Exhibit 10.2

EXECUTION VERSION

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into
as of December 20, 2010 by and among Colony Financial, Inc., a Maryland
corporation (the “Company”), and the investors set forth on the signature page
hereto (the “Investors”).

WHEREAS, the Investors have, pursuant to the terms of the Securities Purchase
Agreement dated as of December 20, 2010 by and among the Company and each of the
Investors (the “Securities Purchase Agreement”), agreed to purchase shares of
common stock, par value $0.01 per share, of the Company (the “Common Stock”), in
the amounts and for the consideration set forth in the Securities Purchase
Agreement;

WHEREAS, the Common Stock was issued to the Investors in a transaction exempt
from the registration requirements of the Securities Act of 1933, as amended
(the “Securities Act”), and the shares of Common Stock are “restricted
securities” as that term is defined in Rule 144 promulgated under the Securities
Act; and

WHEREAS, the Company and the Investors desire to define the registration rights
of the Investors on the terms and subject to the conditions herein set forth.

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

SECTION 1. REGISTRATION RIGHTS

1.1 Registration Statement.

(a) The Company shall use its reasonable best efforts to file with the U.S.
Securities and Exchange Commission (the “SEC”), within 90 days following the
Closing Date (as defined in the Securities Purchase Agreement), a registration
statement (the “Registration Statement”) covering the registration of a
secondary resale offering of all Registrable Securities (as defined below)
pursuant to Rule 415 under the Securities Act and or any similar rule that may
be adopted by the SEC. The Registration Statement shall be on Form S-3, unless
the Company is not then eligible to file a registration statement on Form S-3
under the Securities Act, in which case such registration statement shall be on
Form S-11 or other appropriate form under the Securities Act which the Company
is then eligible to file.

(b) The Company agrees (subject to Section 1.3 hereof) to use commercially
reasonable efforts to cause the Registration Statement to be declared effective
by the SEC as soon as practicable after the filing thereof. Subject to
Section 1.3 hereof, the Company agrees to use commercially reasonable efforts to
keep the Registration Statement continuously effective (including the
preparation and filing of any amendments and supplements necessary for that
purpose) under the Securities Act for a period that will terminate upon the
earlier of (i) the date on which all Registrable Securities covered by the
Registration Statement have been sold and (ii)

 

(Signature Page to Registration Rights Agreement)

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the date on which all of the Registrable Securities covered by the Registration
Statement may be sold without restriction or limitation pursuant to Rule 144 and
without the requirement to be in compliance with Rule 144(c)(1) (or any
successor thereto) under the Securities Act (the “Effectiveness Period”).

(c) As used in this Agreement, “Registrable Securities” refer to any shares of
Common Stock issued to an Investor pursuant to the Securities Purchase Agreement
(including, without limitation, Common Stock issued to an Investor pursuant to
the “Anti-Dilution Purchase Price Adjustment” or the “Registration Statement
Purchase Price Adjustment,” in each case as defined in the Securities Purchase
Agreement) or issued to an Investor with respect to the such shares of Common
Stock by way of stock dividend or stock split or in connection with a
combination of stock, recapitalization, merger, consolidation or other
reorganization or otherwise and any shares of voting common stock issuable upon
conversion, exercise or exchange thereof.

1.2 Black-Out Period.

(a) Each Investor hereby agrees that it shall not, to the extent requested by
the Company or an underwriter of securities of the Company, directly or
indirectly sell, offer to sell (including without limitation any short sale),
grant any option or otherwise transfer or dispose of any Registrable Securities
(other than to donees or affiliates of such Investor who agree to be similarly
bound) within ten (10) days prior to and for up to sixty (60) days, in the event
of any subsequent offering, following the effective date of a registration
statement of the Company filed under the Securities Act or the date of an
underwriting agreement with respect to an underwritten public offering of the
Company’s securities (the “Black-Out Period”); provided, however, that:

(i) all executive officers and directors of the Company then holding Common
Shares shall enter into similar agreements; and

(ii) Investor shall be allowed any concession or proportionate release allowed
to any officer or director of the Company that entered into similar agreements.

(b) In order to enforce the foregoing covenant, the Company shall have the right
to place restrictive legends on the certificates representing the Registrable
Securities subject to this Section 1.2 and to impose stop transfer instructions
with respect to the Registrable Securities. If requested by the Company, the
Investors shall execute a separate agreement with respect to the foregoing
covenant in this Section 1.2.

1.3 Suspension of Offering.

(a) The Company shall have the right, but not the obligation, to postpone the
filing of the Registration Statement or to suspend the use of the Registration
Statement following the effectiveness of the Registration Statement (and the
filings with any international, federal or state securities commissions), if a
Suspension Event (as defined below) occurs. If the Company elects to suspend the
effectiveness and/or use of the Registration Statement following the occurrence
of a Suspension Event, the Company, by written notice, email transmission or
such other means that the Company reasonably believes to be a reliable means of
communication (a

 

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“Suspension Notice”), shall notify the Investors, that the effectiveness of the
Registration Statement has been suspended and shall direct the Investors to
suspend sales of the Registrable Securities pursuant to the Registration
Statement until the Suspension Event has ended. A Suspension Event shall be
deemed to have occurred if: (i) the Company is actively pursuing an underwritten
primary offering of equity securities; (ii) the Company in good faith determined
that (A) the offer or sale of any Registrable Securities would materially
impede, delay or interfere with any proposed financing, offer or sale of
securities, acquisition, corporate reorganization or other significant
transaction involving the Company; (B) after the advice of counsel, sale of
Registrable Securities pursuant to the Registration Statement would require
disclosure of non-public material information not otherwise required to be
disclosed under applicable law; and (C)(x) the Company has a bona fide business
purposes for preserving the confidentiality of such transaction, (y) disclosure
would have a material adverse effect on the Company or the Company’s ability to
consummate such transaction, or (z) disclosure would render the Company unable
to comply with SEC requirements, in each case under circumstances that would
make it impractical or inadvisable to cause the Registration Statement (or such
filings) to become effective or to promptly amend or supplement the Registration
Statement on a post-effective basis, as applicable; or (iii) the Company shall
have determined in good faith, after the advice of counsel, that it is required
by law, rule or regulation or that it is in the best interests of the Company to
supplement the Registration Statement or file a post-effective amendment to the
Registration Statement in order to incorporate information into the Registration
Statement for the purpose of (1) including in the Registration Statement any
prospectus required under Section 10(a)(3) of the Securities Act; (2) reflecting
in the prospectus included in the Registration Statement any facts or events
arising after the effective date of the Registration Statement (or of the
most-recent post-effective amendment) that, individually or in the aggregate,
represents a fundamental change in the information set forth therein; or
(3) including in the prospectus included in the Registration Statement any
material information with respect to the plan of distribution not disclosed in
the Registration Statement or any material change to such information. Upon the
occurrence of any Suspension Event, the Company shall use its commercially
reasonable efforts to cause the Registration Statement to become effective or to
promptly amend or supplement the Registration Statement or to take such action
as is necessary to make resumed use of the Registration Statement compatible
with the Company’s best interests, as applicable, so as to permit the Investors
to resume sales of the Registrable Securities as soon as practicable. In no
event shall the Company be permitted to suspend the use of a Registration
Statement for more than thirty (30) consecutive days or for more than 75 days in
any 12 month period, except as a result of a refusal by the SEC to declare any
post-effective amendment to the Registration Statement effective after the
Company has used all commercially reasonable efforts to cause such
post-effective amendment to be declared effective, in which case the Company
shall terminate the suspension of the use of the Registration Statement
immediately following the effective date of the post-effective amendment.

(b) In the case of an event that the Company gives a Suspension Notice to the
Investors to suspend sales of the Registrable Securities following a Suspension
Event, the Investors shall not effect any sales of the Registrable Securities
pursuant to such Registration Statement (or such filings) at any time after it
has received a Suspension Notice from the Company and prior to receipt of an End
of Suspension Notice (as defined below). If so directed by the Company, each
Investor will deliver to the Company (at the expense of the Company) all

 

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copies other than permanent file copies then in such Investor’s possession of
the Prospectus covering the Registrable Securities (the “Prospectus”) at the
time of receipt of the Suspension Notice. The Investors may recommence effecting
sales of the Registrable Securities pursuant to the Registration Statement (or
such filings) upon the delivery by the Company of notice that the Suspension
Event or its potential effects are no longer continuing (an “End of Suspension
Notice”), which End of Suspension Notice shall be given by the Company to the
Investors in the same manner as the Suspension Notice promptly following the
conclusion of any Suspension Event and its effect.

(c) If all reports required to be filed by the Company pursuant to the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), have not been
filed by the required date taking into account any permissible extension, upon
written notice thereof by the Company to the Investors, the rights of the
Investors to offer, sell or distribute any Registrable Securities pursuant to
any Registration Statement or to require the Company to take action with respect
to the registration or sale of any Registrable Securities pursuant to any
Registration Statement shall be suspended until the date on which the Company
has filed such reports, and the Company shall notify the Investors in writing as
promptly as practicable when such suspension is no longer required.

1.4 Qualification. The Company shall use commercially reasonable efforts to
register or qualify the Registrable Securities to be covered by a Registration
Statement by the time such Registration Statement is declared effective by the
SEC under all applicable state securities or “blue sky” laws of such
jurisdictions as any Investor may reasonably request in writing, and shall use
commercially reasonable efforts to keep each such registration or qualification
effective during the period such Registration Statement is required to be kept
effective pursuant to this Agreement or during the period offers or sales are
being made by the Investors, whichever is shorter, and to do any and all other
similar acts and things which may be reasonably necessary or advisable to enable
the Investors to consummate the disposition of such Registrable Securities in
each such jurisdiction; provided, however, that the Company shall not be
required to (i) qualify generally to do business in any jurisdiction or to
register as a broker or dealer in such jurisdiction where it would not otherwise
be required to qualify but for this Agreement, (ii) take any action that would
cause it to become subject to any taxation in any jurisdiction where it would
not otherwise be subject to such taxation or (iii) take any action that would
subject it to the general service of process in any jurisdiction where it is not
then so subject.

1.5 Piggyback Registration.

(a) If, at any time and during the Effectiveness Period, the Registration
Statement is not effective and the Company proposes to file a registration
statement under the Securities Act with respect to an offering of equity
securities by the Company for its own account or for any of the other security
holders of the Company for their account, then the Company shall (i) give
written notice of such proposed filing and/or offering to all Investors as soon
as practicable but in no event less than ten (10) business days prior to the
anticipated filing date of the registration statement, which notice shall
describe the amount and type of securities to be included in such offering, the
intended method(s) of distribution, and the name of the proposed managing
underwriter(s), if any, of the offering, and (ii) offer to the Investors in such

 

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notice the opportunity to register the sale of such number of Registrable
Securities as such Investors may request in writing within five (5) business
days following receipt of such notice (a “Piggy-Back Registration”). If at any
time after giving written notice of its intention to register any securities and
prior to the effective date of the registration statement filed in connection
with such registration, the Company shall determine for any reason not to
register or to delay registration of such securities, the Company may, at its
election, give written notice of such determination to each Investor and, (x) in
the case of a determination not to register, shall be relieved of its obligation
to register any Registrable Securities in connection with such registration, and
(y) in the case of a determination to delay registering, shall be permitted to
delay registering any Registrable Securities for the same period as the delay in
registering such other securities. The Company shall cause all of the
Registrable Securities requested to be included in a non-underwritten
registration in such registration, and shall use its reasonable best efforts to
cause the managing underwriter(s) of a proposed underwritten offering to permit
the Registrable Securities requested to be included in a Piggy-Back Registration
on the same terms and conditions as any similar securities of the Company
included therein and to permit the sale or other disposition of such Registrable
Securities in accordance with the intended method(s) of distribution
thereof. All Investors proposing to distribute their securities through a
Piggy-Back Registration that involves an underwriter(s) shall (i) enter into an
underwriting agreement in reasonable and customary form with the
underwriter(s) selected by the Company for such Piggy-Back Registration and
(ii) complete and execute all lock-up agreements, questionnaires,
powers-of-attorney, indemnities, opinions and other documents reasonably
required under the terms of such underwriting agreement.

(b) If the underwriter(s) for a Piggy-Back Registration that is to be an
underwritten offering advises the Company and the Investors that in their
opinion the dollar amount or number of shares of common stock or other
securities that the Company desires to sell, taken together with shares of
common stock or other securities, if any, as to which registration has been
demanded pursuant to written contractual arrangements with persons other than
the Investors, the Registrable Securities as to which registration has been
requested under this Section 1.5, and the shares of common stock or other
securities, if any, as to which registration has been requested pursuant to the
written contractual piggy-back registration rights of other stockholders of the
Company, exceeds the maximum dollar amount or maximum number of securities that
can be sold in such offering without adversely affecting the proposed offering
price, the timing, the distribution method, or the probability of success of
such offering (such maximum dollar amount or maximum number of securities, as
applicable, the “Maximum Threshold”), then the Company shall include in any such
registration:

(x) if the registration is undertaken for the Company’s account: (i) first, the
shares of common stock or other securities that the Company desires to sell that
can be sold without exceeding the Maximum Threshold; (ii) second, to the extent
that the Maximum Threshold has not been reached under the foregoing clause (i),
the shares of common stock or other securities for the account of the persons
party to that certain Registration Rights Agreement, dated as of September 29,
2010, among the Company, Colony Financial Manager, LLC and other purchasers
party thereto (the “Existing Investors”) and that can be sold without exceeding
the Maximum Threshold; (iii) third, to the extent that the Maximum Threshold has
not been reached under the foregoing clauses (i) and (ii), the Registrable
Securities as to which

 

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registration has been requested pursuant to the terms hereof pro rata in
accordance with the number of Registrable Securities which such Investors have
requested be included in such underwritten offering, regardless of the number of
Registrable Securities or other securities held by each such person (such
proportion is referred to herein as “Pro Rata Adjusted”) that can be sold
without exceeding the Maximum Threshold; and (iv) fourth, to the extent that the
Maximum Threshold has not been reached under the foregoing clauses (i), (ii) and
(iii), the shares of common stock or other securities for the account of other
persons that the Company is obligated to register pursuant to written
contractual piggy-back registration rights (entered into after the date hereof)
with such persons and that can be sold without exceeding the Maximum Threshold;
and

(y) if the registration is a “demand” registration undertaken at the demand of
Persons other than holders of Registrable Securities hereunder, (i) first, the
shares of common stock or other securities for the account of such demanding
persons that can be sold without exceeding the Maximum Threshold; (ii) second,
to the extent that the Maximum Threshold has not been reached under the
foregoing clause (i), the shares of common stock or other securities that the
Company desires to sell that can be sold without exceeding the Maximum
Threshold; (iii) third, to the extent that the Maximum Threshold has not been
reached under the foregoing clauses (i) and (ii) and the registration undertaken
is at the demand of persons other than the Existing Investors, the shares of
common stock or other securities for the account of the Existing Investors and
that can be sold without exceeding the Maximum Threshold, (iv) fourth, the
Registrable Securities as to which registration has been requested pursuant to
the terms hereof, Pro Rata Adjusted, that can be sold without exceeding the
Maximum Threshold; and (v) fifth, to the extent that the Maximum Threshold has
not been reached under the foregoing clauses (i), (ii), (iii) and (iv), the
shares of common stock or other securities, if any, for the account of other
persons that the Company is obligated to register pursuant to written
contractual piggy-back registration rights with such persons that can be sold
without exceeding the Maximum Threshold.

(c) Any Investors may elect to withdraw such Investor’s request for inclusion of
Registrable Securities in any Piggy-Back Registration by giving written notice
to the Company of such request to withdraw prior to the effectiveness of the
registration statement. The Company (whether on its own determination or as the
result of a withdrawal by persons making a demand pursuant to written
contractual obligations) may withdraw a registration statement for a Piggey-Back
Registration at any time prior to the effectiveness of the registration
statement without thereby incurring any liability to the Investors.

1.6 Obligations of the Company. In connection with the registration of
Registrable Securities under the Securities Act pursuant to Section 1.1 and
Section 1.5, subject to Section 1.3 hereof, the Company shall:

(a) prepare and file with the SEC such amendments (including post-effective
amendments) and supplements as to the Registration Statement and the Prospectus
used in connection therewith as may be necessary (i) to keep such Registration
Statement effective (subject to Sections 1.1(b) and 1.5(c)) and (ii) to comply
with the provisions of the Securities Act with respect to the disposition of the
Registrable Securities covered by such Registration Statement, in each case for
such time as is contemplated in Section 1.1;

 

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(b) furnish, without charge, to the Investors such number of copies of the
Registration Statement, each amendment and supplement thereto (in each case
including all exhibits, but excluding any documents to be incorporated by
reference therein that are publicly available on the SEC’s Electronic Data
Gathering, Analysis and Retrieval system (“EDGAR”)), and the Prospectus included
in such Registration Statement (including each preliminary Prospectus) in
conformity with the requirements of the Securities Act as the Investors may
reasonably request in order to facilitate the public sale or other disposition
of the Registrable Securities owned by the Investors;

(c) as promptly as reasonably practicable notify the Investors: (i) when the
Registration Statement, any pre-effective amendment, the Prospectus or any
prospectus supplement related thereto or post-effective amendment to the
Registration Statement has been filed, and, with respect to the Registration
Statement or any post-effective amendment, when the same has become effective,
(ii) of the issuance by the SEC of any stop order suspending the effectiveness
of the Registration Statement or the initiation or threat of any proceedings for
that purpose, and (iii) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any Registrable Securities for
sale under the securities or “blue sky” laws of any jurisdiction or the
initiation of any proceeding for such purpose;

(d) use commercially reasonable efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement, and, if any such order
suspending the effectiveness of a Registration Statement is issued, shall use
commercially reasonable efforts to obtain the withdrawal of such order at the
earliest possible moment;

(e) following filing of the Registration Statement and thereafter until the
sooner of completion, abandonment or termination of the offering or sale
contemplated thereby and the expiration of the period during which the Company
is required to maintain the effectiveness of the related Registration Statement,
as promptly as reasonably practicable notify the Investors: (i) of the existence
of any fact of which the Company is aware or the happening of any event which
has resulted in (A) the Registration Statement, as then in effect, containing an
untrue statement of a material fact or omitting to state a material fact
required to be stated therein or necessary to make any statements therein not
misleading or (B) the Prospectus included in such Registration Statement
containing an untrue statement of a material fact or omitting to state a
material fact required to be stated therein or necessary to make any statements
therein, in the light of the circumstances under which they were made, not
misleading, and (ii) of the Company’s reasonable determination that a
post-effective amendment to the Registration Statement would be appropriate or
that there exist circumstances not yet disclosed to the public which make
further sales under such Registration Statement inadvisable pending such
disclosure and post-effective amendment; and, if the notification relates to any
event described in either of clauses (i) or (ii) of this Section 1.6(e), subject
to Section 1.3 above, at the request of the Investors, the Company shall prepare
and, to the extent the exemption from the prospectus delivery requirements in
Rule 172 under the Securities Act is not available, furnish to the Investors a
reasonable number of copies of a supplement or post-effective amendment to such
Registration Statement or related Prospectus or file any other required document
so that (1) such Registration Statement shall not contain any untrue statement
of a material fact or omit to state a

 

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material fact required to be stated therein or necessary to make the statements
therein not misleading and (2) as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder, such Prospectus shall not include
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading;

(f) use commercially reasonable efforts to cause all such Registrable Securities
to be listed on the national securities exchange on which the Company’s common
shares are then listed, if the listing of Registrable Securities is then
permitted under the rules of such national securities exchange; and

(g) if requested by any Investor participating in the offering of Registrable
Securities, incorporate in a prospectus supplement or post-effective amendment
such information concerning the Investor or the intended method of distribution
as the Investor reasonably requests to be included therein and is reasonably
necessary to permit the sale of the Registrable Securities pursuant to the
Registration Statement, including, without limitation, information with respect
to the number of Registrable Securities being sold, the purchase price being
paid therefor and any other material terms of the offering of the Registrable
Securities to be sold in such offering; provided, however, that the Company
shall not be obligated to include in any such prospectus supplement or
post-effective amendment any requested information that is not required by the
rules of the SEC and is unreasonable in scope compared with the Company’s most
recent prospectus or prospectus supplement used in connection with a primary or
secondary offering of equity securities by the Company.

1.7 Obligations of the Investor. In connection with any Registration Statement
utilized by the Company to satisfy the Registration Rights pursuant to this
Section 1, each Investor agrees to cooperate with the Company in connection with
the preparation of the Registration Statement, and each Investor agrees that it
will (i) respond within ten (10) Business Days to any written request by the
Company to provide or verify information regarding the Investor or the
Investor’s Registrable Securities (including the proposed manner of sale) that
may be required to be included in such Registration Statement and related
Prospectus pursuant to the rules and regulations of the SEC, and (ii) provide in
a timely manner information regarding the proposed distribution by the Investor
of the Registrable Securities and such other information as may be requested by
the Company from time to time in connection with the preparation of and for
inclusion in the Registration Statement and related Prospectus. As used in this
Agreement, a “Business Day” is any Monday, Tuesday, Wednesday, Thursday or
Friday other than a day on which banks and other financial institutions are
authorized or required to be closed for business in the State of New York.

1.8 Late Registration. The parties hereto acknowledge that if the Registration
Statement has not been declared effective by the SEC within 270 days of the
Closing Date (as defined in the Securities Purchase Agreement), then the
Investors shall be entitled to the Registration Statement Purchase Price
Adjustment set forth in Section 2.5 of the Securities Purchase Agreement,
subject to the limitations set forth in Sections 2.5 and 2.6 of the Securities
Purchase Agreement. For the avoidance of doubt, this Section 1.8 is solely an
acknowledgment and does not confer on the Investors any additional rights or
remedies hereunder or under the Securities Purchase Agreement.

 

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SECTION 2. INDEMNIFICATION; CONTRIBUTION

2.1 Indemnification by the Company. The Company agrees to indemnify and hold
harmless each Investor and each person, if any, who controls any Investor within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, and any of their partners, members, officers, directors, employees or
representatives, as follows:

(i) against any and all loss, liability, claim, damage, judgment and expense
whatsoever, as incurred, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto) pursuant to which the Registrable
Securities were registered under the Securities Act, including all documents
incorporated therein by reference, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Prospectus (or any amendment or supplement thereto), including all documents
incorporated therein by reference, or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;

(ii) against any and all loss, liability, claim, damage, judgment and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of the
Company; and

(iii) against any and all expense whatsoever, as incurred (including reasonable
fees and disbursements of counsel), reasonably incurred in investigating,
preparing or defending against any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, in each case whether
or not a party, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under subparagraph (i) or (ii) above;

provided, however, that the indemnity provided pursuant to this Section 2.1 does
not apply to any Investor with respect to any loss, liability, claim, damage,
judgment or expense to the extent arising out of (A) any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with information furnished to the Company by such Investor through an
instrument duly executed, or otherwise through a communication transmitted, by
such Investor specifically stating that it is for use in the preparation of such
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto); or (B) any Investor’s failure to deliver an
amended or supplemental Prospectus furnished to such Investor by the Company, if
such loss, liability, claim, damage, judgment or expense would not have arisen
had such delivery occurred.

 

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2.2 Indemnification by Investor.

(a) Each Investor (and each permitted assignee of such Investor, on a several
basis) severally and not jointly agrees to indemnify and hold harmless the
Company, and each of its directors and officers (including each director and
officer of the Company who signed a Registration Statement), and each person, if
any, who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, as follows:

(i) against any and all loss, liability, claim, damage, judgment and expense
whatsoever, as incurred, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto) pursuant to which the Registrable
Securities of such Investor were registered under the Securities Act, including
all documents incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out of or based upon
any untrue statement or alleged untrue statement of a material fact contained in
any Prospectus (or any amendment or supplement thereto), including all documents
incorporated therein by reference, or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;

(ii) against any and all loss, liability, claim, damage, judgment and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of such
Investor; and

(iii) against any and all expense whatsoever, as incurred (including reasonable
fees and disbursements of counsel), reasonably incurred in investigating,
preparing or defending against any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, in each case whether
or not a party, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under subparagraph (i) or (ii) above;

provided, however, that the indemnity provided pursuant to this Section 2.2
shall only apply with respect to any loss, liability, claim, damage, judgment or
expense to the extent arising out of (A) any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by such Investor through an
instrument duly executed, or otherwise through a communication transmitted, by
such Investor specifically stating that it is for use in the preparation of such
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto); or (B) any

 

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Investor’s failure to deliver an amended or supplemental Prospectus furnished to
such Investor by the Company, if such loss, liability, claim, damage, judgment
or expense would not have arisen had such delivery occurred.

(b) In no event shall the amounts paid or payable by any Investor, in respect of
the obligations of such Investors under this Section 2.2, exceed an amount equal
to the gross proceeds received by such Investor from sales of Registrable
Securities pursuant to the registration statement(s) referred to in Sections 1.1
and 1.5 hereof.

2.3 Conduct of Indemnification Proceedings. An indemnified party hereunder shall
give reasonably prompt notice to the indemnifying party of any action or
proceeding commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify the indemnifying party (i) shall not relieve
it from any liability which it may have under the indemnity agreement provided
in Sections 2.1 or 2.2 above, unless and only to the extent it did not otherwise
learn of such action and the lack of notice by the indemnified party results in
the forfeiture by the indemnifying party of substantial rights and defenses, and
(ii) shall not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided under Sections 2.1 or 2.2 above. If the indemnifying party so elects
within a reasonable time after receipt of such notice, the indemnifying party
may assume the defense of such action or proceeding at such indemnifying party’s
own expense with counsel chosen by the indemnifying party and approved by the
indemnified party, which approval shall not be unreasonably withheld; provided,
however, that the indemnifying party will not settle, compromise or consent to
the entry of any judgment with respect to any such action or proceeding without
the written consent of the indemnified party unless such settlement, compromise
or consent secures the unconditional release of the indemnified party; and
provided further, that, if the indemnified party reasonably determines that a
conflict of interest exists where it is advisable for the indemnified party to
be represented by separate counsel or that, upon advice of counsel, there may be
legal defenses available to it which are different from or in addition to those
available to the indemnifying party, then the indemnifying party shall not be
entitled to assume such defense and the indemnified party shall be entitled to
separate counsel at the indemnifying party’s expense. If the indemnifying party
is not entitled to assume the defense of such action or proceeding as a result
of the second proviso to the preceding sentence, the indemnifying party’s
counsel shall be entitled to conduct the indemnifying party’s defense and
counsel for the indemnified party shall be entitled to conduct the defense of
the indemnified party, it being understood that both such counsel will cooperate
with each other to conduct the defense of such action or proceeding as
efficiently as possible. If the indemnifying party is not so entitled to assume
the defense of such action or does not assume such defense, after having
received the notice referred to in the first sentence of this paragraph, the
indemnifying party will pay the reasonable fees and expenses of counsel for the
indemnified party. In such event, however, the indemnifying party will not be
liable for any settlement effected without the written consent of the
indemnifying party. If an indemnifying party is entitled to assume, and assumes,
the defense of such action or proceeding in accordance with this paragraph, the
indemnifying party shall not be liable for any fees and expenses of counsel for
the indemnified party incurred thereafter in connection with such action or
proceeding.

 

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2.4 Contribution.

(a) In order to provide for just and equitable contribution in circumstances in
which the indemnity agreement provided for in Sections 2.1 and 2.2 above is for
any reason held to be unenforceable by the indemnified party although applicable
in accordance with its terms, the Company and the relevant Investor shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by such indemnity agreement incurred by the Company and
the Investor, in such proportion as is appropriate to reflect the relative fault
of the Company on the one hand and the Investor on the other hand, in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities, or expenses. The relative fault of the indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, the indemnifying party or
the indemnified party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such action.

(b) The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section 2.4 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 2.4, an Investor shall not be
required to contribute any amount in excess of the amount of the total proceeds
to such Investor from sales of the Registrable Securities of such Investor under
the Registration Statement that is the subject of the indemnification claim.

(c) Notwithstanding the foregoing, no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 2.4, each person, if
any, who controls an Investor within the meaning of Section 15 of the Securities
Act shall have the same rights to contribution as the Investor, and each
director of the Company, each officer of the Company who signed a Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act shall have the same rights to contribution
as the Company.

SECTION 3. EXPENSES

The Company shall pay all expenses incident to the performance by the Company of
its registration obligations under Section 1 above, including (i) SEC, stock
exchange and FINRA registration and filing fees, (ii) all fees and expenses
incurred in complying with securities or “blue sky” laws (including reasonable
fees, charges and disbursements of counsel to any underwriter incurred in
connection with “blue sky” qualifications of the Registrable Securities as may
be set forth in any underwriting agreement), (iii) all printing, messenger and
delivery expenses, and (iv) the fees, charges and expenses of counsel to the
Company and of its independent public accountants and any other accounting fees,
charges and expenses incurred by the Company (including, without limitation, any
expenses arising from any “comfort” letters or any special audits incident to or
required by any registration or qualification). Each Investor shall be
responsible for the payment of any brokerage and sales commissions, fees and

 

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disbursements of such Investor’s counsel, accountants and other advisors (except
as contemplated by the preceding sentence), and any transfer taxes relating to
the sale or disposition of the Registrable Securities by such Investor pursuant
to this Agreement.

SECTION 4. RULE 144 COMPLIANCE

The Company covenants that it will use its commercially reasonable efforts to
timely file the reports required to be filed by the Company under the Securities
Act and the Exchange Act so as to enable the Investors to sell the Registrable
Securities pursuant to Rule 144 under the Securities Act. In connection with any
sale, transfer or other disposition by an Investor of any Registrable Securities
pursuant to Rule 144 under the Securities Act, the Company shall cooperate with
the Investor to facilitate the timely preparation and delivery of certificates
representing the Registrable Securities to be sold and not bearing any
Securities Act legend, and enable certificates for such Registrable Securities
to be for such number of shares and registered in such names as such Investor
may reasonably request at least five (5) Business Days prior to any sale of
Registrable Securities hereunder.

SECTION 5. MISCELLANEOUS

5.1 Termination of the Company’s Obligations. The Company shall have no further
obligations pursuant to this Agreement at such time as no Registrable Securities
are outstanding or the date on which all of the Registrable Securities covered
by the Registration Statement may be sold without restriction or limitation
pursuant to Rule 144 and without the requirement to be in compliance with Rule
144(c)(1) (or any successor thereto) under the Securities Act; provided that the
Company’s obligations under Sections 2, 4 and this Section 5 shall remain in
full force and effect following such time.

5.2 Integration; Amendment. This Agreement and the Securities Purchase Agreement
constitute the entire agreement among the parties hereto with respect to the
matters set forth herein and supersede and render of no force and effect all
prior oral or written agreements, commitments and understandings among the
parties with respect to the matters set forth herein. Except as otherwise
expressly provided in this Agreement, no amendment, modification or discharge of
this Agreement shall be valid or binding unless set forth in writing and duly
executed by each of the parties hereto.

5.3 Waivers. No waiver by a party hereto shall be effective unless made in a
written instrument duly executed by the party against whom such waiver is sought
to be enforced, and only to the extent set forth in such instrument. Neither the
waiver by any of the parties hereto of a breach or a default under any of the
provisions of this Agreement, nor the failure of any of the parties, on one or
more occasions, to enforce any of the provisions of this Agreement or to
exercise any right or privilege hereunder shall thereafter be construed as a
waiver of any subsequent breach or default of a similar nature, or as a waiver
of any such provisions, rights or privileges hereunder.

5.4 Assignment; Successors and Assigns. This Agreement and the rights granted
hereunder may not be assigned by an Investor without the written consent of the
Company;

 

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provided, however, that, except to the extent otherwise prohibited in
Section 1.1, an Investor may assign its rights and obligations hereunder,
without such consent, in connection with a transfer of some or all of such
Investor’s Registrable Securities (i) to the extent permitted under the
Securities Purchase Agreement, as applicable, and (ii) provided such transferee
agrees in writing to be bound by all of the provisions hereof and the Investor
provides written notice to the Company within ten (10) days of the effectiveness
of such assignment. This Agreement shall inure to the benefit of and be binding
upon all of the parties hereto and their respective heirs, executors, personal
and legal representatives, successors and permitted assigns, including, without
limitation, any successor of the Company by merger, acquisition, reorganization,
recapitalization or otherwise.

5.5 Notices. All notices called for under this Agreement shall be in writing and
shall be deemed duly given (a) on the date of delivery if delivered personally,
(b) on the first Business Day following the date of dispatch if delivered by a
nationally recognized next-day courier service, (c) on the fifth Business Day
following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid, or (d) if sent by facsimile
transmission during business hours on a Business Day, when transmitted and
receipt is confirmed, or otherwise on the following Business Day. All notices
hereunder shall be delivered to the parties at the addresses set forth opposite
their signatures below, or to any other address or addressee as any party
entitled to receive notice under this Agreement shall designate, from time to
time, to others in the manner provided in this Section 5.5 for the service of
notices; provided, however, that notices of a change of address shall be
effective only upon receipt thereof.

5.6 Specific Performance. The parties hereto acknowledge that the obligations
undertaken by them hereunder are unique and that there would be no adequate
remedy at law if any party fails to perform any of its obligations hereunder,
and accordingly agree that each party, in addition to any other remedy to which
it may be entitled at law or in equity, shall be entitled to (i) compel specific
performance of the obligations, covenants and agreements of any other party
under this Agreement in accordance with the terms and conditions of this
Agreement and (ii) obtain preliminary injunctive relief to secure specific
performance and to prevent a breach or contemplated breach of this Agreement in
any court of the United States or any State thereof having jurisdiction.

5.7 Governing Law. This Agreement, the rights and obligations of the parties
hereto, and any claims or disputes relating thereto, shall be governed by and
construed in accordance with the laws of the State of New York (excluding the
conflict of law provisions thereof).

5.8 Headings. Section and subsection headings contained in this Agreement are
inserted for convenience of reference only, shall not be deemed to be a part of
this Agreement for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.

5.9 Pronouns. All pronouns and any variations thereof shall be deemed to refer
to the masculine, feminine, neuter, singular or plural, as the identity of the
person or entity may require.

 

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5.10 Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement. This Agreement may be executed by
facsimile signatures.

5.11 Severability. If fulfillment of any provision of this Agreement, at the
time such fulfillment shall be due, shall transcend the limit of validity
prescribed by law, then the obligation to be fulfilled shall be reduced to the
limit of such validity; and if any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.

5.12 No Third Party Beneficiaries. It is the explicit intention of the parties
hereto that no person or entity other than the parties hereto is or shall be
entitled to bring any action to enforce any provision of this Agreement against
any of the parties hereto, other than a person entitled to indemnity under
Section 2.1 and Section 2.2 of this Agreement, and the covenants, undertakings
and agreements set forth in this Agreement shall be solely for the benefit of,
and shall be enforceable only by, the parties hereto or their respective
successors, heirs, executors, administrators, legal representatives and
permitted assigns and, to the extent applicable, any person entitled to
indemnity under Section 2.1 and Section 2.2 of this Agreement.

[Signatures on following page]

 

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IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly
executed and delivered in its name and on its behalf as of the date first
written above.

 

Address:       THE COMPANY: 2450 Broadway, 6th Floor       COLONY FINANCIAL,
INC. Santa Monica, California               By:  

/s/ Ronald M. Sanders

      Name:   Ronald M. Sanders       Title:   Chief Legal Officer      
INVESTORS: Address:       LUXOR CAPITAL PARTNERS, LP 1114 Avenue of the
Americas, 29th Floor       By:  

/s/ Norris Nissim

New York, NY 10036       Name:   Norris Nissim       Title:   General Counsel   
     Luxor Capital Group, LP, Investment Manager Mailing Address:       LUXOR
CAPITAL PARTNERS OFFSHORE       MASTER FUND, LP

1114 Avenue of the Americas, 29th Floor

New York, NY 10036

              By:  

/s/ Norris Nissim

      Name:   Norris Nissim Registered Address:       Title:  

General Counsel

Luxor Capital Group, LP, Investment Manager

c/o M&C Corporate Services Ltd.

Ugland House, Grand Cayman, KY-1104

Cayman Islands

        Address:       LUXOR WAVEFRONT, LP

1114 Avenue of the Americas, 29th Floor

New York, NY 10036

      By:  

/s/ Norris Nissim

      Name:   Norris Nissim       Title:   General Counsel         Luxor Capital
Group, LP, Investment Manager Address:       GAM EQUITY SIX INC.

1114 Avenue of the Americas, 29th Floor

New York, NY 10036

      By:  

/s/ Norris Nissim

      Name:   Norris Nissim       Title:   General Counsel Registered Address:
        Luxor Capital Group, LP, Investment Manager

Craigmuir Chamber, P.O. Box 71, Road

Town, Tortola, British Virgin Islands

     

(Signature Page to Registration Rights Agreement)

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Address:       CEDAR BRIDGE INSTITUTIONAL FUND, L.P.

C/o High Rise Capital Management, L.P.

535 Madison Avenue, 27th Floor

New York, NY 10022

              By:  

/s/ Alissa Fox

      Name:   Alissa Fox       Title:   Chief Financial Officer Address:      
CEDAR BRIDGE REALTY FUND, L.P.

C/o High Rise Capital Management, L.P.

535 Madison Avenue, 27th Floor

New York, NY 10022

              By:  

/s/ Alissa Fox

      Name:   Alissa Fox       Title:   Chief Financial Officer

(Signature Page to Registration Rights Agreement)