Exhibit
10.38  THIS COMMON STOCK PURCHASE
WARRANT AND THE SHARES THAT MAY BE PURCHASED HEREUNDER HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES LAWS OF ANY
STATE.  THIS COMMON STOCK PURCHASE
WARRANT AND THE SHARES THAT MAY BE PURCHASED HEREUNDER HAVE BEEN ACQUIRED
FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO DISTRIBUTION, AND THIS COMMON
STOCK PURCHASE WARRANT AND THE SHARES THAT MAY BE PURCHASED HEREUNDER MAY NOT
BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AND REGISTRATION OR QUALIFICATION
UNDER APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL THAT THE
PROPOSED TRANSACTION DOES NOT REQUIRE REGISTRATION OR QUALIFICATION UNDER, OR
OTHERWISE VIOLATE THE SECURITIES ACT OF 1933, AND APPLICABLE STATE SECURITIES
LAWS.  NORTHSTAR REALTY FINANCE CORP.  COMMON STOCK PURCHASE WARRANT  Date of Issuance: October 28, 2009
  Certificate No. W-3  THIS IS TO CERTIFYthat WACHOVIA BANK, NATIONAL
ASSOCIATION, a national banking association (together with its permitted
transferees, successors and assigns, the Holder), for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, is entitled to purchase from NORTHSTAR REALTY FINANCE CORP.,a Maryland corporation (the Company), at the price of $10.75
per share (the Exercise Price),
at any time after October 28, 2011 (the Commencement Date) and expiring on October 28, 2021
(the Expiration Date), 250,000 shares
of fully paid and non-assessablecommon stock, par value $0.01 per share (Common Stock), of the Company (as
such number may be adjusted as provided herein).  The 250,000 shares of Common Stock which may be
purchased pursuant to this Warrant are referred to herein as the Aggregate
Number.  This common stock purchase
warrant (this Warrant) is issued under and in connection with that
certain First Amended and Restated Credit Agreement, dated as of October 28,
2009 (as the same may be amended, modified, restated, replaced, waived,
substituted, supplemented or extended from time to time, the Credit Agreement), among NRFC WA
HOLDINGS, LLC, a Delaware limited liability company, as a borrower, NRFC WA
HOLDINGS II, LLC, a Delaware limited liability company, as a borrower, NRFC WA
HOLDINGS VII, LLC, a Delaware limited liability company, as a borrower, NRFC WA
HOLDINGS X, LLC, a Delaware limited liability company, as a borrower, NRFC WA
HOLDINGS XII, LLC, a Delaware limited liability company, as a borrower,  the Company, as a guarantor, NORTHSTAR REALTY
FINANCE L.P., a Delaware limited partnership, as a guarantor, and the other
entities from time to time party thereto, the several banks and other financial
institutions as are, or may from time to time become parties thereto, and
Wachovia Bank, National Association, a national banking association, as
administrative agent for the lenders thereunder.


The Aggregate Number and Exercise Price set
forth above shall also be adjusted under certain conditions specified in Section 5 of this Warrant, including, but
not limited to, a Stock Dividend, Stock Subdivision or Stock Combination.  Capitalized terms used herein shall have the
meanings ascribed to such terms in Section 11 hereof unless otherwise defined herein.  SECTION 1.The Warrant; Transfer and Exchange.  (a)The
Warrant.  This Warrant and the rights
and privileges of the Holder hereunder may be exercised by the Holder in whole
or in part as provided herein, shall survive any termination of the Credit
Agreement and, as more fully set forth in Sections 1(b) and
7 hereof, subject to the terms of this Warrant, may be transferred by
the Holder to any other Person or Persons who meet the requirements set forth
herein at any time or from time to time, in whole or in part, regardless of
whether the Holder retains any or all rights under the Credit Agreement.  (b)Transfer
and Exchanges.  The Company
shall initially record this Warrant on a register to be maintained by the
Company and, subject to Section 7
hereof, from time to time thereafter shall reflect the transfer of this Warrant
on such register when surrendered for transfer in accordance with the terms
hereof and properly endorsed, accompanied by appropriate instructions, and
further accompanied by payment in cash or by check, bank draft or money order
payable to the order of the Company, in United States currency, of an amount
equal to any stamp or other tax or governmental charge or fee required to be
paid in connection with the transfer thereof. 
Upon any such transfer, a new warrant or warrants shall be issued to the
transferee and the Holder (in the event this Warrant is only partially
transferred) and the surrendered warrant shall be canceled.  This Warrant may be exchanged at the option
of the Holder, when surrendered at the Principal Office of the Company, for
another warrant or other warrants of like tenor and representing in the
aggregate the right to purchase a like number of shares ofCommon Stock upon
surrender of the warrant and payment in cash or by check, bank draft or money
order payable to the order of the Company, in United States currency, of an
amount equal to any stamp or other tax or governmental charge or fee required
to be paid in connection with such exchange.  SECTION 2.Exercise.  (a)Right
to Exercise.  At any time
after the Commencement Date and on or before the Expiration Date, the Holder,
in accordance with the terms hereof, may exercise this Warrant, in whole at any
time or in part from time to time, by delivering this Warrant to the Company
during normal business hours on any Business Day at the Companys Principal
Office, together with the Notice of Exercise, in the form attached hereto as Exhibit A and made a part
hereof (the Notice of Exercise),
duly executed, and payment of the Exercise Price per share for each share
purchased, as specified in the Notice of Exercise.  The aggregate Exercise Price (the Aggregate Exercise Price) to be
paid for the shares to be purchased (the Exercise Amount) shall equal the product of (i) the
Exercise Amount multiplied by (ii) the Exercise Price.  If the Expiration Date is not a Business Day,
then this Warrant may be exercised on the next succeeding Business Day.  (b)Payment
of the Aggregate Exercise Price.  Payment of the Aggregate Exercise Price shall
be made to the Company in cash or other immediately available funds or as
provided in Section 2(c),
or a combination thereof.  In the case of
payment of all or a portion of the Aggregate Exercise Price pursuant to Section 2(c), the direction by the Holder to
make a Cashless Exercise shall serve as accompanying payment for that portion
of the Exercise Price.  (c)Cashless
Exercise.  The Holder
shall have the right to pay all or a portion of the Aggregate Exercise Price by
making a Cashless Exercise, in which case the portion of the Aggregate
Exercise Price to be so paid shall be paid by reducing the number of shares of
Common Stock otherwise


issuable pursuant to the Notice of Exercise by an amount equal to (i) the
Aggregate Exercise Price to be so paid divided by (ii) the Fair Market
Value Per Share.  (d)Issuance
of Shares of Common Stock.  Upon
receipt by the Company of this Warrant at its Principal Office in proper form
for exercise, and accompanied by the Notice of Exercise and payment of the
Aggregate Exercise Price as aforesaid, the Holder shall be deemed to be the
holder of record of the shares of Common Stock issuable upon such exercise,
notwithstanding that certificates representing such shares of Common Stock may
not then be actually delivered.  Within
three (3) Business Days after such surrender of this Warrant, delivery of
the Notice of Exercise and payment of the Aggregate Exercise Price as
aforesaid, the Company shall issue and cause to be delivered to, or upon the
written order of, the Holder (and in such name or names as the Holder may
designate) a certificate or certificates for the Exercise Amount, subject to
any reduction as provided in Section 2(c) for a
Cashless Exercise.  (e)Fractional
Shares.  The Company may, but shall not
be required to, deliver fractions of shares of Common Stock upon exercise of
this Warrant.  If any fraction of a share
of Common Stock would be deliverable upon an exercise of this Warrant, the
Company may, in lieu of delivering such fraction of a share of Common Stock,
make a cash payment to the Holder in an amount equal to the same fraction of
the Fair Market Value Per Share determined as of the Business Day immediately
preceding the date of exercise of this Warrant.  (f)Partial
Exercise.  In the
event of a partial exercise of this Warrant, the Company shall issue to the
Holder a Warrant in like form for the unexercised portion thereof which has not
expired.  (g)No Rights as Stockholders.  Except as provided herein, the Holder shall
have no right as a holder of Common Stock of the Company solely as a result of
being the registered or beneficial owner of this Warrant.  The Holder shall have no right to vote,
consent or otherwise participate with respect to matters submitted to a vote of
the stockholders of the Company solely as a result of being the registered or
beneficial owner of this Warrant.  SECTION 3.Payment of Taxes.The Company shall pay all stamp taxes
attributable to the initial issuance of shares of Common Stock issuable upon
the exercise of this Warrant or issuable pursuant to Section 5 hereof, excluding any tax or taxes
which may be payable because of the transfer involved in the issuance or
delivery of any certificates for shares of Common Stock in a name other than
that of the registered Holder of this Warrant surrendered upon the exercise of
this Warrant, and the Company shall not be required to issue or deliver such
certificates unless and until the Person or Persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid or
is not due and owing.  SECTION 4.Replacement Warrant.In case this Warrant is mutilated, lost,
stolen or destroyed, the Company shall issue and deliver in exchange and
substitution for and upon surrender and cancellation of the mutilated Warrant,
or in lieu of and in substitution for this Warrant lost, stolen or destroyed, a
new Warrant of like tenor and representing an equivalent right or interest, but
only upon receipt of evidence reasonably satisfactory to the Company of such
loss, theft or destruction of such Warrant and upon receipt of indemnity by the
Holder reasonably satisfactory to the Company and the Holder; provided, that if the Holder is a financial institution, its own
indemnity agreement shall be satisfactory and no third party indemnity shall be
required.  SECTION 5.Adjustments to the Aggregate Number and the
Exercise Price.  Under certain conditions, the Aggregate
Number and the Exercise Price are subject to adjustment as set forth in this Section 5.


(a)Adjustments.  The Aggregate Number, after taking into
consideration any prior adjustments pursuant to this Section 5, shall be subject to adjustment
from time to time as follows and, thereafter, as adjusted, shall be deemed to
be the Aggregate Number hereunder.  (i)Stock Dividends; Subdivisions and Combinations.  In case at any time or from time to time the
Company shall:  (A)issue to the
holders of its shares of Common Stock a dividend payable in, or other
distribution of, shares of Common Stock (a Stock Dividend);  (B)subdivide its
outstanding shares of Common Stock into a larger number of shares of Common
Stock, including, without limitation, by means of a stock split (a Stock Subdivision); or  (C)combine its
outstanding shares of Common Stock into a smaller number of shares of Common
Stock (a Stock Combination);  then the Aggregate Number in effect immediately prior thereto shall be (1) proportionately
increased in the case of a Stock Dividend or a Stock Subdivision and (2) proportionately
decreased in the case of a Stock Combination, and the Exercise Price shall be
proportionately adjusted.  In the event
the Company shall declare or pay, without consideration, any dividend on the
shares of Common Stock payable in any right to acquire shares of Common Stock
for no consideration, then the Company shall be deemed to have made a Stock
Dividend in an amount of shares equal to the maximum number of shares issuable
upon exercise of such rights to acquire shares of Common Stock.  (b)Notices.  (i)Notice of Proposed Actions.  In case the Company shall propose (A) to
offer to the holders of its Common Stock rights to subscribe for or to purchase
any Convertible Securities, rights to acquire Convertible Securities or capital
stock or additional shares of Common Stock or shares of stock of any class or
any other securities, warrants, rights or options, (B) to effect any
reclassification of its Common Stock, (C) to effect any recapitalization,
stock subdivision, stock combination or other capital reorganization, (D) to
effect any consolidation or merger, share exchange, or sale, lease or other
disposition of all or substantially all of its property, assets or business, (E) to
effect the liquidation, dissolution or winding up of the Company, (F) to
initiate any transaction or be a party to any transaction (including, without
limitation, a merger, consolidation, share exchange, sale, lease or other
disposition of all or substantially all of the Companys assets, liquidation,
recapitalization or reclassification of the Common Stock) in connection with
which the previous Outstanding Common Stock shall be changed into or exchanged
for different securities of the Company or capital stock or other securities of
another corporation or interests in a non-corporate entity or other property
(including cash) or any combination of the foregoing or (G) to effect any
action which would require an adjustment under this Section 5, then in each such case the
Company shall give to the Holder written notice of such proposed action, which
shall specify the proposed date on which a record is to be taken for the
purposes of such stock dividend, distribution or rights, or the proposed date
on which such reclassification, reorganization, consolidation, merger, share
exchange, sale, transfer, disposition, liquidation, dissolution, winding up or
other transaction is to take place and the date of participation therein by the
holders of Common Stock, if any such date is to be fixed, or the proposed date
on which the transfer of Common Stock is to occur, and shall also set forth
such facts with respect thereto as shall be reasonably necessary to indicate
the effect, if any, of such


action on the Common Stock and on the
Aggregate Number after giving effect to any adjustment which will be required
as a result of such action.  Such notice
shall be so given in the case of any action covered by clause (A) above at
least twenty (20) calendar days prior to the record date for determining holders
of the Common Stock for purposes of such action and, in the case of any other
such action, at least twenty (20) calendar days prior to the earlier of the
date of the taking of such proposed action or the date of participation therein
by the holders of Common Stock.  (ii)Adjustment Notice. 
Whenever the Aggregate Number is to be adjusted pursuant to this Section 5, unless otherwise agreed by the
Holder, the Company shall promptly (and in any event within ten (10) Business
Days after the event requiring the adjustment) prepare and deliver to the
Holder a certificate signed by the chief financial officer or chief accounting
officer of the Company, setting forth, in reasonable detail, the event
requiring the adjustment and the method by which such adjustment is to be
calculated.  The certificate shall set
forth, the new Aggregate Number.  (c)When Adjustment Not Required.  If the Company shall take a record of the
holders of its Common Stock for any purpose requiring an adjustment pursuant to
Section 5(a) hereunder, but shall, thereafter and before the
consummation of the event requiring such adjustment legally abandon its plan,
then thereafter no adjustment shall be required by reason of the taking of such
record and any such adjustment previously made in respect thereof shall be
rescinded and annulled.  (d)Certain Limitations.  Notwithstanding anything herein to the
contrary, no adjustment to the Exercise Price hereunder shall be made, to the
extent it would cause the Exercise Price to be less than the par value of the
Common Stock, if any.  (e)Tax Adjustments.  The Company may make such reductions in the
Exercise Price or increase the Aggregate Number, in addition to those
adjustments required by Section 5(a) hereof, as it in its sole
discretion shall determine to be advisable in order that any adjustment
hereunder shall not be taxable to such holders; provided, however, any
adjustments which could have an adverse effect on the Holder shall require the
consent of the Holder.  SECTION 6.No Dilution or Impairment.The Company will not, by amendment of its
Articles of Incorporation or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, share exchange, dissolution or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant, including, without limitation, the
adjustments required under Section 5
hereof, and will at all times in good faith assist in the carrying out of all
such terms and in taking of all such action as may be reasonably necessary or
appropriate to protect the rights of the Holder against dilution or other
impairment.  Without limiting the
generality of the foregoing and notwithstanding any other provision of this
Warrant to the contrary (including by way of implication), the Company (a) will
not increase the par value of any shares of Common Stock receivable on the
exercise of this Warrant above the amount payable therefor on such exercise and
(b) will take all such action as may be necessary or appropriate so that
the Company may validly and legally issue fully paid and non-assessable shares
of Common Stock upon the exercise of this Warrant.  SECTION 7.Transfers of this Warrant.  (a)Generally.  Subject to the restrictions set forth in this
Section 7, the Holder
may at any time and from time to time freely transfer this Warrant and the
Warrant Shares in whole or in part to any Person.  This Warrant has not been, and the Warrant
Shares at the time of their issuance may not be, registered under the Securities
Act and, nothing herein contained shall be deemed to require the Company to so
register this Warrant or the Warrant Shares. 
This Warrant and the Warrant Shares are issued or


issuable subject to the provisions and conditions contained herein and
every Holder hereof by accepting the same agrees with the Company to such
provisions and conditions, and represents to the Company that this Warrant has
been acquired and the Warrant Shares will be acquired for the account of the
Holder for investment purposes and not with a view to or for sale in connection
with any distribution thereof.  (b)Compliance
with Securities Laws.  The Holder
agrees that this Warrant and the Warrant Shares may not be sold or otherwise
disposed of except pursuant to an effective registration statement under the
Securities Act and other applicable Securities Laws or pursuant to an available
exemption from the registration requirements of the Securities Act and such
other applicable Securities Laws.  The
Holder of this Warrant by its acceptance hereof, acknowledges that the Company
has no obligation or current intention to register the transfer of any Warrants
or Common Stock issuable upon the exercise thereof under Section 5
of the Securities Act.  In the event that
the Holder transfers this Warrant or the Warrant Shares pursuant to an
applicable exemption from registration, the Company may request, at its
expense, that the Holder deliver an opinion of counsel reasonably acceptable to
the Company that the proposed transfer does not violate the Securities Act or
other applicable Securities Laws.  (c)Restrictive
Securities Legend.  (i) 
The certificate representing the Warrant Shares shall bear the restrictive
legends set forth below:  THE SHARES OF COMMON STOCK REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE.  NO TRANSFER, SALE OR OTHER DISPOSITION OF THE
SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE MAY BE MADE UNLESS (1) A
REGISTRATION STATEMENT WITH RESPECT TO THE SHARES OF COMMON STOCK REPRESENTED
BY THIS CERTIFICATE HAS BECOME EFFECTIVE UNDER SAID ACT, AND SUCH REGISTRATION
OR QUALIFICATION AS MAY BE NECESSARY UNDER THE SECURITIES LAWS OF ANY
STATE HAS BECOME EFFECTIVE, OR (II) PURSUANT TO AN AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED
AND UNDER THE SECURITIES LAWS OF ANY STATE, SUBJECT TO THE COMPANYS RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (II) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY TO
THE EFFECT THAT SUCH TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT OF 1933, AS AMENDED, AND THE SECURITIES LAWS OF ANY STATE.  (ii)Certificates evidencing
the Warrant Shares shall not contain any legend: (1) if the Warrant Shares
are sold pursuant to an effective registration statement covering the resale of
the Warrant Shares under the Securities Act, or (2) following any sale of
the Warrant Shares pursuant to Rule 144 (other than sales to an Affiliate
of Holder), or (3) if all of such Warrant Shares are then eligible for
sale under Rule 144(b)(l)(i) and Rule 144(d)(l), or (4) if
such legend is not required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by the staff of
the Commission).  If the Company shall
have received from the Holder an opinion of counsel satisfactory to the Company
to the effect that a legend is not otherwise required under applicable
requirements of the Securities Act (including judicial interpretations thereof)
in order to ensure compliance with the Securities Act pursuant to clauses (2), (3) or
(4) above, then any certificates representing the Warrant Shares shall be
issued free of all legends.  The Company
agrees that at such time as such legend is no longer required under this Section 7(ii) following
receipt by the Company from the Holder of the opinion of counsel


referred to in the prior sentence, it will,
no later than three (3) Business Days following the delivery by the Holder
to the Companys transfer agent of a certificate representing the Warrant
Shares issued with a restrictive legend, deliver or cause to be delivered to
the Holder a certificate representing such Warrant Shares that is free from all
restrictive and other legends.  Unless
required by law, the Company may not make any notation on its records or give
instructions to any transfer agent of the Company that enlarge the restrictions
on transfer set forth in this Section 7.  SECTION 8.Covenants.  The Company hereby covenants to the Holder
that so long as Holder holds any Warrant Securities:  (a)Limitation
on Certain Restrictions. 
Without the prior written consent of the Required Holders, the Company
will not, directly or indirectly, to create or otherwise cause or suffer to
exist or become effective any restriction or encumbrance on the ability of the
Company to perform and comply with its obligations under this Warrant.  (b)Regulatory
Requirements and Restrictions.  In the event of any reasonable determination
by the Holder that, by reason of any existing or future federal or state law,
statute, rule, regulation, guideline, order, court or administrative ruling,
request or directive (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful) (collectively, a Regulatory Requirement), the Holder
is effectively restricted or prohibited from holding this Warrant or the
Warrant Shares (including any shares of capital stock or other securities
distributable to the Holder in any merger, reorganization, readjustment or
other reclassification), or otherwise realizing upon or receiving the benefits
intended under this Warrant, the Company shall use its commercially reasonable
efforts to take such action as the Holder and the Company shall jointly agree
in good faith to be necessary to permit the Holder to comply with such
Regulatory Requirement.  The reasonable
costs of taking such action, whether by the Company, the Holder or otherwise,
shall be borne by the Holder.  (c)Reservation
of Shares.  The Company
shall at all times reserve and keep available out of  the aggregate of its authorized but unissued
shares, free of preemptive rights, such number of its duly authorized shares of
Common Stock as shall be sufficient to enable the Company to issue Common Stock
upon exercise of this Warrant.  (d)Affirmative
Actions to Permit Exercise and Realization of Benefits.  If any Warrant Shares reserved or to be reserved
for the purpose of the exercise of this Warrant require registration with or
approval of any Governmental Authority under any federal or state law (other
than securities laws) before such shares or other securities may be validly
delivered upon exercise of this Warrant, then the Company covenants that it
will, at its sole expense, secure such registration or approval, as the case
may be (including but not limited to approvals or expirations of waiting
periods required under the Hart-Scott-Rodino Antitrust Improvements Act).  (e)Validly
Issued Shares.  All shares
of Common Stock that may be issued upon exercise of this Warrant, assuming full
payment of the Aggregate Exercise Price (including those issued pursuant to Section 5 hereof) shall, upon delivery by
the Company, be duly authorized and validly issued, fully paid and
non-assessable, free from all stamp taxes, liens and charges with respect to
the issue or delivery thereof and otherwise free of all other security
interests, encumbrances and claims of any nature whatsoever (other than
security interests, encumbrances and claims created by actions of the Holder or
to which the Holder is subject prior to the issuance of this Warrant and other
transfer restrictions described herein).


(f)Furnishing of Information;
Compliance with Rule 144.  The Company shall timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof pursuant to
the Exchange Act.  So long as the Warrant
Shares are not registered under an effective registration statement, upon the
request of the Holder, the Company shall deliver to the Holder a written
certification of a duly authorized officer as to whether it has complied with
the preceding sentence.  As long as the
Holder owns any of the Warrant Shares, if the Company is not required to file
reports pursuant to such laws, it will prepare and furnish to the Holder and
make publicly available in accordance with Rule 144 such information as is
required for the Holder to sell the Warrant Shares under Rule 144.  So long as the Warrant Shares are not
registered under an effective registration statement, the Company further
covenants that it will take such further action as the Holder may reasonably
request, all to the extent required from time to time to enable the Holder to
sell such Warrant Shares without registration under the Securities Act within
the limitation of the exemptions provided by Rule 144.  (g)Integration.  The Company shall not, and shall use its
commercially reasonable efforts to ensure that no Affiliate of the Company
shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of this Warrant in a
manner that would require the registration under the Securities Act of the sale
of the Warrant to the Holder.  (h)Listing of the Warrant
Shares.  The Company shall: (i) take
all commercially reasonable steps necessary to cause the Warrant Shares to be
approved for listing on the Principal Market as soon as possible after such
time as the Warrant Shares are no longer required to contain the legend
provided in Section 7, (ii) provide to the Holder evidence of
such listing, and (iii) use commercially reasonable efforts to maintain
the listing of the Warrant Shares on such Principal Market or another Principal
Market.  (i)Costs and Expenses.  The Company agrees to pay upon demand
(including, without limitation, reasonable attorneys fees and expenses) (a) all
reasonable out-of-pocket costs and expenses of the Holder in connection with
the preparation, negotiation, execution and delivery of, this Warrant and any
amendment, modification or waiver hereof or consent with respect hereto, and (b) all
reasonable out of pocket costs and expenses of the Holder in connection with
the delivery of any and all opinions required by Section 7 hereof.  SECTION 9.  No
Effect Upon Lending Relationship.Notwithstanding anything herein to the contrary, nothing contained in
this Warrant shall affect, limit or impair the rights and remedies of the
Holder or any of its Affiliates in its capacity as a lender to the Company
pursuant to any agreement under which the Company has borrowed money from the
Holder.  Without limiting the generality
of the foregoing, the Holder, in exercising its rights as a lender, including
making its decision on whether to foreclose on any collateral security, will
have no duty to consider (i) its status or the status of any of its
Affiliates as a direct or indirect equity holder of the Company, (ii) the
equity of the Company or (iii) any duty it may have to any other direct or
indirect equity holder of the Company, except as may be required under the
applicable loan documents or by commercial law applicable to creditors
generally.  SECTION 10.  Events of Non-Compliance and Remedies.  (a)Events
of Non-Compliance.  If the
Company fails to keep and fully and promptly perform and observe in all
material respects any of the terms, covenants or representations contained or
referenced herein within twenty (20) calendar days from the earlier to occur of
(i) written notice from the Holder specifying what failure has occurred,
or requesting that a specified failure be remedied or (ii) the


Company becoming aware of such failure (an Event of Non-Compliance), the Holder shall be entitled to
the remedies set forth in subsection (b) hereof.  (b)Remedies.  On the occurrence of an Event of Non-Compliance,
in addition to any remedies the Holder may have under any Requirement of Law,
the Holder may bring any action for injunctive relief or specific performance
of any term or covenant contained herein, the Company hereby acknowledging that
an action for money damages may not be adequate to protect the interests of the
Holder hereunder.  SECTION 11.  Definitions.  As used herein, in addition to the terms
defined elsewhere herein, the following terms shall have the following
meanings.  Capitalized terms not appearing
below and not otherwise defined herein shall have the meaning ascribed to them
in the Credit Agreement.  Affiliate
has the meaning set forth in the Credit Agreement.  Aggregate
Exercise Price has the meaning set forth in Section 2(a).  Aggregate
Number has the meaning set forth in the Preamble.  Articles of Incorporation means
the Articles of Incorporation of the Company, as the same may be amended or
supplemented from time to time.  Business
Day has the meaning set forth in the Credit Agreement.  Commencement
Date has the meaning set forth in the Preamble.  Commission
means the Securities and Exchange Commission or any similar agency then having
jurisdiction to enforce the Securities Act or the Exchange Act.  Common
Stock includes the Common Stock of the Company, par value $0.01 per
share, as described in the Articles of Incorporation.  Company
has the meaning set forth in the Preamble.  Convertible
Securities means evidences of indebtedness, shares of stock or
other securities (including, but not limited to options and warrants) which are
directly or indirectly convertible, exercisable or exchangeable, with or
without payment of additional consideration in cash or property, for shares of
Common Stock, either immediately or upon the onset of a specified date or the
happening of a specified event.  Credit Agreement has the meaning set
forth in the Preamble.  Event
of Non-Compliance has the meaning set forth in Section 10(a).  Exchange
Act has the meaning set forth in the Credit Agreement.  Exercise
Amount has the meaning set forth in Section 2(a).  Exercise
Price has the meaning set forth in the Preamble.


Expiration
Date has the meaning set forth in the Preamble.  Fair
Market Value Per Share means the value, on a particular date, of a
share of Common Stock determined as follows:  (i)            If the Common
Stock is listed or admitted to trading on such date on the Principal Market,
the average of the last bid and ask prices on such date as those prices are
reported on the New York Stock Exchange or other such national securities
exchange or automated dealer quotation system, or if the Common Stock is not
listed or authorized for trading on the New York Stock Exchange or any
comparable system, the average of the closing bid and asked prices on such date
as furnished by two members of the Financial Industry Regulatory Authority, Inc.
selected from time to time by the Company for that purpose; or  (ii)           If the Common
Stock is not publicly traded, (a) the fair market value of the Outstanding
Common Stock based upon an arms length sale of the Company on such date
(including its ownership interest in all Persons) as an entirety, such sale
being between a willing buyer and a willing seller and determined without
reference to any discount for minority interest, restrictions on transfer,
disparate voting rights among classes of capital stock or lack of marketability
with respect to capital stock divided by (b) the aggregate number of
shares of Outstanding Common Stock.  The
Fair Market Value Per Share shall be determined pursuant to this clause (ii) by
the disinterested members of the Board of Directors of the Company in good
faith within ten (10) Business Days of any event for which such
determination is required and such determination (including the basis therefor)
shall be promptly provided to the Holder. 
Such determination shall be binding on the Holder unless the Holder
objects thereto in writing within ten (10) Business Days of receipt.  In the event the Holder objects to the
determination of Fair Market Value Per Share by the board of directors of the
Company (such objection to be made within ten (10) Business Days of the
Holders receipt of written notice of such determination), then the Fair Market
Value Per Share shall be determined by a disinterested appraiser (which may be
a national or regional investment bank or national accounting firm) mutually
selected by the Company and the Holder, the fees and expenses of which shall be
paid by the Company.  Any selection of a
disinterested appraiser shall be made in good faith within five (5) Business
Days after the Holder provides written notice to the Company of its objection
to the determination of Fair Market Value Per Share and any determination of
Fair Market Value Per Share by a disinterested appraiser shall be made within
ten (10) Business Days of the date of selection.  Governmental
Authority has the meaning set forth in the Credit Agreement.  Holder
has the meaning set forth in the Preamble.  Lenders
has the meaning set forth in the Credit Agreement.  Notice
of Exercise has the meaning set forth in Section 2(a).  Outstanding
Common Stock of the Company means, as of the date of determination,
the sum (without duplication) of the following: (a) the number of shares
of Common Stock then outstanding at the date of determination, (b) the
number of shares of Common Stock then issuable upon the exercise of this Warrant
(as such number of shares may be adjusted pursuant to the terms hereof) and (c) the
number of shares of Common Stock then issuable upon the exercise or conversion
of Convertible Securities and any warrants, options or other rights to
subscribe for or purchase Common Stock or Convertible Securities


(but excluding any unvested options and securities not then exercisable
for or convertible into Common Stock).  Person
has the meaning set forth in the Credit Agreement.  Principal Market initially means the
New York Stock Exchange, Inc. and any successor exchange thereto and shall
also include the NASDAQ Global Select Market, the NASDAQ Global Market, NASDAQ
Capital Market, the American Stock Exchange or the OTC Bulletin Board,
whichever is at the time the principal trading exchange or market for the
Common Stock, based upon share volume.  Principal
Office means the Companys principal office as set forth in Section 16 hereof or such other principal
office of the Company in the United States of America the address of which
first shall have been set forth in a notice to the Holder.  Regulatory
Requirement has the meaning set forth in Section 8(b).  Required Holders means the holders
of at least 51.0% of the Warrant Shares then outstanding.  Requirement
of Law has the meaning set forth in the Credit Agreement.  Securities
Act has the meaning set forth in the Credit Agreement.  Securities
Laws has the meaning set forth in the Credit Agreement.  Stock
Combination has the meaning set forth in Section 5(a)(i)(C).  Stock
Dividend has the meaning set forth in Section 5(a)(i)(A).  Stock
Subdivision has the meaning set forth in Section 5(a)(i)(B).  Subsidiary
has the meaning set forth in the Credit Agreement.  Warrant
has the meaning set forth in the Preamble.  Warrant
Securities means this Warrant and the Warrant Shares, collectively.  Warrant
Shares means the shares of Common Stock issued or issuable upon
exercise of this Warrant in accordance with its terms.  SECTION 12.  Survival
of Provisions.Notwithstanding the full exercise by the Holder of its rights to
purchase Common Stock hereunder, the provisions of Sections 8(f) and
(g) of this Warrant shall survive such exercise and the Expiration
Date until such time as the Holder no longer holds any Warrant Shares.  SECTION 13.  Delays, Omissions and Indulgences.It is agreed that no delay or omission to
exercise any right, power or remedy accruing to the Holder upon any breach or
default of the Company under this Warrant shall impair any such right, power or
remedy, nor shall it be construed to be a waiver of any such breach or default,
or any acquiescence therein, or of or in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring.  It is further agreed that any
waiver, permit, consent or approval of any kind or character on the Holders
part of any breach or default under this Warrant, or


any waiver on the Holders part of any provisions or conditions of this
Warrant must be in writing and that all remedies, either under this Warrant, or
by Requirement of Law or otherwise afforded to the Holder, shall be cumulative
and not alternative.  SECTION 14.  Rights of Transferees.  Subject to Section 7,the rights granted to the Holder hereunder
of this Warrant shall pass to and inure to the benefit of all subsequent
transferees of all or any portion of this Warrant (provided that the Holder and
any transferee shall hold such rights in proportion to their respective
ownership of this Warrant and Warrant Shares) until extinguished pursuant to
the terms hereof.  SECTION 15.  Section Headings.The titles and captions of the Sections and
other provisions of this Warrant are for convenience of reference only and are
not to be considered in construing this Warrant.  SECTION 16.  Notices.  (a)Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in paragraph (b) below), all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopier as follows:  if to the Company:c/o NorthStar Realty
  Finance Corp.399 Park Avenue, 18th
  floorNew York, New York 10022Attention:
  Andy RichardsonAl Tylis, Esq.Daniel R. GilbertFacsimile No.:
  (212) 5472700Telephone Nos.:
  (212) 5472650(212) 5472641(212) 5472680Emails:
  richardson@nrfc.comtylis@nrfc.comgilbert@nrfc.comwith a copy to:Paul Hastings
  Janofsky & Walker LLP75 East 55th StreetNew York, New York 10022Attention:
  Robert J. Grados, Esq.Facsimile No.:
  (212) 2307830Telephone No.:
  (212) 3186923Email:
  RobertGrados@paulhastings.com


if to the Holder:Wachovia Bank, National
  AssociationOne Wachovia Center,
  NC0166301 South College StreetCharlotte, North Carolina
  28202Attention:
  Lee GoinsFacsimile No.:
  (704) 715-0666Telephone No.:
  (704) 715-7655Email:
  lee.goins@wachovia.comwith a copy to:Moore & Van Allen
  PLLC100 North Tryon StreetSuite 4700Charlotte, North Carolina
  28202Attention:
  Kenneth P. Kerr, Esq.Facsimile No.:
  (704) 3782097Telephone No.:
  (704) 3311145Email:
  kenkerr@mvalaw.com  Notices sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have
been given when received; notices sent by telecopier shall be deemed to have
been given when sent (except that, if not given during normal business hours
for the recipient, shall be deemed to have been given at the opening of
business on the next Business Day for the recipient).  Notices delivered through electronic
communications to the extent provided in paragraph (b) below shall be
effective as provided in said paragraph (b).  (b)           Notices and other communications to
the Holder hereunder may be delivered or furnished by electronic communication
(including facsimile, e-mail and internet or intranet websites) pursuant to
procedures approved by the Holder.  The
Holder or the Company may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to procedures
approved by it, provided
that approval of such procedures may be limited to particular notices or
communications.  Unless the Holder otherwise prescribes, (i) notices
and other communications sent to an e-mail address shall be deemed received
upon the senders receipt of an acknowledgement from the intended recipient
(such as by the return receipt requested function, as available, return
e-mail or other written acknowledgement), provided that if such notice or other communication is not
sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient, and (ii) notices or
communications posted to an internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification that
such notice or communication is available and identifying the website address
therefor.  (c)           Any party hereto may change its
address or telecopier number for notices and other communications hereunder by
notice to the other parties hereto.


SECTION 17.  Successors and Assigns.This Warrant shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns, provided that the Company shall have no right to assign its
rights, or to delegate its obligations, hereunder without the prior written
consent of the Holder.  SECTION 18.  Amendments.Neither this
Warrant nor any term hereof may be amended, changed, waived, discharged or
terminated without the prior written consent of the Holder and the Company.  SECTION 19.  Severability.Any provision of this Warrant which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.  SECTION 20.  Governing Law.This Warrant shall be governed by, and
construed in accordance with, the law of the State of New York.  SECTION 21.  Entire Agreement.This Warrant and the Credit Agreement are
intended by the parties as a final expression of their agreement and are
intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein.  SECTION 22.  Rules of Construction.  Unless the context otherwise requires or is
not exclusive, and references to sections or subsections refer to sections or
subsections of this Warrant.  All
pronouns and any variations thereof refer to the masculine, feminine or neuter,
singular or plural, as the context may require.  [Remainder of Page Intentionally Omitted.]


IN WITNESS WHEREOF,the Company
has caused this Warrant to be issued and executed in its corporate name by a
duly authorized officer or director as of the date first written above.   NORTHSTAR REALTY FINANCE
  CORP.,a Maryland corporationBy:
  Daniel R. GilbertName:
  Daniel R. GilbertTitle:
  Executive Vice Presidentand Chief Investment Officer


EXHIBIT A  NOTICE OF EXERCISE  To:   1.             The undersigned, pursuant to the provisions of the
attached Warrant, hereby elects to exercise this Warrant with respect to
                
shares of Common Stock (the Exercise Amount). 
Capitalized terms used but not otherwise defined herein have the
meanings ascribed thereto in the attached Warrant.  2.             The undersigned herewith tenders payment for such shares
in the following manner (please check type, or types, of payment and indicate
the portion of the Exercise Price to be paid by each type of payment):  oExercise for Cash oCashless Exercise  3.             Please issue a certificate or certificates representing
the shares issuable in respect hereof under the terms of the attached Warrant,
as follows:  (Name of Record Holder/Transferee)  and deliver such certificate or certificates to the following address:  (Address of Record Holder/Transferee)  4.             The undersigned represents that the aforesaid shares are
being acquired for the account of the undersigned for investment purposes and
not with a view to, or for resale in connection with, the distribution thereof
and that the undersigned has no present intention of distributing or reselling
such shares.  5.             If the Exercise Amount is less than all of the shares of
Common Stock purchasable hereunder, please issue a new warrant representing the
remaining balance of such shares, as follows:  (Name of Record Holder/Transferee)  and deliver such warrant to the following address:  (Address of Record Holder/Transferee)(Signature)(Date)