generality of the foregoing  Section 5.03(a),
Borrower shall execute and deliver all documents necessary for the granting of a
first priority  security  interest in any Collateral  determined by Lender to be
Eligible Collateral hereunder,  including without limitation (i) all instruments
evidencing  indebtedness  payable to Borrower or pledged to Borrower as security
for a loan, (ii) all instruments  granting or perfecting a security interest for
the  benefit  of  Borrower  or  pledged  to  Borrower  as  security  for a  loan
(including,  without limitation,  collateral assignments,  pledge agreements and
UCC financing  statements),  (iii) all instruments  evidencing an interest in an
entity  pledged  to  Borrower  as  security  for  a  loan  (including,   without
limitation,  partnership  interests,  shares of corporate  stock,  participation
interests,  and other  beneficial  interests of any kind),  (iv) all instruments
guaranteeing  the  repayment of  indebtedness  owed to  Borrower,  or pledged to
Borrower for the  repayment of a Loan and (v) all  agreements  among  holders of
debt or  equity  interests  providing  for a  priority  among  such  parties  of
interests in related assets forming the basis of an item of Collateral.

         5.04 Tax Opinion.  Notwithstanding  anything to the contrary  contained
herein,  Borrower hereby covenants and agrees to deliver to Lender no later than
August  3,  2001,  "Tax  Opinion"  of  Borrower's  counsel,  in such  form as is
reasonably  acceptable to Lender  concluding that no Borrower will be treated as
engaged in a trade or business within the United States.

         Section 6. Representations and Warranties.
                    -------------------------------

         Borrower  represents  and  warrants  to Lender  that from and after the
First Anniversary and throughout the term of this Loan Agreement:

         6.01 Existence. Borrower (a) is a company duly incorporated and validly
existing under the laws of the  jurisdiction of its  incorporation,  (b) has all
requisite power, and has all governmental licenses, authorizations, consents and
approvals  necessary to own its assets and carry on its business as now being or
as  proposed  to  be  conducted,   except  where  the  lack  of  such  licenses,
authorizations,  consents and approvals would not be reasonably likely to have a
Material  Adverse  Effect on its  Property,  business or financial  condition or
prospects; and (c) is qualified to do business,  validly existing and is, to the
extent determinable,  in good standing,  in all other jurisdictions in which the
nature of the  business  conducted  by it makes  such  qualification  necessary,
except  where  failure  so to qualify  would not be  reasonably  likely  (either
individually  or in the  aggregate)  to have a  Material  Adverse  Effect on its
Property, business or financial condition or prospects.

         6.02 Action.  Borrower has all  necessary  power,  authority  and legal
right to execute,  deliver and  perform its  obligations  under each of the Loan
Documents to which it is a party;  the  execution,  delivery and  performance by
Borrower  of each of the Loan  Documents  to which it is a party  have been duly
authorized by all necessary  action on its part; and each Loan Document to which
it is a party has been duly and validly  executed and  delivered by Borrower and
constitutes  a legal,  valid and binding  obligation  of  Borrower,  enforceable
against Borrower in accordance with its terms.

         6.03   Litigation.   There  are  no   actions,   suits,   arbitrations,
investigations  (including,  without limitation,  any of the foregoing which are
pending  or  threatened)  or other  legal or  arbitrable  proceedings  affecting
Borrower or any of its  Subsidiaries  or affecting any of the Property of any of
them before any  Governmental  Authority  that (i) questions or  challenges  the
validity  or  enforceability  of any of the Loan  Documents  or any action to be
taken in connection  with the  transactions  contemplated  hereby,  (ii) makes a
claim or claims in an aggregate  amount  greater than  $5,000,000,  (iii) which,
individually or


                                      -30-


<PAGE>



in the aggregate,  if adversely determined,  could reasonably be
likely to have a Material  Adverse  Effect,  or (iv)  requires  filing  with the
Securities and Exchange  Commission in accordance with the 1934 Act or any rules
thereunder.

         6.04 No Breach.  Neither  (a) the  execution  and  delivery of the Loan
Documents to which it is a party nor (b) the  consummation  of the  transactions
therein  contemplated in compliance  with the terms and provisions  thereof will
conflict with or result in a breach of the Borrower  By-Laws or the  certificate
of incorporation of Borrower, or any applicable law, rule or regulation,  or any
order,  writ,  injunction  or  decree  of  any  Governmental  Authority,  or any
Servicing  Agreement or other material agreement or instrument to which Borrower
or any of its  Subsidiaries  is a party or by which  any of them or any of their
Property is bound or to which any of them is subject,  or  constitute  a default
under any such  material  agreement or  instrument  or result in the creation or
imposition  of any Lien  (except  for the Liens  created  pursuant  to this Loan
Agreement)  upon any  Collateral  pursuant to the terms of any such agreement or
instrument.

         6.05  Approvals.  No  authorizations,  approvals or consents of, and no
filings or  registrations  with,  any  Governmental  Authority or any securities
exchange are necessary for the execution, delivery or performance by Borrower of
the Loan  Documents  to which it is a party  or for the  legality,  validity  or
enforceability  thereof,  except for  filings and  recordings  in respect of the
Liens created pursuant to this Loan Agreement.

         6.06 Use of  Proceeds;  Margin  Regulations.  Neither the making of any
Loan  hereunder,  nor  the  use of the  proceeds  thereof,  will  violate  or be
inconsistent  with any provisions of Regulation T, U or X. In addition,  no part
of the  proceeds  of any  Loan  will  be  used,  whether  directly,  indirectly,
immediately,  incidentally  or  ultimately  (i) to purchase or carry any "margin
stock" within the meaning of Regulation U or to refund  indebtedness  originally
incurred for such purpose, or (ii) for any purpose which entails a violation of,
or is inconsistent with, such Regulation U or any other regulations of the Board
of Governors of the Federal Reserve System, or (iii) for any purposes prohibited
by any applicable law,  order,  rule,  regulation,  ordinance or similar code or
restriction.  If requested by Lender, the Borrower,  any applicable Affiliate or
Subsidiary  of Borrower and the  recipient of any portion of the proceeds all or
any portion of any Loan shall  furnish to Lender a statement on Federal  Reserve
Form G-3 referred to in Regulation U.

         6.07 Taxes. Borrower and its Subsidiaries have filed all Federal income
tax returns and all other  material tax returns that are required to be filed by
them and have paid all taxes due  pursuant  to such  returns or  pursuant to any
assessment  received  by any of them,  except  for any such  taxes as are  being
appropriately  contested  in good faith by  appropriate  proceedings  diligently
conducted and with respect to which adequate  reserves have been  provided.  The
charges,  accruals and reserves on the books of Borrower and its Subsidiaries in
respect of taxes and other governmental charges are, in the opinion of Borrower,
adequate.

         6.08  Investment   Company  Act.   Neither  Borrower  nor  any  of  its
Subsidiaries  is  an  "investment  company",  or a  company  "controlled"  by an
"investment  company" within the meaning of the Investment  Company Act of 1940,
as amended.

         6.09 Collateral; Collateral Security.
              -------------------------------

         (a)  Borrower  has not  assigned,  pledged,  or  otherwise  conveyed or
encumbered any Collateral to any other Person other than an Additional Borrower,
and  immediately  prior to the  pledge  of such  Collateral  to  Lender,  unless
otherwise  approved  by  Lender  in  writing,  either  Initial  Borrower  or the
applicable  Additional Borrower,  as the case may be, was the sole owner of such
Collateral  and had good and  marketable  title  thereto,  free and clear of all
Liens,  in each case  except for Liens to be  released  simultaneously  with the
Liens  granted in favor of Lender  hereunder.  No  Collateral  pledged to Lender
hereunder  was  acquired  by  Borrower  from an  Affiliate  of  Borrower  unless
otherwise approved by Lender in writing.


                                      -31-


<PAGE>



         (b) The  provisions  of this Loan  Agreement are effective to create in
favor of Lender a valid  security  interest in all right,  title and interest of
Borrower in, to and under the Collateral.

         (c) Upon (x) receipt by Custodian of each  Mortgage  Note  evidencing a
Mortgage Loan,  endorsed in blank by a duly authorized officer of Borrower,  (y)
the  recordation  of the mortgage to Lender  securing  such Mortgage Loan and an
assignment  of such mortgage and (z) the filing of a UCC-1  financing  statement
with respect to such assignment of mortgage, Lender shall have a fully perfected
first  priority  security  interest  therein,  subject  only to prior  liens and
encumbrances  permitted by Lender, in the Mortgage Loan evidenced thereby and in
Borrower's interest in the related Property.

         (i)   Upon (x) receipt by Custodian of each note evidencing a Mezzanine
               Loan, endorsed in blank by a duly authorized officer of Borrower,
               (y) the delivery of a duly executed  pledge to Borrower of direct
               or indirect  beneficial  interests in the underlying property and
               the filing of UCC-1 financing  statements  with respect  thereto,
               and (z) the  delivery by Borrower  of a duly  executed  pledge of
               such  pledged  interests  and  the  filing  of  UCC-3  assignment
               statements  with  respect  thereto,  Lender  shall  have a  fully
               perfected  first  priority  security  interest  therein,  in  the
               Mezzanine Loan evidenced thereby,  and in Borrower's  interest in
               the related Property.

         (ii)  As to all other  Collateral,  upon  receipt by  Custodian  of all
               documents set forth in Lender's  notice to Borrower and Custodian
               pursuant to Section 2.03(b)(x) hereof,  Lender shall have a fully
               perfected  first  priority   security  interest  therein  and  in
               Borrower's interest in the related Property.

         (d) Upon the filing of financing statements on Form UCC-1 naming Lender
as "Secured Party" and Borrower as "Debtor",  and describing the Collateral,  in
the  jurisdictions  and recording  offices for which  security  interests may be
perfected  in the  Collateral  by the filing of UCC  financing  statements,  the
security  interests  granted  hereunder in the Collateral will constitute  fully
perfected first priority security interests under the Uniform Commercial Code in
all right, title and interest of Borrower in, to and under such Collateral which
can be perfected by filing under the Uniform Commercial Code.

         6.10  Chief  Executive  Office.  Borrower's  registered  office  is c/o
Caledonian Bank & Trust Limited,  PO Box 1043 GT,  Caledonian  House 69 Dr. Roys
Drive, Cayman Islands.

         6.11 Location of Books and Records.  The location  where Borrower keeps
its books and records,  including all computer tapes and records relating to the
Collateral  is its  "Address  for  Notices"  specified  below  its  name  on the
signature pages hereof.

         6.12 True and Complete Disclosure. The information,  reports, financial
statements,  exhibits  and  schedules  furnished  in  writing by or on behalf of
Borrower to Lender in connection with the  negotiation,  preparation or delivery
of this Loan  Agreement  and the other  Loan  Documents  or  included  herein or
therein or delivered  pursuant hereto or thereto,  when taken as a whole, (x) do
not contain any untrue statement of material fact and (y) contain all statements
of material fact necessary to make the statements herein or therein, in light of
the  circumstances  under which they were made,  true.  All written  information
furnished  after  the date  hereof  by or on  behalf  of  Borrower  to Lender in
connection  with  this  Loan  Agreement  and the other  Loan  Documents  and the
transactions  contemplated  hereby  and  thereby,  will be  true,  complete  and
accurate in every material  respect,  or (in the case of  projections)  based on
reasonable  estimates,  on the date as of which  such  information  is stated or
certified.  There is no fact  known to the  actual  knowledge  of a  Responsible
Officer of Borrower,  after due inquiry,  that could  reasonably  be expected to
have a Material Adverse Effect that has not been disclosed  herein, in the other
Loan  Documents  or  in  a  report,  financial  statement,   exhibit,  schedule,
disclosure  letter or other  writing  furnished to Lender for use in  connection
with the transactions contemplated hereby or thereby.

                                      -32


<PAGE>



         6.13 ERISA. Each Plan to which Borrower or its Subsidiaries make direct
contributions,  and,  to the  knowledge  of  Borrower,  each other Plan and each
Multiemployer Plan, is in compliance in all material respects with, and has been
administered  in all  material  respects  in  compliance  with,  the  applicable
provisions  of ERISA,  the Code and any other  Federal or State law. No event or
condition has occurred and is continuing as to which  Borrower would be under an
obligation to furnish a report to Lender under Section 7.01(e) hereof assuming a
request therefor has been made by Lender.

         6.14 Income Tax.  Borrower is not and will not at any time prior to the
Termination  Date (i) be considered to be engaged in a trade or business  within
the United  States,  or (ii) enter into any  transaction  which may give rise to
gain that is taxable to Borrower under Section 897 of the Code.

         Section 7.  Covenants of Borrower.  Borrower  covenants and agrees with
Lender that, so long as any Loan is outstanding and until payment in full of all
Secured Obligations:

         7.01  Financial  Statements,  Reports,  etc.  Borrower shall deliver to
Lender for itself and on behalf of CT Mezz II:

         (a) the Monthly Statement;

         (b) as soon as available and in any event within  forty-five  (45) days
after the end of each of the first three quarterly fiscal periods of each fiscal
year of Borrower and CT Mezz II, the  unaudited  (consolidated,  if  applicable)
balance sheets of Borrower and CT Mezz II (and its consolidated Subsidiaries, if
applicable)   as  at  the  end  of  such  period  and  the   related   unaudited
(consolidated,  if applicable) statements of income and retained earnings and of
cash flows for Borrower and CT Mezz II (and its  consolidated  Subsidiaries,  if
applicable)  for such period and the portion of the fiscal year  through the end
of such period,  setting forth in each case in comparative  form the figures for
the previous  year,  accompanied  by a certificate  of a Responsible  Officer of
Borrower and CT Mezz II, which  certificate  shall state that said  consolidated
financial  statements  fairly present the consolidated  financial  condition and
results  of  operations  of  Borrower  and CT  Mezz  II  (and  its  consolidated
Subsidiaries,  if applicable) in accordance with GAAP,  consistently applied, as
at the  end  of,  and  for,  such  period  (subject  to  normal  year-end  audit
adjustments);

         (c) as soon as available and in any event within ninety (90) days after
the end of each fiscal year of Borrower and CT Mezz II, the consolidated balance
sheets  of  Borrower  and CT Mezz  II (and  its  consolidated  Subsidiaries,  if
applicable)  as at the end of such  fiscal  year  and the  related  consolidated
statements of income and retained earnings and of cash flows for Borrower and CT
Mezz II (and its  consolidated  Subsidiaries,  if  applicable)  for  such  year,
setting  forth in each case in  comparative  form the figures  for the  previous
year,  accompanied  by  an  opinion  thereon  of  independent  certified  public
accountants  of  recognized  national  standing,  which  opinion  shall  not  be
qualified  as to scope of audit or going  concern  and  shall  state  that  said
consolidated  financial  statements  fairly present the  consolidated  financial
condition  and  results  of  operations  of  Borrower  and CT Mezz  II (and  its
consolidated Subsidiaries, if applicable) as at the end of, and for, such fiscal
year in accordance  with GAAP,  and a certificate  of such  accountants  stating
that, in making the  examination  necessary for their opinion,  they obtained no
knowledge, except as specifically stated, of any Default or Event of Default;

         (d) within  forty-five (45) days following the end of each quarter,  or
within  ninety (90) days  following the end of each fiscal year, as the case may
be, a certificate  from a Responsible  Officer of Borrower in form and substance
reasonably  satisfactory  to Lender  that  Borrower  and CT Mezz II during  such
fiscal  period or year has observed or performed  all of its covenants and other
agreements, and satisfied every condition,  contained in this Loan Agreement and
the other Loan Documents to be observed,  performed or satisfied by it, and that
there has been no Event of Default and no Material Adverse Effect;

         (e) within  fifteen (15) Business  Days after  Lender's  request,  such
further  information  with respect to the  operation of any real  property,  the
Collateral,  the  financial  affairs  of  Borrower,  CT Mezz II and any Plan and
Multiemployer  Plan as may be requested by Lender,  including all business

                                      -33-


<PAGE>



plans prepared by or for Borrower and CT Mezz II; provided,  however,  that with
respect  to  information  not  previously  known  to, or in the  possession  of,
Borrower relating to any Multiemployer  Plan, Borrower shall only be required to
provide such information as may be obtained through good faith efforts;

         (f) upon  Lender's  request,  a copy of any  financial  or other report
Borrower  shall receive from any  underlying  obligor with respect to an item of
Collateral within fifteen (15) days after Borrower's receipt thereof; and

         (g) such other reports as Lender shall reasonably require.

         7.02  Litigation.  Borrower will  promptly,  and in any event within 10
days after service of process on any of the following,  give to Lender notice of
all litigation, actions suits, arbitrations,  investigations (including, without
limitation, any of the foregoing which are pending or threatened) or other legal
or  arbitrable  proceedings  affecting  Borrower or any of its  Subsidiaries  or
affecting any of the Property of any of them before any  Governmental  Authority
that (i) questions or challenges  the validity or  enforceability  of any of the
Loan  Documents or any action to be taken in  connection  with the  transactions
contemplated hereby, (ii) makes a claim or claims in an aggregate amount greater
than  $1,000,000.00,  or  (iii)  which,  individually  or in the  aggregate,  if
adversely  determined  could  reasonably  be likely to have a  Material  Adverse
Effect.

         7.03 Existence, etc,. Borrower will:
              ----------------

         (a) preserve and maintain its legal  existence  and all of its material
rights,  privileges,  licenses  and  franchises  (provided  that nothing in this
Section 7.03(a) shall prohibit any transaction expressly permitted under Section
7.04 hereof);

         (b)  comply  with  the  requirements  of all  applicable  laws,  rules,
regulations  and  orders  of  Governmental   Authorities   (including,   without
limitation,  all environmental laws) if failure to comply with such requirements
would be reasonably  likely (either  individually or in the aggregate) to have a
Material  Adverse Effect on its Property,  business or financial  condition,  or
prospects;

         (c) keep  adequate  records  and books of  account,  in which  complete
entries will be made in accordance with GAAP consistently applied;

         (d) not move its chief executive office from the address referred to in
Section 6.10 unless it shall have provided  Lender 10 days' prior written notice
of such change;

         (e) pay and discharge all taxes,  assessments and governmental  charges
or levies  imposed on it or on its  income or profits or on any of its  Property
prior to the date on which penalties  attach  thereto,  except for any such tax,
assessment, charge or levy the payment of which is being contested in good faith
and by  proper  proceedings  and  against  which  adequate  reserves  are  being
maintained; and

         (f) permit  representatives of Lender, during normal business hours, to
examine,  copy and make extracts  from its books and records,  to inspect any of
its Properties,  and to discuss its business and affairs with its officers,  all
to the extent reasonably requested by Lender.

         7.04 Prohibition of Fundamental Changes.  Borrower shall not enter into
any transaction of merger or consolidation or amalgamation,  or liquidate,  wind
up or dissolve itself (or suffer any liquidation,  winding up or dissolution) or
sell all or substantially all of its assets;  provided,  that Borrower may enter
into a merger or consolidation if (a) the surviving or resulting entity shall be
a corporation  or partnership  organized  under the laws of the United States or
any state thereof;  (b) such entity shall expressly assume by written agreement,
in form and substance  satisfactory to Lender in Lender's sole  discretion,  the
performance  of all  of  Borrower's  duties  and  obligations  under  this  Loan
Agreement,  the Note and the Loan  Documents;  and (c) such  entity  shall be at
least as creditworthy as Borrower,  as determined by Lender in Lender's sole and
absolute  discretion;  and,  provided,  further,  that if  after  giving  effect
thereto, no Default would exist hereunder.


                                      -34-


<PAGE>



         7.05 Borrowing Base Deficiency. If at any time there exists a Borrowing
Base  Deficiency,  Borrower  shall cure same in  accordance  with  Section  2.04
hereof.

         7.06 Notices. Borrower shall give notice to Lender:

         (a) promptly  upon receipt of notice or knowledge of the  occurrence of
any Default or Event of Default;

         (b)  with  respect  to any  Collateral  pledged  to  Lender  hereunder,
immediately  upon  receipt of any  principal  payment  (in full or  partial)  or
payment in respect of an Equity Interest;

         (c)  with  respect  to any  Collateral  pledged  to  Lender  hereunder,
immediately upon receipt of notice or knowledge that the underlying Property has
been damaged by waste,  fire,  earthquake or earth movement,  windstorm,  flood,
tornado or other casualty,  or otherwise  damaged so as to affect  adversely the
Asset Value of such pledged Collateral;

         (d)  promptly  upon  receipt of notice or  knowledge of (i) any default
related to any Collateral  unless otherwise  specifically  approved by Lender in
writing,  (ii) any Lien or  security  interest  (other than  security  interests
created hereby or by the other Loan  Documents)  on, or claim asserted  against,
any of the Collateral,  (iii) any event or change in circumstances  has or could
reasonably be expected to have an adverse affect on the Collateral  Value of the
Collateral for a Loan or (iv) any event or change in  circumstances  which could
reasonably be expected to have a Material Adverse Effect;

         (e) with respect to any item of Collateral pledged to Lender hereunder,
promptly upon entering into a modification  of any documents  pertaining to such
item of Collateral  which would have a material  adverse  effect on such item of
Collateral; and

         (f)  with  respect  to any  Collateral  pledged  to  Lender  hereunder,
immediately  upon the  acquisition  or receipt by Borrower or any  Affiliate  of
Borrower  of any  interest  of any  kind in  respect  of such  Collateral  which
interest has not been pledged to Lender as Collateral under this Loan Agreement.

         Each  notice  pursuant  to  this  Section  shall  be  accompanied  by a
statement of a  Responsible  Officer of Borrower  setting  forth  details of the
occurrence  referred to therein and stating  what action  Borrower  has taken or
proposes to take with respect thereto.

         7.07 Reports.  Borrower shall provide  Lender with a quarterly  report,
which  report  shall  include,  among  other  items,  a  summary  of  Borrower's
delinquency  and loss  experience  with  respect to any  Collateral  serviced by
Borrower,  any  Servicer  or any  designee of either,  plus any such  additional
reports as Lender may  reasonably  request  with  respect to  Borrower's  or any
Servicer's servicing portfolio or pending originations of Collateral.

         7.08  Transactions  with  Affiliates.  Borrower  will  not,  except  as
approved by Lender in writing, enter into any transaction in any manner relating
to any item of Collateral hereunder,  including without limitation any purchase,
sale,  lease or exchange of property or the  rendering of any service,  with any
Affiliate;  provided,  however,  that Lender may  consider for approval any such
transaction which is (a) otherwise  permitted under this Loan Agreement,  (b) in
the ordinary  course of  Borrower's  business  and (c) upon fair and  reasonable
terms no less  favorable to Borrower than it would obtain in a comparable  arm's
length  transaction  with a Person which is not an Affiliate,  or make a payment
under such transactions that is not otherwise  permitted by this Section 7.08 to
any Affiliate.  In no event shall Borrower pledge to Lender  hereunder any items
of Collateral  acquired by Borrower from an Affiliate of Borrower  other than an
Additional Borrower.

         7.09  Foreclosure  or  Other  Remediation  by  Borrower.  Borrower  may
propose,  and Lender will  consider but shall be under no obligation to approve,
strategies  for the  foreclosure  or other  realization  upon the  security  for
underlying loans held by Borrower relating to items of Collateral hereunder.


                                      -35-


<PAGE>



         7.10 Limitation on Liens.  Borrower will defend the Collateral against,
and will take such other action as is necessary  to remove,  any Lien,  security
interest or claim on or to the  Collateral,  other than the  security  interests
created,  or  otherwise  specifically  permitted in writing by Lender under this
Loan  Agreement,  and  Borrower  will  defend the right,  title and  interest of
Lender's in and to any of the  Collateral  against the claims and demands of all
persons whomsoever.  Borrower may request from time to time, subject to Lender's
approval in Lender's sole determination,  to sell participation interests in its
interests  in items of  Collateral,  the sale of which  participation  interests
shall be arm's length  transactions  and subject to such terms and conditions as
Lender in its sole discretion shall require.

         7.11 Limitation on  Distributions.  After the occurrence and during the
continuation  of any Event of  Default,  Borrower  shall not make any payment on
account of, or set apart assets for, a sinking or other  analogous  fund for the
purchase, redemption,  defeasance, retirement or other acquisition of any equity
or partnership interest of Borrower,  whether now or hereafter  outstanding,  or
make any other  distribution in respect thereof,  either directly or indirectly,
whether in cash or property or in obligations of Borrower.

         7.12  Maintenance  of  Ratio  of  Earnings  Before   Interest,   Taxes,
Depreciation  and  Amortization  to Interest and Preferred  Dividends.  Borrower
shall not permit the ratio of (a) earnings before interest,  taxes, depreciation
and  amortization  (excluding  dividends) to (b) the sum of (i) interest expense
and (ii)  preferred  dividends  (specifically  excluding any  convertible  trust
preferred dividends) to be less than 1.20:1.

         7.13  (a)  Maintenance of Ratio of Total  Indebtedness  to Tangible Net
Worth. Borrower shall not permit the ratio of Total Indebtedness to Tangible Net
Worth at any time to be  greater  than 3:1.  Lender  may  consider  waiving  the
foregoing  requirements  under certain  circumstances  if requested by Borrower;
however, Lender shall be under no obligation to do so.

               (b)  Maintenance  of  Ratio  of Total  Adjusted  Indebtedness  to
Tangible Net Worth.  In addition,  Borrower  shall not permit the ratio of Total
Adjusted  Indebtedness  to Tangible Net Worth to be greater than 2:1. Lender may
consider  waiving the  foregoing  requirements  under certain  circumstances  if
requested by Borrower; however, Lender shall be under no obligation to do so.

         7.14 Servicer;  Servicing Tape. Borrower shall provide to Lender on the
fifteenth  calendar day of each month, or if such day is not a Business Day then
on the first Business Day  immediately  following such day, a computer  readable
file containing servicing information, including without limitation those fields
specified  by  Lender  from  time to time,  on a  loan-by-loan  basis and in the
aggregate,  with  respect  to the  Mortgage  Loans,  Mezzanine  Loans and Equity
Interests  serviced  hereunder by Borrower or any Servicer.  Borrower  shall not
cause any  Collateral  to be  serviced  by any  servicer  other  than a servicer
expressly approved in writing by Lender.

         7.15 Remittance of Prepayments.  Borrower shall remit,  with sufficient
detail to enable Lender to  appropriately  identify the Loan, or Loans, to which
any  amount  remitted  applies,  to Lender on each  Business  Day all  principal
prepayments  that Borrower has received  during the previous  Business Day in an
amount  equal to the sum of the  Asset-Specific  Loan  Balances  being  prepaid,
together with all interest due thereon through the date of such remittance,  any
and all  charges  due with  respect  to such  Loans  and any and all  costs  and
expenses  incurred by Lender (as provided in this Loan  Agreement) in connection
with such Loans and the prepayment thereof.

         Section  8.  Events of  Default.  Each of the  following  events  shall
constitute an event of default (an "Event of Default") hereunder:

         (a) (i) Borrower  shall  default in the payment of any  principal of or
interest on any Loan when due (whether at stated maturity,  upon acceleration or
at mandatory or optional  prepayment);  or (ii) CT Mezz II shall  default in the
payment of any amount due under the Parent Guaranty when due.

                                      -36-


<PAGE>



         (b)  Borrower  shall  default  in the  payment of any  principal  of or
interest  on any MS  Indebtedness  when due  (whether at stated  maturity,  upon
acceleration or at mandatory or optional prepayment) or

         (c) Borrower  shall default in the payment of any other amount  payable
by it hereunder or under any other Loan Document after notification by Lender of
such default,  and such default shall have  continued  unremedied  for seven (7)
Business Days; or

         (d) any  representation,  warranty or certification made or deemed made
herein,  or in  any  other  Loan  Document  by  Borrower  or CT  Mezz  II or any
certificate  furnished to Lender  pursuant to the  provisions  hereof or thereof
shall prove to have been false or misleading  in any material  respect as of the
time made or furnished (other than the  representations and warranties set forth
in Section 6 hereof which shall be considered  solely for the purpose of Section
2.04(b)  hereof;  unless Borrower shall have made any such  representations  and
warranties with knowledge that they were  materially  false or misleading at the
time made); or

         (e)  Borrower  shall fail to comply  with the  requirements  of Section
6.14,  Section 7.03(a),  Section 7.04,  Section 7.05,  Section 7.06, or Sections
7.08 through 7.15 hereof;  or Borrower  shall  otherwise fail to comply with the
requirements  of Section 7.03 hereof and such default shall continue  unremedied
for a period of ten (10)  Business  Days;  or Borrower  shall fail to observe or
perform any other covenant or agreement  contained in this Loan Agreement or any
other Loan  Document  and such  failure to  observe  or perform  shall  continue
unremedied  for a period of ten (10) Business  Days; or CT Mezz II shall fail to
observe or perform any  covenant or agreement  contained in the Parent  Guaranty
and such failure to observe or perform shall continue unremedied for a period of
ten (10) Business Days; or

         (f) a final judgment or judgments for the payment of money in excess of
$5,000,000.00  in the aggregate shall be rendered against Borrower or CT Mezz II
or any of their  respective  Subsidiaries by one or more courts,  administrative
tribunals  or  other  bodies  having  jurisdiction  and the  same  shall  not be
satisfied,  discharged  (or provision  shall not be made for such  discharge) or
bonded, or a stay of execution thereof shall not be procured, within thirty (30)
days from the date of entry thereof,  and Borrower or any such Subsidiary  shall
not,  within said period of thirty (30) days, or such longer period during which
execution  of the same shall have been stayed or bonded,  appeal  therefrom  and
cause the execution thereof to be stayed during such appeal; or

         (g) Borrower or CT Mezz II shall admit in writing its  inability to pay
its debts as such debts become due; or

         (h)  Borrower  or CT Mezz II or any of  their  respective  Subsidiaries
shall  (i)  apply  for or  consent  to the  appointment  of,  or the  taking  of
possession  by, a receiver,  custodian,  trustee,  examiner or liquidator or the
like of  itself or of all or a  substantial  part of its  property,  (ii) make a
general assignment for the benefit of its creditors,  (iii) commence a voluntary
case under the Bankruptcy  Code, (iv) file a petition  seeking to take advantage
of  any  other  law   relating  to   bankruptcy,   insolvency,   reorganization,
liquidation,   dissolution,   arrangement  or  winding-up,   or  composition  or
readjustment  of  debts,  (v) fail to  controvert  in a timely  and  appropriate
manner,  or  acquiesce  in  writing  to,  any  petition  filed  against it in an
involuntary  case under the Bankruptcy  Code or (vi) take any corporate or other
action for the purpose of effecting any of the foregoing; or

         (i) a proceeding or case shall be commenced, without the application or
consent of Borrower or CT Mezz II or any of their  respective  Subsidiaries,  in
any  court  of   competent   jurisdiction,   seeking  (i)  its   reorganization,
liquidation,  dissolution,  arrangement  or  winding-up,  or the  composition or
readjustment of its debts,  (ii) the appointment of, or the taking of possession
by, a receiver, custodian, trustee, examiner, liquidator or the like of Borrower
or CT Mezz II or any such  Subsidiary or of all or any  substantial  part of its
property,  or (iii)  similar  relief in respect of Borrower or CT Mezz II or any
such   Subsidiary   under   any  law   relating   to   bankruptcy,   insolvency,
reorganization,   liquidation,   dissolution,   arrangement  or  winding-up,  or
composition or adjustment of debts,  and such  proceeding or case shall continue
undismissed,  or an order,  judgment or decree  approving or ordering any of the
foregoing shall be

                                      -37-


<PAGE>



entered and continue unstayed and in effect, for a period of thirty (30) or more
days;  or an  order  for  relief  against  Borrower  or CT Mezz  II or any  such
Subsidiary shall be entered in an involuntary case under the Bankruptcy Code; or

         (j) the  Custodial  Agreement or any Loan  Document  shall for whatever
reason  be  terminated  or  cease  to  be in  full  force  and  effect,  or  the
enforceability thereof shall be contested by Borrower; or

         (k)  Borrower  shall  grant,  or  suffer  to  exist,  any  Lien  on any
Collateral  except  the Liens  contemplated  hereby;  or the Liens  contemplated
hereby shall cease to be first  priority  perfected  Liens on the  Collateral in
favor of Lender or shall be Liens in favor of any Person other than Lender; or

         (l)  Borrower  or CT Mezz II or any of  their  respective  Subsidiaries
shall be in default under any note, indenture,  loan agreement,  guaranty,  swap
agreement  or  any  other  contract  to  which  it is a  party  (other  than  MS
Indebtedness),  which  default  (i)  involves  the  failure  to  pay  a  matured
obligation,  or (ii) permits the  acceleration of the maturity of obligations by
any other  party to or  beneficiary  of such note,  indenture,  loan  agreement,
guaranty, swap agreement or other contract, in any such case in which the amount
of such obligation or obligations, in the aggregate, exceed $10,000,000.00;

         (m) any materially adverse change in the Property,  business, financial
condition  or  prospects  of Borrower  or CT Mezz II or any of their  respective
Subsidiaries  shall  occur,  in each  case as  determined  by Lender in its sole
discretion,  or  any  other  condition  shall  exist  which,  in  Lender's  sole
discretion,  constitutes a material  impairment of Borrower's ability to perform
its obligations  under this Loan Agreement,  the Note or any other Loan Document
or the  ability  of CT Mezz II to  perform  their  obligations  under the Parent
Guaranty;

         (n) MS & Co.'s  corporate bond rating has been lowered or downgraded to
a rating  below A- by S&P or A3 by Moody's  and  Borrower  shall have  failed to
repay all amounts owing to Lender under this  Agreement,  the Note and the other
Loan Documents within 90 days following such downgrade;

         (o) either CTIMCO or a wholly-owned  Subsidiary of CIG shall not be the
investment manager of Borrower pursuant to the Investment  Management Agreement;
or

         (p) the matters set forth in the  certificate  delivered  by  Borrower,
CTMP II, CT Mezz II, CT-F2,  GREM II and CTI pursuant to paragraph 5.01(c) shall
at any time cease to be true.

         Section 9. Remedies Upon Default.
                    ---------------------

         (a) Upon the  occurrence  of one or more  Events of Default  other than
those  referred to in Section 8(g) or (h),  Lender may  immediately  declare the
principal amount of the Loans then outstanding  under the Note to be immediately
due and  payable,  together  with all  interest  thereon  and fees and  expenses
accruing under this Loan  Agreement.  Upon the occurrence of an Event of Default
referred  to in  Sections  8(g) or  (h),  such  amounts  shall  immediately  and
automatically  become due and payable  without any further action by any Person.
Upon  such  declaration  or  such  automatic  acceleration,   the  balance  then
outstanding  on the Note  shall  become  immediately  due and  payable,  without
presentment,  demand, protest or other formalities of any kind, all of which are
hereby expressly waived by Borrower.

         (b) Upon the occurrence of one or more Events of Default,  Lender shall
have the right to obtain  physical  possession of the Servicing  Records and all
other files of Borrower relating to the Collateral and all documents relating to
the  Collateral  which are then or may  thereafter  come in to the possession of
Borrower or any third party acting for Borrower  and Borrower  shall  deliver to
Lender such  assignments  as Lender shall  request.  Lender shall be entitled to
specific  performance  of all  agreements  of  Borrower  contained  in this Loan
Agreement.

         (c) Upon the  occurrence of an Event of Default,  without  limiting any
other  rights or remedies of Lender,  Lender shall have the right to set off and
apply any and all deposits (general or special,  time or demand,  provisional or
final) at any time held by or for account of Lender or Lender's

                                      -38-


<PAGE>




Affiliates to any  indebtedness at any time owing to Lender to the credit or for
the account of Borrower  against any and all of the  Indebtedness  of  Borrower,
irrespective  of  whether  Lender  shall  have made any  demand  under this Loan
Agreement,  the Note, any other Security Document or any other document executed
in connection with any other MS Indebtedness.

         Section 10. No Duty of Lender. The powers conferred on Lender hereunder
are solely to protect Lender's  interests in the Collateral and shall not impose
any duty upon it to exercise any such powers.  Lender shall be accountable  only
for  amounts  that it  actually  receives  as a result of the  exercise  of such
powers, and neither it nor any of its officers,  directors,  employees or agents
shall be responsible to Borrower for any act or failure to act hereunder, except
for its or their own gross negligence or willful misconduct.

         Section 11. Miscellaneous.
                     -------------

         11.01 Waiver. No failure on the part of Lender to exercise and no delay
in  exercising,  and no course of dealing with  respect to, any right,  power or
privilege under any Loan Document shall operate as a waiver  thereof,  nor shall
any single or partial  exercise of any right,  power or privilege under any Loan
Document  preclude any other or further  exercise thereof or the exercise of any
other right, power or privilege. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.

         11.02  Notices.  Except as otherwise  expressly  permitted by this Loan
Agreement,  all notices,  requests and other communications  provided for herein
and  under  the  Custodial   Agreement   (including   without   limitation   any
modifications  of, or waivers,  requests or consents under, this Loan Agreement)
shall be given or made in  writing  (including  without  limitation  by telex or
telecopy)  delivered  to the  intended  recipient  at the  "Address for Notices"
specified below its name on the signature pages hereof or thereof; or, as to any
party,  at such other  address as shall be designated by such party in a written
notice to each other party.  Except as otherwise provided in this Loan Agreement
and except for notices given under  Section 2 (which shall be effective  only on
receipt),  all such communications  shall be deemed to have been duly given when
transmitted  by telex or telecopy or  personally  delivered or, in the case of a
mailed notice, upon receipt, in each case given or addressed as aforesaid.

         11.03 Indemnification and Expenses. (a) Borrower agrees to hold Lender,
and its Affiliates and their officers, directors, employees, agents and advisors
(each an "Indemnified  Party") harmless from and indemnify any Indemnified Party
against all liabilities,  losses, damages,  judgments, costs and expenses of any
kind which may be imposed on, incurred by or asserted  against such  Indemnified
Party  (collectively,  the  "Costs")  relating  to or  arising  out of this Loan
Agreement,  the Note,  any other Loan Document or any  transaction  contemplated
hereby or thereby,  or any  amendment,  supplement  or  modification  of, or any
waiver or consent  under or in respect of, this Loan  Agreement,  the Note,  any
other Loan Document or any transaction  contemplated hereby or thereby, that, in
each case,  results  from  anything  other than any  Indemnified  Party's  gross
negligence  or  willful  misconduct.  Without  limiting  the  generality  of the
foregoing,  the Borrower agrees to hold any Indemnified  Party harmless from and
indemnify  such  Indemnified  Party  against  all  Costs  with  respect  to  all
Collateral  Loans  and  Equity  Interests  relating  to or  arising  out  of any
violation or alleged violation of any  environmental  law, rule or regulation or
any consumer credit laws,  including without limitation the Truth in Lending Act
and/or the Real Estate  Settlement  Procedures Act, that, in each case,  results
from anything other than such  Indemnified  Party's gross  negligence or willful
misconduct. In any suit, proceeding or action brought by an Indemnified Party in
connection with any Collateral for any sum owing  thereunder,  or to enforce any
provisions of any Collateral  Documents,  Borrower will save, indemnify and hold
such  Indemnified  Party  harmless from and against all expense,  loss or damage
suffered  by  reason  of  any  defense,  set-off,  counterclaim,  recoupment  or
reduction or liability  whatsoever of the account debtor or obligor  thereunder,
arising out of a breach by Borrower of any obligation  thereunder or arising out
of any other  agreement,  indebtedness  or  liability at any time owing to or in
favor of such  account  debtor  or  obligor  or its  successors  from  Borrower.
Borrower  also agrees to  reimburse an  Indemnified  Party as and when billed by
such  Indemnified  Party for all such  Indemnified  Party's  costs and  expenses
incurred  in  connection  with

                                      -39-


<PAGE>



the  enforcement or the  preservation of such  Indemnified  Party's rights under
this Loan  Agreement,  the Note,  any other  Loan  Document  or any  transaction
contemplated hereby or thereby, including without limitation the reasonable fees
and   disbursements  of  its  counsel.   Borrower  hereby   acknowledges   that,
notwithstanding  the fact  that  the  Note is  secured  by the  Collateral,  the
obligation of Borrower under the Note is a recourse obligation of the Borrower.

         (b)  Borrower  agrees to pay as and when  billed  by Lender  all of the
out-of-pocket  costs and  expenses  incurred  by Lender in  connection  with the
development,  preparation  and  execution of, and any  amendment,  supplement or
modification  to, this Loan Agreement,  the Note, any other Loan Document or any
other documents prepared in connection herewith or therewith. Borrower agrees to
pay as and when  billed by Lender all of the  out-of-pocket  costs and  expenses
incurred  in  connection  with  the  consummation  and   administration  of  the
transactions  contemplated  hereby and thereby including without  limitation (i)
all the  reasonable  fees,  disbursements  and expenses of counsel to Lender and
(ii) all the due  diligence,  inspection,  testing and review costs and expenses
incurred  by Lender  with  respect  to  Collateral  under  this Loan  Agreement,
including,  but not limited  to,  those  costs and  expenses  incurred by Lender
pursuant to Sections 11.03(a), 11.14 and 11.15 hereof.

         11.04 Amendments.  Except as otherwise  expressly provided in this Loan
Agreement,  any provision of this Loan Agreement may be modified or supplemented
only by an instrument in writing signed by Borrower and Lender and any provision
of this Loan Agreement may be waived by Lender.

         11.05 Successors and Assigns. This Loan Agreement shall be binding upon
and inure to the benefit of the parties hereto and their  respective  successors
and permitted assigns.

         11.06  Survival.  The  obligations  of Borrower under Sections 3.03 and
11.03 hereof shall  survive the  repayment of the Loans and the  termination  of
this Loan  Agreement.  In addition,  each  representation  and warranty  made or
deemed to be made by a request for a borrowing,  herein or pursuant hereto shall
survive the making of such representation and warranty,  and Lender shall not be
deemed to have waived,  by reason of making any Loan, any Default that may arise
because any such  representation  or  warranty  shall have proved to be false or
misleading,  notwithstanding  that  Lender may have had notice or  knowledge  or
reason to believe that such  representation  or warranty was false or misleading
at the time such Loan was made.

         11.07 Captions. The table of contents and captions and section headings
appearing  herein are included  solely for  convenience of reference and are not
intended to affect the interpretation of any provision of this Loan Agreement.

         11.08  Counterparts.  This Loan Agreement may be executed in any number
of  counterparts,  all of which taken together shall constitute one and the same
instrument,  and any of the parties  hereto may execute  this Loan  Agreement by
signing any such counterpart.

         11.09 Loan Agreement  Constitutes  Security  Agreement;  Governing Law.
This Loan  Agreement  shall be  governed by New York law  without  reference  to
choice of law doctrine,  and shall  constitute a security  agreement  within the
meaning of the Uniform Commercial Code.

         11.10 SUBMISSION TO JURISDICTION;  WAIVERS. BORROWER HEREBY IRREVOCABLY
AND UNCONDITIONALLY:

               (A)  SUBMITS FOR ITSELF AND ITS  PROPERTY IN ANY LEGAL  ACTION OR
         PROCEEDING RELATING TO THIS LOAN AGREEMENT, THE NOTE AND THE OTHER LOAN
         DOCUMENTS,  OR FOR  RECOGNITION  AND  ENFORCEMENT  OF ANY  JUDGMENT  IN
         RESPECT  THEREOF,  TO THE  NON-EXCLUSIVE  GENERAL  JURISDICTION  OF THE
         COURTS OF THE  STATE OF NEW  YORK,  THE  FEDERAL  COURTS OF THE  UNITED
         STATES OF AMERICA FOR THE SOUTHERN  DISTRICT OF NEW YORK, AND APPELLATE
         COURTS FROM ANY THEREOF;

                                      -40-


<PAGE>




               (B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
         SUCH COURTS AND, TO THE EXTENT  PERMITTED BY LAW,  WAIVES ANY OBJECTION
         THAT IT MAY NOW OR  HEREAFTER  HAVE TO THE VENUE OF ANY SUCH  ACTION OR
         PROCEEDING  IN ANY SUCH  COURT OR THAT SUCH  ACTION OR  PROCEEDING  WAS
         BROUGHT IN AN  INCONVENIENT  COURT AND AGREES NOT TO PLEAD OR CLAIM THE
         SAME;

               (C)  AGREES  THAT  SERVICE  OF  PROCESS  IN ANY  SUCH  ACTION  OR
         PROCEEDING  MAY BE EFFECTED BY MAILING A COPY THEREOF BY  REGISTERED OR
         CERTIFIED  MAIL (OR ANY  SUBSTANTIALLY  SIMILAR FORM OF MAIL),  POSTAGE
         PREPAID,  TO ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH
         OTHER ADDRESS OF WHICH LENDER SHALL HAVE BEEN NOTIFIED; AND

               (D) AGREES THAT  NOTHING  HEREIN SHALL AFFECT THE RIGHT TO EFFECT
         SERVICE OF PROCESS IN ANY OTHER MANNER  PERMITTED BY LAW OR SHALL LIMIT
         THE RIGHT TO SUE IN ANY OTHER JURISDICTION.

         11.11  WAIVER  OF  JURY  TRIAL.  EACH OF  BORROWER  AND  LENDER  HEREBY
IRREVOCABLY  WAIVES,  TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS LOAN AGREEMENT,  ANY OTHER LOAN DOCUMENT OR THE  TRANSACTIONS  CONTEMPLATED
HEREBY OR THEREBY.


         11.12 Acknowledgments. Borrower hereby acknowledges that:
               ---------------

         (a) it has been advised by counsel in the  negotiation,  execution  and
delivery of this Loan Agreement, the Note and the other Loan Documents;

         (b)  Lender  has  no  fiduciary   relationship  to  Borrower,  and  the
relationship  between Borrower and Lender is solely that of debtor and creditor;
and

         (c) no joint venture exists between Lender and Borrower.

         11.13  Hypothecation  or Pledge of Loans.  Lender  shall  have free and
unrestricted  use of all  Collateral  and nothing in this Loan  Agreement  shall
preclude Lender from engaging in repurchase  transactions with the Collateral or
otherwise pledging, repledging, transferring,  hypothecating, or rehypothecating
the  Collateral  or pledging  or  otherwise  transferring  its rights to payment
hereunder  in respect of any Loan made  hereunder;  provided,  that no action by
Lender referred to in this sentence shall confer on any Person other than Lender
any right against  Borrower to require any prepayment  under Section 2.04 hereof
or any  right to  enforce  against  Borrower  any other  provision  of this Loan
Agreement,  but may grant to any Person  the right to require  Lender to enforce
any such  provisions.  Nothing  contained in this Loan Agreement  shall obligate
Lender to segregate any Collateral delivered to Lender by Borrower.

         11.14 Servicing.
               ---------

         (a)  Borrower  covenants  to  maintain  or cause the  servicing  of the
Collateral to be maintained  with respect to each type of Collateral  pledged to
Lender hereunder in conformity with accepted and prudent servicing  practices in
the industry for such same type of Collateral  and in a manner at least equal in
quality to the servicing Borrower provides for assets similar to such Collateral
which it owns.  In the event  that the  preceding  language  is  interpreted  as
constituting one or more servicing

                                      -41-


<PAGE>



contracts,  each such servicing contract shall terminate  automatically upon the
earliest  of (i) an Event of  Default,  (ii) the date on which  all the  Secured
Obligations  have been paid in full or (iii) the transfer of servicing  approved
by  Borrower  and  Lender,  which  Lender's  consent  shall not be  unreasonably
withheld. Midland Loan Services, Inc. ("Midland") shall be the initial servicer.

         (b) If the Collateral, or any portion thereof, is serviced by Borrower,
(i)  Borrower  agrees that Lender is the  collateral  assignee of all  servicing
records,  including but not limited to any and all servicing agreements,  files,
documents,  records, data bases, computer tapes, copies of computer tapes, proof
of  insurance   coverage,   insurance   policies,   appraisals,   other  closing
documentation,  payment history  records,  and any other records  relating to or
evidencing the servicing of such Collateral (the "Servicing Records"),  and (ii)
Borrower  grants  Lender a security  interest in all  servicing  fees and rights
relating to such  Collateral and all Servicing  Records to secure the obligation
of Borrower or its designee to service in  conformity  with this Section and any
other  obligation of Borrower to Lender.  Borrower  covenants to safeguard  such
Servicing  Records  and to  deliver  them  promptly  to Lender  or its  designee
(including Custodian) at Lender's request.

         (c) If the Collateral,  or any portion thereof,  is serviced by a third
party servicer (such third party servicer,  the "Servicer"),  Borrower (i) shall
provide a copy of the servicing agreement to Lender,  which shall be in form and
substance  acceptable  to Lender (the  "Servicing  Agreement");  and (ii) hereby
irrevocably  assigns to Lender and  Lender's  successors  and assigns all right,
title, interest of Borrower in, to and under, and the benefits of, any Servicing
Agreement with respect to such  Collateral.  Any successor to the Servicer shall
be  approved  in  writing  by Lender  prior to such  successor's  assumption  of
servicing obligations with respect to such Collateral. The Travelers Real Estate
Investment Group ("Travelers") is hereby approved as a Servicer,  subject to (x)
there having  occurred no materially  adverse  change in  Travelers'  ability to
perform as Servicer  prior to the date of  Lender's  approval  hereunder  of any
servicing  agreement  between Borrower and Travelers and (y) the satisfaction by
Borrower  of clause (i) hereof and the  delivery  by  Borrower to Lender of such
additional  documentation as Lender may require to further evidence the security
interest  granted to Lender by Borrower in Borrower's  interest in any servicing
agreement entered into between Borrower and Travelers.

         (d)  Borrower  shall  provide  to  Lender a letter  from  Borrower  (if
Borrower is the  Servicer)  or the  Servicer,  as the case may be, to the effect
that upon the  occurrence  of an Event of  Default,  Lender  may  terminate  any
Servicing  Agreement  and  transfer  servicing  to its  designee,  at no cost or
expense to  Lender,  it being  agreed  that  Borrower  will pay any and all fees
required to terminate the Servicing  Agreement and to effectuate the transfer of
servicing to the designee of Lender.

         (e) After the  Funding  Date,  until the  pledge of any  Collateral  is
relinquished  by  Custodian,  Borrower will have no right to modify or alter the
terms of any of the documents  pertaining to such  Collateral  and Borrower will
have no obligation  or right to repossess  such  Collateral or substitute  other
Collateral,  except as provided in the Custodial Agreement;  provided,  however,
that so long as no Default or Event of Default has occurred  and is  continuing,
Borrower may enter into such  modifications of the terms of such documents as do
not, as to any individual item of Collateral,  (i) result in a negative monetary
effect or (ii) constitute a material adverse effect.

         (f) In the event Borrower or its Affiliate is servicing any Collateral,
Borrower shall permit Lender to inspect Borrower's or its Affiliate's  servicing
facilities,  as the case may be,  for the  purpose  of  satisfying  Lender  that
Borrower or its  Affiliate,  as the case may be, has the ability to service such
Collateral as provided in this Loan Agreement.

         (g) Borrower  shall cause the Servicer to provide a copy of each report
and notice sent to Borrower to be sent to Lender concurrently therewith.

         11.15 Periodic Due Diligence Review.  Borrower acknowledges that Lender
has the right to perform  continuing  due diligence  reviews with respect to the
Collateral,  for  purposes of  verifying  compliance  with the  representations,
warranties and specifications made hereunder,  or determining and re-determining
the Borrowing  Base under Section  2.04(a)  hereof,  or otherwise,  and Borrower
agrees that

                                      -42-


<PAGE>



Lender,  at its  option,  has the  right at any time to  conduct  a  partial  or
complete  due  diligence  review on any or all of the  Collateral  securing  the
Loans, including, without limitation, ordering new credit reports and Appraisals
on the applicable Collateral and otherwise  regenerating the information used to
originate such Eligible  Collateral.  Upon  reasonable (but no less than one (1)
Business Day) prior notice to Borrower, Lender or its authorized representatives
will be permitted  during normal  business hours to examine,  inspect,  and make
copies and extracts of, the Collateral Files and any and all documents, records,
agreements,  instruments  or  information  relating  to such  Collateral  in the
possession  or under the control of Borrower  and/or  Custodian.  Borrower  also
shall make available to Lender a knowledgeable  financial or accounting  officer
for the purpose of answering  questions  respecting the Collateral Files and the
Collateral.  Borrower  agrees to  cooperate  with  Lender  and any  third  party
underwriter   designated  by  Lender  in  connection  with  such   underwriting,
including,  but not limited to, providing Lender and any third party underwriter
with  access  to any and all  documents,  records,  agreements,  instruments  or
information relating to such Collateral in the possession, or under the control,
of Borrower.  Borrower  further agrees that Borrower shall reimburse  Lender for
any and all  out-of-pocket  costs and expenses  incurred by Lender in connection
with Lender's activities pursuant to this Section 11.15.

         11.16  Intent.  The parties  recognize  that each Loan is a "securities
contract"  as that term is  defined  in  Section  741 of Title 11 of the  United
States Code, as amended.

         11.17 Change of Borrower's State of Formation. If Borrower shall change
the State or  Country  under  whose  laws  Borrower  shall be  incorporated  and
organized,  Borrower  shall  promptly  provide  Lender  with a copy  of its  new
Declaration of Trust,  Articles of Incorporation or similar document,  certified
by the Secretary of State or other appropriate  official of Borrower's new State
or Country of formation,  if applicable,  together with such opinions of counsel
regarding such change as Lender, in its sole discretion, shall require.

         11.18  Set-Off.  In  addition  to any  rights  and  remedies  of Lender
provided by this Loan Agreement and by law, Lender shall have the right, without
prior notice to Borrower,  any such notice being expressly waived by Borrower to
the extent permitted by applicable law, upon any amount becoming due and payable
by  Borrower  hereunder  (whether at the stated  maturity,  by  acceleration  or
otherwise) to set-off and  appropriate and apply against such amount any and all
deposits  (general or special,  time or demand,  provisional  or final),  in any
currency,  and any other credits,  indebtedness or claims,  in any currency,  in
each case  whether  direct or  indirect,  absolute  or  contingent,  matured  or
unmatured,  at any time held or owing by Lender or any  Affiliate  thereof to or
for the credit or the  account of  Borrower.  Lender  agrees  promptly to notify
Borrower after any such set-off and  application  made by Lender;  provided that
the failure to give such notice  shall not affect the  validity of such  set-off
and application.

         11.19 Morgan  Stanley  Downgrade.  In the event (a) Morgan Stanley Dean
Witter & Co.'s  corporate bond rating as calculated by S&P or Moody's shall have
been lowered or  downgraded to a rating below A- as indicated by S&P or below A3
as indicated by Moody's and (b) Borrower  shall have repaid all amounts owing to
Lender under this agreement  written ninety (90) days following such  downgrade,
Lender  shall  refund to  Borrower  a portion  of the sum of (i) the fee paid to
Lender  pursuant  to  Section  5.01(a)(ii)  hereof and (ii) the  Maximum  Credit
Increase Fee paid to Lender hereunder, if any, in an amount equal to the product
of (1) such sum multiplied by (2) 30 basis points (0.30%)  multiplied by (3) the
quotient of (x) the number of days remaining to, and including,  the Termination
Date  divided by (y) the  number of days from and after the date  hereof to, and
including, the Termination Date.

         11.20 Special  Purpose Entity.  Borrower shall:  (a) not own any assets
nor engage in any  business  other than  owning the assets and  engaging  in the
transactions  specifically contemplated hereunder and under every other document
to be executed  pursuant to this Loan Agreement;  (b) not incur any indebtedness
or obligation,  secured or unsecured, direct or indirect, absolute or contingent
(including any guarantee thereof),  other than pursuant hereto; (c) not make any
loans or  advances to any third  party,  and shall not  acquire  obligations  or
securities  of any  of  its  Affiliates;  (d)  pay  its  debts  and  liabilities
(including, as applicable, shared personnel and overhead expenses) only from its
own assets; (e) comply


                                      -43-


<PAGE>



with the provisions of its organizational documents; (f) do all things necessary
to observe  organizational  formalities and to preserve its existence,  and will
not amend,  modify or otherwise change its organizational  documents,  or suffer
same to be amended,  modified or  otherwise  changed  without the prior  written
consent of Lender which shall not be unreasonably  withheld; (g) maintain all of
its books,  records,  financial statements and bank accounts separate from those
of its  Affiliates;  (h) be, and at all times will hold itself out to the public
as, a legal entity separate and distinct from any other entity (including any of
its Affiliates),  shall correct any known misunderstanding  regarding its status
as a separate entity, shall conduct business in its own name, shall not identify
itself or any of its  Affiliates  as a  division  or part of the other and shall
maintain and utilize  separate  stationary,  invoices  and checks;  (i) maintain
adequate capital for the normal obligations reasonably foreseeable in a business
of its size and character and in light of its contemplated  business operations;
(j) not engage in or suffer any change of  ownership,  dissolution,  winding up,
liquidation,  consolidation or merger in whole or in part; (k) not commingle its
funds or other assets with those of any of its  Affiliates  or any other Person;
(l) maintain its assets in such a manner that it will not be costly or difficult
to segregate,  ascertain or identify its individual  assets from those of any of
its  Affiliates  or any other  Person;  and (n)  cause  each of its  direct  and
indirect  owners  to  agree  not to (i) file or  consent  to the  filing  of any
bankruptcy,  insolvency or  reorganization  case or  proceeding  with respect to
Borrower;  institute any  proceedings  under any  applicable  insolvency  law or
otherwise  seek any relief  under any laws  relating to the relief from debts or
the  protection  of debtors  generally  with respect to  Borrower;  (ii) seek or
consent  to  the  appointment  of a  receiver,  liquidator,  assignee,  trustee,
sequester,  custodian  or any similar  official  for  Borrower or a  substantial
portion of its  properties;  or (iii)  make any  assignment  for the  benefit of
Borrower's creditors.

         11.21 Joint and Several Liability.  In the event of the existence of an
Additional  Borrower,  Initial  Borrower  and each  Additional  Borrower  hereby
acknowledge and agree that each entity shall be jointly and severally  liable to
Lender  for  all  representations,   warranties,   covenants,   obligations  and
indemnities of Borrower hereunder.

                            [SIGNATURE PAGE FOLLOWS]



                                      -44-

<PAGE>



         WITNESS WHEREOF,  the parties hereto have caused this Loan Agreement to
be duly  executed  and  delivered  as a deed as of the day and year first  above
written.

<TABLE>
<CAPTION>

<S>                                                 <C>
                                                    BORROWER

                                                    CTMP II FUNDING CORP. (MS),
                                                    a Cayman Islands exempt company


                                                    By:     /s/ Edward L. Shugrue, III
                                                            ------------------------------
                                                            Name:  Edward L. Shugrue, III
                                                            Title: Chief Financial Officer

                                                    Address for Notices:
                                                    -------------------

                                                    410 Park Avenue, 14th Floor
                                                    New York, New York 10022
                                                    Attention:  Edward L. Shugrue, III
                                                                Chief Financial Officer
                                                    Telecopier No.:(212) 655-0044
                                                    Telephone No.: (212) 655-0220

                                                    With a copy to:
                                                    Paul, Hastings, Janofsky & Walker LLP
                                                    75 East 55th Street
                                                    New York, New York 10022
                                                    Attention: John A. Cahill, Esq.
                                                    Telecopier No.: (212) 318-6876
                                                    Telephone No.:  (212) 318-6260


                                                    LENDER

                                                    MORGAN STANLEY DEAN WITTER MORTGAGE CAPITAL INC.

                                                    By:     /s/  Marc Flamino
                                                            ------------------------------
                                                            Name:  Marc Flamino
                                                            Title: Vice President

                                                    Address for Notices:
                                                    -------------------

                                                    1585 Broadway
                                                    New York, New York  10036
                                                    Attention:  Mr. Marc Flamino, Whole Loan Operations
                                                    Mortgage-Backed Securities Department,
                                                    Fixed-Income Division
                                                    Telecopier No.: (212) 761-0093
                                                    Telephone No.:  (212) 761-4243

                                                    With a copy to:
                                                    Clifford Chance Rogers & Wells LLP
                                                    200 Park Avenue
                                                    New York, New York 10166-0153
                                                    Attention: Frederick B. Utley, III, Esq.
                                                    Telecopier No.: (212) 878-8375
                                                    Telephone No.:  (212) 878-8356

</TABLE>



                                      -45-
<PAGE>



                                   SCHEDULE 1

                        FILING JURISDICTIONS AND OFFICES






                                      S-1
<PAGE>



                                   SCHEDULE 2

                               APPROVED APPRAISERS


1.         KTR Appraisal Services

2.         Cushman & Wakefield, Inc.

3.         Landauer Real Estate Counselors

4.         CB Commercial

5.         The Weitzman Group

6.         Greenwich Group

7.         Arthur Andersen

8.         Joseph Blake




                                      S-2
<PAGE>



                                   SCHEDULE 3

                               APPROVED ENGINEERS


1.         EMG

2.         KTR Realty Services

3.         Merritt & Harris, Inc.

4.         C.A. Rich, Inc.

5.         IVI

6.         Dames & Moore

7.         Law

8.         Echland

9.         EM&CA

10.        Acqua Terra

11.        ATC (BCM Engineers)

12.        Horn Chandler & Thomas




                                      S-3

<PAGE>



                                   SCHEDULE 4

                       APPROVED ENVIRONMENTAL CONSULTANTS


1.         Acqua Terra

2.         Law Environmental

3.         KTR Realty Services

4.         EMG

5.         Clayton

6.         Dames & Moore

7.         Brown & Root

8.         C.A. Rich, Inc.

9.         Echland

10.        EM&CA

11.        ATC (BCM Engineers)

12.        Front Royal

13.        IVI





                                      S-4
<PAGE>



                                                                       EXHIBIT A
                                                                       ---------


                            [FORM OF PROMISSORY NOTE]

$ 225,000,000.00                                             As of July 16, 2001
                                                              New York, New York

         FOR VALUE RECEIVED,  CTMP II FUNDING CORP. (MS), a company incorporated
under the laws of the Cayman Islands (the "Borrower"), hereby promises to pay to
the order of MORGAN STANLEY DEAN WITTER MORTGAGE CAPITAL INC. (the "Lender"), at
the principal office of Lender at 1585 Broadway,  New York, New York,  10036, in
lawful money of the United  States,  and in  immediately  available  funds,  the
principal sum of TWO HUNDRED TWENTY-FIVE MILLION DOLLARS  ($225,000,000.00)  (or
such lesser amount as shall equal the aggregate  unpaid  principal amount of the
Loans made by Lender to Borrower under the Loan Agreement),  on the dates and in
the principal amounts provided in the Loan Agreement, and to pay interest on the
unpaid  principal  amount of each such Loan,  at such office,  in like money and
funds, for the period  commencing on the date of such Loan until such Loan shall
be paid in full,  at the rates per annum and on the dates  provided  in the Loan
Agreement.

         The  date,  amount  and  interest  rate of each  Loan made by Lender to
Borrower,  and each payment made on account of the principal  thereof,  shall be
recorded  by  Lender on its  books  and,  prior to any  transfer  of this  Note,
endorsed by Lender on the schedule attached hereto or any continuation  thereof;
provided, that the failure of Lender to make any such recordation or endorsement
shall not affect the  obligations  of Borrower to make a payment when due of any
amount owing under the Loan  Agreement or hereunder in respect of the Loans made
by Lender.

         This  Note is the Note  referred  to in the  Master  Loan and  Security
Agreement  dated as of July 16,  2001 (as  amended,  supplemented  or  otherwise
modified and in effect from time to time, the "Loan Agreement") between Borrower
and Lender,  and evidences Loans made by Lender  thereunder.  Terms used but not
defined in this Note have the respective  meanings  assigned to them in the Loan
Agreement.

         Borrower agrees to pay all Lender's costs of collection and enforcement
(including  reasonable attorneys' fees and disbursements of Lender's counsel) in
respect of this Note when incurred,  including,  without limitation,  reasonable
attorneys' fees through appellate proceedings.

         Notwithstanding   the  pledge  of  the   Collateral,   Borrower  hereby
acknowledges,  admits and agrees that Borrower's obligations under this Note are
recourse  obligations of Borrower to which  Borrower  pledges its full faith and
credit.

         Borrower,  and any endorsers or guarantors  hereof, (a) severally waive
diligence,  presentment,  protest and demand and also notice of protest, demand,
dishonor and nonpayment of this Note, (b) expressly agree that this Note, or any
payment  hereunder,  may be  extended  from  time to time,  and  consent  to the
acceptance of further  Collateral,  the release of any Collateral for this Note,
the  release  of any party  primarily  or  secondarily  liable  hereon,  and (c)
expressly  agree that it will not be necessary  for Lender,  in order to enforce
payment of this Note, to first institute or exhaust  Lender's  remedies  against
Borrower or any other party  liable  hereon or against any  Collateral  for this
Note.  No  extension  of time for the payment of this Note,  or any  installment
hereof,  made by agreement by Lender with any person now or hereafter liable for
the  payment  of this  Note,  shall  affect  the  liability  under  this Note of
Borrower, even if Borrower is not a party to such agreement;  provided, however,
that Lender and Borrower,  by written  agreement  between  them,  may affect the
liability of Borrower.



                                      A-1


<PAGE>




         Any reference  herein to Lender shall be deemed to include and apply to
every  subsequent  holder of this Note.  Reference is made to the Loan Agreement
for  provisions  concerning  optional  and  mandatory  prepayments,  Collateral,
acceleration and other material terms affecting this Note.

         This Note  shall be  governed  by and  construed  under the laws of the
State of New York  (without  reference  to choice of law  doctrine)  whose  laws
Borrower expressly elects to apply to this Note. Borrower agrees that any action
or proceeding brought to enforce or arising out of this Note may be commenced in
the  Supreme  Court of the State of New York,  Borough of  Manhattan,  or in the
District Court of the United States for the Southern District of New York.

                                          CTMP II FUNDING CORP. (MS),
                                            a Cayman Islands exempt company


                                          By:     _______________________
                                                  Name: Edward L. Shugrue III
                                                  Title: Chief Financial Officer





                                      A-2
<PAGE>



                                SCHEDULE OF LOANS

This  Promissory  Note  evidences  Loans  made under the  within-described  Loan
Agreement  to  Borrower,  on the dates,  in the  principal  amounts  and bearing
interest  at the  rates  set  forth  below,  and  subject  to the  payments  and
prepayments of principal set forth below.

<TABLE>
<CAPTION>

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

  Name of       Date     Principal   Interest    Amount      Unpaid       Cumulative Total     Notation
Collateral      Made      Amount      Rate      Paid or     Principal    Unpaid Principal      Made by
                         of Loan                Prepaid      Amount          Amount
<S>            <C>       <C>         <C>        <C>         <C>          <C>                   <C>
-----------------------------------------------------------------------------------------------------------

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

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

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

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

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

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

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

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

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

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

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

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

</TABLE>

                                      A-3
<PAGE>


                                                                       EXHIBIT B
                                                                       ---------


                          [FORM OF CUSTODIAL AGREEMENT]
                         [STORED AS A SEPARATE DOCUMENT]







                                      B-1
<PAGE>



                                                                       EXHIBIT C
                                                                       ---------


                    [FORM OF OPINION OF COUNSEL OF BORROWER]






                                      C-1
<PAGE>


                                                                       EXHIBIT D
                                                                       ---------



                         [FORM OF REQUEST FOR BORROWING]

         Master  Loan and  Security  Agreement,  dated as of July 16,  2001 (the
"Loan and Security Agreement"),  by and between Borrower and Morgan Stanley Dean
Witter Mortgage Capital Inc. (the "Lender"),

<TABLE>
<CAPTION>

<S>                                            <C>
Lender:                                        Morgan Stanley Dean Witter Mortgage Capital Inc.

Borrower:                                      [NAME OF BORROWER]

Requested Fund Date:                           ------------------------------------------------

Transmission Date:                             ------------------------------------------------

Transmission time:                             ------------------------------------------------

[Type of Funding:
(Wet or Dry)                                   ------------------------------------------------]

[Type of Loan requested:
Committed or Uncommitted                       ------------------------------------------------]

</TABLE>

Number of Mortgage
Loans to be Pledged:                           ---------------------------------

Unpaid Principal Balance:                      $
                                                --------------------------------

Requested Wire Amount:                         $
                                                --------------------------------

Wire Instructions:

Requested by:

[NAME OF BORROWER]


By:
   -------------------------
   Name:
   Title:





                                      D-1
<PAGE>



                                                                       EXHIBIT E
                                                                       ---------


                        [FORM OF LENDER'S RELEASE LETTER]

                                     (Date)

Morgan Stanley Dean Witter Mortgage Capital Inc.
1585 Broadway
New York, New York 10036
Attention:
           -------------------------------
Facsimile:
           -------------------------------

Re: Certain  Collateral  Identified on Schedule A hereto and owned by [BORROWER]



         The undersigned hereby releases all right,  interest,  lien or claim of
any kind with respect to the  Collateral  described in the attached  Schedule A,
such release to be  effective  automatically  without any further  action by any
party upon payment in one or more installments,  in immediately  available finds
of $__________, in accordance with the following wire instructions:


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


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

                                              Very truly yours,

                                              [LENDER]

                                              By:
                                                 ------------------------------
                                                 Name:
                                                 Title:

                                      E-1
<PAGE>



                                                                       EXHIBIT F
                                                                       ---------


                           [FORM OF BAILEE AGREEMENT]





                                      F-1


</TEXT>
</DOCUMENT>
