Document:

EXECUTIVE EMPLOYMENT AGREEMENT
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     This Executive Employment Agreement (the "Agreement") by and between
Jean-Michel Wasterlain ("Executive") and NorthStar Realty Finance Corp. (the
"Company"), is dated as of October 22, 2004 and none of the benefits hereunder
shall be payable unless and until the closing date (the "Effective Date") of the
initial public offering of the shares of common stock, par value $0.01 per share
(the "Common Stock"), of the Company pursuant to the registration statement on
Form S-11 (Reg. No. 333-114675) (the "IPO").

     WHEREAS, Executive and the Company desire to memorialize the terms and
conditions related to Executive's employment by the Company.

     NOW THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

     1. Agreements Between the Parties. This Agreement is intended to
memorialize all of the terms and conditions of Executive's employment by the
Company.

     2. Employment.

        (a) Term. The Company shall employ Executive, and Executive agrees to
be employed with the Company, upon the terms and conditions set forth in this
Agreement, for the period beginning on the Effective Date and ending on the
third anniversary of the Effective Date (the "Employment Period"); provided,
however, that commencing on the third anniversary of the Effective Date and on
each subsequent anniversary of the Effective Date (each such anniversary, a
"Renewal Date"), the Employment Period shall automatically be extended for one
additional year unless, not later than ninety (90) days prior to such Renewal
Date, the Company or Executive shall have given written notice not to extend the
Employment Period; provided, further, however, that the Employment Period shall
be subject to earlier termination as provided in Section 5(b) hereof (the
"Term").

        (b) Base Salary. Executive's initial base salary shall be $250,000 per
annum (pro-rated for partial calendar years), payable in equal bi-monthly
installments (as in effect from time to time, the "Base Salary"). In subsequent
years of the Term, the Base Salary shall be subject to annual review and
adjustment from time to time by the compensation committee of the Company's
board of directors (the "Compensation Committee").

        (c) Annual Bonus. For fiscal years during the Executive's employment
with the Company, Executive shall participate in an annual cash incentive
compensation plan as adopted and approved by the board of directors of the
Company (the "Board") from time to time, with applicable corporate and
individual performance targets and a maximum award amount as determined by the
Board in its discretion (the "Annual Cash Bonus"). The initial target amount of
the Annual Cash Bonus shall be 100% of Executive's Base Salary, but the actual
Annual Cash Bonus amount shall be determined by the Chief Executive Officer of
the Company, subject to approval of the Compensation Committee. In addition to
any Annual Cash Bonus, Executive shall be entitled annually to receive an annual
performance award (the "Outperformance Award") equal in amount to 15% of the net
profits realized over a 12% return on invested capital from the real estate
securities business (excluding the subordinated debt origination and investment
business) with respect to fiscal years during which Executive was employed by
the Company, subject to the terms, conditions and calculations as personally
agreed between the Executive and the Company and as set forth in Addendum A to
this Agreement. Subject to the terms and conditions set forth in Addendum A,
including the obligation to make a plan termination payment, the Company may
terminate the Executive's entitlement to future Outperformance Awards and, in
the event that such election is not made by the Company, payments of
Outperformance Awards may extend beyond Executive's termination of employment
and diminish in amount over time as provided in Addendum A. The Outperformance
Award may be paid in the form of cash, any equity award or a combination of cash
and an equity award, in the discretion of the Board; provided, however, that no
more than a number equal to 5% of the number of outstanding shares of Common
Stock as of the beginning of the Company's fiscal year may be available for
issuance pursuant to such Outperformance Awards during such fiscal year. Any
Annual Cash Bonus and/or Outperformance Award payable to Executive will be paid
at the time the Company normally pays such bonuses to its senior executives, but
in no event later than 90 days following the end of the applicable fiscal year,
and will be subject to the terms and conditions of the applicable annual cash
incentive compensation plan.

        (d) Long Term Incentive Plan. During Executive's employment with the
Company, Executive shall be eligible to receive long term equity incentive
compensation awards (which may consist of restricted stock, stock options, stock
appreciation rights or other types of awards, as determined by the Board in its
discretion) pursuant to the Company's equity incentive compensation plans and
programs in effect from time to time including, without limitation, the
Company's 2004 Omnibus Stock Inventive Plan. These awards shall be granted in
the discretion of the Board and shall include such terms and conditions
(including performance objectives) as the Board deems appropriate.

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        (e) Vacation. Executive shall be eligible for up to four weeks of annual
vacation to be accrued and payable in accordance with the Company's policy with
respect to senior executives.

        (f) Other Benefits. In addition, Executive will be eligible to
participate in all fringe benefit plans and retirement plans of the Company, as
are generally available to the other senior management employees of the Company,
such as health insurance plans, disability insurance plans, life insurance
plans, expense reimbursement and the Company's 401(k) retirement plan.

     3. Duties of Executive.

        (a) Duties of Position. During the Employment Period, Executive shall
serve as the Chief Investment Officer and an Executive Vice President of the
Company. Executive's duties shall include, without limitation, overseeing
implementation of the investment strategies and guidelines of the Company,
participating as a member of the Investment Committee in all credit and
underwriting decisions with regard to proposed investments, assisting and
participating in the location, structuring, financing, documentation and
diligencing of transactions for investment by the Company and its affiliates,
supervising the real estate securities investment business currently conducted
by NS Advisors LLC, assisting in the Company's capital raising efforts and the
management of the Company's investments, together with such other reasonable
assignments as may be assigned to him from time to time by the Chief Executive
Officer. Executive shall perform such duties and responsibilities, consistent
with Executive's title, training and experience, as are from time to time
reasonably assigned to Executive by the Chief Executive Officer of the Company.
Executive agrees to devote all of Executive's business time, attention and
energies to the performance of the duties assigned to Executive hereunder, and
to perform such duties faithfully, diligently and to the best of Executive's
abilities and subject to such laws, rules, regulations and policies from time to
time applicable to the Company's employees. The Company may assign all or a
portion of its rights and obligations under this agreement to any of its
affiliates or enter into an agreement with any of its affiliates that provides
that Executive will perform services on behalf of such affiliate and Executive
agrees to provide such services, as directed by the Company.

        (b) Confidential Information. Executive shall hold in confidence for the
benefit of the Company all of the information (other than information concerning
corporate opportunities) and business secrets in respect of the Company and all
of its affiliates, including, but not limited to, all information and data
relating to or concerned with the business, finances, pending transactions and
other affairs of the Company and all of its affiliates, and Executive shall not
at any time before or after Executive's

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employment by the Company is terminated for any reason, or Executive resigns for
any reason, willfully use or disclose or divulge any such information or data to
any other Person (as defined below) except (i) with the prior written consent of
the Company, (ii) to the extent necessary to comply with applicable law or the
valid order of a court of competent jurisdiction, in which event Executive shall
notify the Company as promptly as reasonably practicable (and, if possible,
prior to making such disclosure) and (iii) in the performance of Executive's
duties hereunder. With respect to information concerning corporate opportunities
of the Company and all of its affiliates that are developed, initiated or become
known to Executive during his employment with the Company, Executive shall hold
in confidence for the benefit of the Company all of such information in respect
of the Company and all of its affiliates, including, but not limited to, all
information and data relating to or concerned with such opportunities of the
Company and all of its affiliates, and Executive shall not at any time before or
within one (1) year after Executive's employment by the Company is terminated
for any reason, or Executive resigns for any reason, willfully use or disclose
or divulge any information relating to any such corporate opportunities to or
for the benefit of the Executive or any other Person (as defined below) except
(i) with the prior written consent of the Company, (ii) to the extent necessary
to comply with applicable law or the valid order of a court of competent
jurisdiction, in which event Executive shall notify the Company as promptly as
reasonably practicable (and, if possible, prior to making such disclosure) and
(iii) in the performance of Executive's duties hereunder. The foregoing
provisions of this Section 3(b) shall not apply to any information or data which
has been previously disclosed to the public or is otherwise in the public domain
in each case other than as a result of the breach by Executive of his
obligations under this Section 3(b). For purposes of this Agreement, "Person"
means an individual, corporation, partnership, limited liability company, joint
venture, association, trust, unincorporated organization, other entity or
"group" (as defined in the Securities Exchange Act of 1934).

     4. Termination of Employment. Executive's employment hereunder may be
terminated in accordance with this Section 4.

        (a) Death. Executive's employment hereunder shall terminate upon his
death.

        (b) Disability. If, as a result of Executive's incapacity due to
physical or mental illness, Executive shall have been absent from the full-time
performance of his duties hereunder for the entire period of six consecutive
months, and within thirty (30) days after written Notice of Termination (as
defined in Section 8) is given shall not have returned to the performance of his
duties hereunder on a full-time basis, the Company may terminate Executive's
employment hereunder for "Disability."

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        (c) Cause. The Company may terminate Executive's employment hereunder
for Cause. For purposes of this Agreement, the Company shall have "Cause" to
terminate Executive's employment hereunder upon the occurrence of any of the
following events:

          (i) the conviction of Executive for the commission of a felony;

          (ii) continuing willful failure for ten (10) business days to
          substantially perform his duties hereunder (other than such failure
          resulting from Executive's incapacity due to physical or mental
          illness or subsequent to the issuance of a Notice of Termination by
          Executive for Good Reason) after demand for substantial performance is
          delivered by the Company in writing that specifically identifies the
          manner in which the Company believes Executive has not substantially
          performed his duties; or

          (iii) misconduct by Executive (including, but not limited to, breach
          by Executive of the provisions of Section 7) that is demonstrably and
          materially injurious to the Company or its subsidiaries, whether
          monetarily or otherwise.

        (d) Good Reason. Executive may terminate his employment hereunder for
"Good Reason" within thirty (30) days after the occurrence, without his written
consent, of one of the following events that has not been cured within ten (10)
business days after written notice thereof has been given by Executive to the
Company:

          (i) the assignment to Executive of duties materially inconsistent with
          his status as an executive of the Company or the Executive is directed
          to directly report to someone other than the Chief Executive Officer
          of the Company or the Board;

          (ii) a reduction by the Company in Executive's Base Salary or a
          failure by the Company to pay any Base Salary or contractually
          committed cash bonus payment amounts when due;

          (iii) following a Change of Control (as defined below) of the Company,
          the requirement by the Company that the principal place of performance
          of Executive's services be at a location more than fifty (50) miles
          from the greater New York City metropolitan area;

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          (iv) any purported termination of Executive's employment which is not
          effected pursuant to a Notice of Termination satisfying the
          requirements of Section 5(a);

          (v) a material failure by the Company to comply with any other
          material provision of this Agreement.

     (e) Change of Control. For the purposes of Section 4(d) above, a "Change of
Control" of the Company shall be deemed to have occurred if an event set forth
in any one of the following paragraphs (i)-(iii) shall have occurred:

          (i) any Person is or becomes Beneficial Owner (as defined below),
          directly or indirectly, of securities of the Company representing
          thirty-five percent (35%) or more of the combined voting power of the
          then outstanding securities of the Company, excluding (A) any Person
          who becomes such a Beneficial Owner in connection with a transaction
          described in clause (x) of paragraph (ii) below, (B) any Person who
          becomes such a Beneficial Owner through the issuance of such
          securities with respect to purchases made directly from the Company,
          and (C) NorthStar Capital Investment Corp. ("NCIC") and its controlled
          affiliates; or

          (ii) the consummation of a merger or consolidation of the Company with
          any other corporation or the issuance of voting securities of the
          Company in connection with a merger or consolidation of the Company
          (or any direct or indirect subsidiary of the Company) pursuant to
          applicable stock exchange requirements, other than (x) a merger or
          consolidation which would result in the voting securities of the
          Company outstanding immediately prior to such merger or consolidation
          continuing to represent (either by remaining outstanding or by being
          converted into voting securities of the surviving entity or any parent
          thereof) fifty percent (50%) or more of the combined voting power of
          the securities of the Company or such surviving entity or any parent
          thereof outstanding immediately after such merger or consolidation, or
          (y) a merger or consolidation effected to implement a recapitalization
          of the Company (or similar transaction) in which no Person, other than
          NCIC together with its controlled affiliates, is or becomes the
          Beneficial Owner, directly or indirectly, of securities of the Company
          representing

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          thirty-five percent (35%) or more of the combined voting power of the
          then outstanding securities of the Company; or

          (iii) the stockholders of the Company approve a plan of complete
          liquidation or dissolution of the Company or an agreement for the sale
          or disposition by the Company of all or substantially all of the
          assets of the Company.

For purposes of this Agreement, "Beneficial Owner" shall have the meaning set
forth in Rule 13d-3 under the Exchange Act.

     (f) The Company may terminate Executive's employment at any time for any
reason, including without Cause.

     5. Termination Procedure.

        (a) Notice of Termination. Any termination of Executive's employment by
the Company or by Executive (other than termination pursuant to Section 6(a)
hereof) shall be communicated by written Notice of Termination to the other
party hereto in accordance with Section 12. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice that shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated.

        (b) Effect of Date of Termination. "Date of Termination" of this
Agreement shall mean (i) if the Term of this Agreement expires without renewal
as of the third anniversary of the Effective Date or any subsequent Renewal
Date, the date of such expiration (ii) if Executive's employment is terminated
pursuant to Section 4(a) above, the date of Executive's death (iii) if the
Executive's employment is terminated pursuant to Section 4(b) above, thirty (30)
days after delivery to the Executive of Notice of Termination (provided that
Executive shall not have returned to the performance of his duties on a
full-time basis during such thirty (30) day period), (iv) if Executive's
employment is terminated pursuant to Sections 4(c) and 4(f) above, the date
specified in the Notice of Termination, and (v) if Executive's employment is
terminated pursuant to Section 4(d) above, the date on which a Notice of
Termination is given or any later date (within 30 days) set forth in such Notice
of Termination, provided, however, that, if within thirty (30) days after any
Notice of Termination is given pursuant to Section 4(d)(iii) above, the party
receiving such Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination shall be the date on
which the dispute is finally determined, either by mutual written agreement of
the parties, by a binding and final arbitration award or by a final judgment,
order or

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decree of a court of competent jurisdiction (the time for appeal therefrom
having expired and no appeal having been perfected). Upon the Date of
Termination, the Term of this Agreement shall expire and the Company shall have
no further obligation to the Executive except to the extent the Executive is
otherwise entitled to any unpaid salary or benefits hereunder and insurance
coverage in accordance with applicable law; provided that the provisions set
forth in Sections 3(b), 6(b), 6(c), 7, and 14 hereof and this Section 5(b) shall
remain in full force and effect after the termination of the Executive's
employment, notwithstanding the expiration of the Term of or termination of this
Agreement.

     6. Obligations of the Company Upon Termination of Employment.

        (a) Expiration of Term, By the Company for Cause or by Executive without
Good Reason. If Executive's employment shall be terminated:

          (i) due to and upon expiration of the Term of this Agreement the
          Company shall pay Executive his full salary through the Date of
          Termination at the rate in effect at the time Notice of Termination is
          given, and an amount equal to the product of (x) all bonuses and
          awards (other than the Outperformance Award, which remains subject to
          its terms) in accordance with its terms that would have been earned by
          Executive upon completion of each award cycle that began during the
          Term but had not been completed as of the Date of Termination,
          calculated as though the full achievement of all goals and targets
          relating thereto had been achieved in full and (y) a fraction, the
          numerator of which shall be the number of days from the beginning of
          the applicable bonus or award cycle to and including the Date of
          Termination and the denominator of which shall be the number of days
          in such cycle; or

          (ii) if Executive's employment shall be terminated by the Company for
          Cause or by Executive without Good Reason, then the Company shall pay
          Executive his Base Salary (at the rate in effect at the time Notice of
          Termination is given) through the Date of Termination, and the Company
          shall have no additional obligations to Executive under this
          Agreement.

        (b) For any other reason. If Executive's employment shall be terminated
for any reason other than those provided in Section 6(a) above, then:

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          (i) the Company shall pay Executive his full salary through the Date
          of Termination at the rate in effect at the time Notice of Termination
          is given, and an amount equal to the product of (x) all bonuses and
          awards (other than the Outperformance Award, which remains subject to
          its terms) that would have been earned by Executive upon completion of
          each award cycle that began during the Term but had not been completed
          as of the Date of Termination, calculated as though the full
          achievement of all goals and targets relating thereto had been
          achieved in full and (y) a fraction, the numerator of which shall be
          the number of days from the beginning of the applicable bonus or award
          cycle to and including the Date of Termination and the denominator of
          which shall be the number of days in such cycle; and

          (ii) in lieu of paying any further compensation to Executive for
          periods subsequent to the Date of Termination, the Company shall pay
          to the Executive severance payments in the form of continuation of
          Executive's Base Salary in effect as of the Date of Termination for a
          period of two (2) years following such Date of Termination (the
          "Severance Payment Period") and the Outperformance Award in accordance
          with its terms.

        (c) Excise Taxes.

          (i) If any of the payments or benefits received or to be received by
          Executive, whether pursuant to the terms of this Agreement or any
          other plan, arrangement or agreement with the Company are deemed by
          the Auditor (as defined below), the Company's tax counsel ("Tax ----
          Counsel") or the Internal Revenue Services to constitute an excess
          parachute payment under Section 280(G) of the Internal Revenue Code of
          1986, as amended (the "Code") ---- (all such payments and benefits,
          excluding the Gross-Up Payment (which is defined below), being
          hereinafter referred to as the "Total Payments"), the Company shall
          pay -------------- to Executive an additional amount (the "Gross-Up
          Payment") such that the net amount ---------------- retained by
          Executive, after deduction of any total excise tax, together with all
          applicable interest and penalties (collectively, the "Excise Tax") Tax
          on the Total ---------- Payments and any federal, state and local
          income and employment taxes and Excise Tax upon the Gross-Up Payment,
          shall be equal to the Total Payments.

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          (ii) For purposes of determining whether any of the Total Payments
          will be subject to the Excise Tax and the amount of such Excise Tax,
          (i) all of the Total Payments shall be treated as "parachute payments"
          (within the meaning of section 280G(b)(2) of the Code) unless, in the
          opinion of Tax Counsel reasonably acceptable to Executive and selected
          by the accounting firm which was, immediately prior to the change in
          control, the Company's independent auditor (the "Auditor"), such
          payments or benefits (in whole or in part) ------- do not constitute
          parachute payments, including by reason of section 280G(b)(4)(A) of
          the Code, (ii) all "excess parachute payments" within the meaning of
          section 280G(b)(l) of the Code shall be treated as subject to the
          Excise Tax unless, in the opinion of Tax Counsel, such excess
          parachute payments (in whole or in part) represent reasonable
          compensation for services actually rendered (within the meaning of
          section 280G(b)(4)(B) of the Code) in excess of the base amount
          allocable to such reasonable compensation, or are otherwise not
          subject to the Excise Tax, and (iii) the value of any noncash benefits
          or any deferred payment or benefit shall be determined by the Auditor
          in accordance with the principles of sections 280G(d)(3) and (4) of
          the Code. For purposes of determining the amount of the Gross-Up
          Payment, Executive shall be deemed to pay federal income tax at the
          highest marginal rate of federal income taxation in the calendar year
          in which the Gross-Up Payment is to be made and state and local income
          taxes at the highest marginal rate of taxation in the state and
          locality of Executive's residence on the Date of Termination (or if
          there is no Date of Termination, then the date on which the Gross-Up
          Payment is calculated for purposes of this Section 6(b)), net of the
          maximum reduction in federal income taxes which could be obtained from
          deduction of such state and local taxes. If there has not been a Date
          of Termination with respect to Executive, the Company shall cause the
          Gross-Up Payment to be calculated within 30 days of a written request
          to that effect from Executive.

          (iii) Executive and the Company shall each reasonably cooperate with
          the other in connection with any administrative or judicial
          proceedings concerning the existence or amount of liability for Excise
          Tax with respect to the Total Payments.

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          (iv) The payments provided in this Section 6(c) shall be made not
          later than the fifth day following the Date of Termination (or if
          there is no Date of Termination, then the fifth day following date on
          which the Gross-Up Payment is calculated for purposes of Section 6(c),
          provided, however, that if the amounts of such payments cannot be
          finally determined on or before such day, the Company shall pay to
          Executive on such day an estimate, as determined in good faith by the
          Company, in accordance with Section 6(b), of the minimum amount of
          such payments to which Executive is clearly entitled and shall pay the
          remainder of such payments (together with interest on the unpaid
          remainder) at 120% of the rate provided in section 1274(b)(2)(B) of
          the Code) as soon as the amount thereof can be determined but in no
          event later than the thirtieth (30th) day after the occurrence of a
          Date of Termination. At the time that payments are made under this
          Agreement, the Company shall provide Executive with a written
          statement setting forth the manner in which such payments were
          calculated and the basis for such calculations including, without
          limitation, any opinions or other advice the Company has received from
          Tax Counsel, the Auditor or other advisors or consultants (and any
          such opinions or advice which are in writing shall be attached to the
          statement).

     7. Non-Solicitation and Business Relationships. Executive agrees that
during Executive's employment by the Company and for one (1) year following the
Executive's Date of Termination (the "Non-Solicitation Period"), Executive shall
not, directly or indirectly, (i) solicit, induce, or attempt to solicit or
induce any officer, director, employee, consultant, agent or joint venture
partner of the Company or any of its affiliates to terminate his, her or its
employment or other relationship with the Company or any of its affiliates for
the purpose of associating with any competitor of any the Company or any of its
affiliates, or otherwise encourage any such person to leave or sever his, her or
its employment or other relationship with the Company or any of its affiliates
for any other reason, or authorize the taking of such actions by any other
person or entity, or assist or participate with any such person or entity in
taking such action.

     8. Confidentiality. Each party to this Agreement shall keep strictly
confidential the terms of this Agreement, provided, that (i) either party to
this Agreement may disclose the terms of this Agreement with the prior written
consent of the other party, (ii) either party to this Agreement may disclose the
terms of this Agreement to the extent necessary to comply with law or legal
process, in which event

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the disclosing party shall notify the other party to this Agreement as promptly
as practicable (and, if possible, prior to making such disclosure), (iii) either
party to this Agreement may disclose the terms of this Agreement to outside
counsel, underwriters and accountants and (iv) the Company may disclose the
terms of this Agreement in public filings with the Securities and Exchange
Commission or other regulatory agencies, without notice to Executive, to the
extent that it believes such disclosure to be prudent, necessary or required by
applicable law in connection with the operation of the business of the Company
and shall have the right to file a copy of this Agreement with such regulating
agencies, it being understood that if this Agreement is so disclosed or filed,
Executive shall thereafter be released from his obligation in respect of this
Section 8.

     9. No Waiver. No failure or delay on the part of the Company or Executive
in exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the Company or
Executive at law or in equity. No waiver of or consent to any departure by
either the Company or Executive from any provision of this Agreement shall be
effective unless signed in writing by the party entitled to the benefit thereof.
No amendment, modification or termination of any provision of this Agreement
shall be effective unless signed in writing by all parties hereto. Any waiver of
any provision of this Agreement, and any consent to any departure from the terms
of any provision of this Agreement, shall be effective only in the specific
instance and for the specific purpose for which made or given.

     10. Severability of Provisions. Any provision of this Agreement that 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 or affecting the validity or
enforceability of such provision in any other jurisdiction. Moreover, if any one
or more of the provisions contained in this Agreement shall be held to be
excessively broad as to duration, activity or subject, such provision shall be
construed by limiting and reducing it so as to be enforceable to the maximum
extent allowed by applicable law.

     11. Non-Assignability. The rights and obligations of Executive under this
Agreement are personal to Executive and may not be assigned or delegated to any
other Person; provided, however, that nothing in this Agreement shall preclude
Executive from designating any of his beneficiaries to receive any benefits
payable hereunder upon his death, or his executors, administrators or other
legal representatives from assigning any rights hereunder to the person or
persons entitled thereto.

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     12. Notices. Any notice given hereunder shall be in writing and shall be
deemed to have been given when delivered by messenger or courier service
(against appropriate receipt), or mailed by registered or certified mail (return
receipt requested), addressed as follows:

               If to the Company:    NorthStar Realty Finance Corp.
                                     527 Madison Avenue, 16th Floor
                                     New York, NY 10022
                                     Attention:  General Counsel

               If to Executive:      Jean-Michel Wasterlain
                                     527 Madison Avenue, 16th Floor
                                     New York, NY 10022

or at such other address as shall be indicated to the parties hereto in writing.
Notice of change of address shall be effective only upon receipt.

     13. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York applicable to
contracts made and to be entirely performed within such State.

     14. Dispute Resolution:

        (a) Subject to the provisions of Section 14(b), any dispute, controversy
or claim arising between the parties relating to this Agreement, or otherwise
relating in any way to Executive's employment by or interest in the Company or
any of its affiliate (whether such dispute arises under any federal, state or
local statute or regulation, or at common law), shall be resolved by final and
binding arbitration before a single arbitrator, selected by the American
Arbitration Association in accordance with its rules pertaining at the time the
dispute arises. In such arbitration proceedings, the arbitrator shall have the
discretion, to be exercised in accordance with applicable law, to allocate among
the parties the arbitrator's fees, tribunal and other administrative and
litigation costs and, to the prevailing party, attorneys' fees. The award of the
arbitrator may be confirmed before and entered as a judgment of any court having
jurisdiction over the parties.

        (b) The provisions of Section 14(a) shall not apply with respect to any
application made by the Company for injunctive relief under this Agreement.

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     15. Headings. The paragraph headings used or contained in this Agreement
are for convenience of reference only and shall not affect the construction of
this Agreement.

     16. Entire Agreement. This Agreement and any agreements executed
contemporaneously herewith constitute the entire agreement between the parties
with respect to the matters set forth herein, and there are no promises or
undertakings with respect thereto relative to the subject matter hereof not
expressly set forth or referred to herein or therein.

     17. Execution in Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto on separate counterparts, each
of which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but one
and the same Agreement.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

                             --------------------------------
                             Jean-Michel Wasterlain

                             NORTHSTAR REALTY FINANCE CORP.

                             By:  -------------------------
                                  Name:  Mark E. Chertok
                                  Title: Chief Financial Officer
                                         and Treasurer

                                       14EXECUTIVE EMPLOYMENT AGREEMENT
                         ------------------------------

                  This Executive Employment Agreement (the "Agreement") by and
between Mark E. Chertok ("Executive") and NorthStar Realty Finance Corp. (the
"Company"), is dated as of October 22, 2004 and none of the benefits hereunder
shall be payable unless and until the closing date (the "Effective Date") of the
initial public offering of the shares of common stock, par value $0.01 per share
(the "Common Stock"), of the Company pursuant to the registration statement on
Form S-11 (Reg. No. 333-114675) (the "IPO").

                  WHEREAS, Executive and the Company desire to memorialize the
terms and conditions related to Executive's employment by the Company.

                  NOW THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

                  1. Agreements Between the Parties. This Agreement is intended
to memorialize all of the terms and conditions of Executive's employment by the
Company.

                  2. Employment.

                  (a) Term. The Company shall employ Executive, and Executive
agrees to be employed with the Company, upon the terms and conditions set forth
in this Agreement, for the period beginning on the Effective Date and ending on
the third anniversary of the Effective Date (the "Employment Period"); provided,
however, that commencing on the third anniversary of the Effective Date and on
each subsequent anniversary of the Effective Date (each such anniversary, a
"Renewal Date"), the Employment Period shall automatically be extended for one
additional year unless, not later than ninety (90) days prior to such Renewal
Date, the Company or Executive shall have given written notice not to extend the
Employment Period; provided, further, however, that the Employment Period shall
be subject to earlier termination as provided in Section 5(b) hereof (the
"Term").

                  (b) Base Salary. Executive's initial base salary shall be
$250,000 per annum (pro-rated for partial calendar years), payable in equal
bi-monthly installments (as in effect from time to time, the "Base Salary"). In
subsequent years of the Term, the Base Salary shall be subject to annual review
and adjustment from time to time by the compensation committee of the Company's
board of directors (the "Compensation Committee").

                  (c) Initial Cash Bonus. Executive shall be awarded a bonus in
an amount of $100,000 upon closing of the Company's initial public offering.

                  (d) Annual Cash Bonus. For fiscal years during the Executive's
employment with the Company, Executive shall participate in an annual cash
incentive compensation plan as adopted and approved by the board of directors of
the Company (the "Board") from time to time, with applicable corporate and
individual performance

targets and maximum award amounts determined by the Board (the "Annual Cash
Bonus"). The initial target amount of the Annual Cash Bonus shall be 100% of
Executive's Base Salary, but the actual Annual Cash Bonus amount shall be
determined by the Chief Executive Officer of the Company, subject to approval of
the Compensation Committee. Notwithstanding the foregoing, Executive shall be
awarded a minimum bonus for fiscal year 2004 in an amount of $150,000. Any
Annual Cash Bonus payable to Executive will be paid at the time the Company
normally pays such bonuses to its senior executives, but in no event later than
90 days following the end of the applicable fiscal year, and will be subject to
the terms and conditions of the applicable annual cash incentive compensation
plan.

                  (e) Long Term Incentive Plan. During Executive's employment
with the Company, Executive shall be eligible to receive long term equity
incentive compensation awards (which may consist of restricted stock, stock
options, stock appreciation rights or other types of equity or cash bonus
awards, as determined by the Board in its discretion) pursuant to the Company's
equity incentive compensation plans and programs in effect from time to time
including, without limitation, the Company's 2004 Omnibus Stock Incentive Plan
and the 2004 Long-Term Incentive Bonus Plan. These awards shall be granted in
the discretion of the Board and shall include such terms and conditions
(including performance objectives) as the Board deems appropriate.

                  (f) Vacation. Executive shall be eligible for up to four weeks
of annual vacation to be accrued and payable in accordance with the Company's
policy with respect to senior executives.

                  (g) Other Benefits. In addition, Executive will be eligible to
participate in all fringe benefit plans and retirement plans of the Company, as
are generally available to the other senior management employees of the Company,
such as health insurance plans, disability insurance plans, life insurance
plans, expense reimbursement and the Company's 401(k) retirement plan.

                  3. Duties of Executive.

                  (a) Duties of Position. During the Employment Period,
Executive shall serve as a Chief Financial Officer and Treasurer of the Company.
Executive shall be primarily responsible for the Company's financial functions
including all accounting, financial reporting, treasury, budgeting and planning.
The role will also have oversight responsibility of insurance, benefits and
payroll and will be involved in financings. Executive shall also maintain
relationships with the treasury, accounting and finance groups of the Company's
portfolio companies. Executive shall perform such duties and responsibilities,
consistent with Executive's title, training and experience, as are from time to
time reasonably assigned to Executive by the Chief Executive Officer of the
Company. Executive agrees to devote all of Executive's business time, attention
and energies to the performance of the duties assigned to Executive hereunder,
and to perform such duties faithfully, diligently and to the best of Executive's
abilities and subject to such laws, rules, regulations and policies from time to
time applicable to the Company's employees. The Company may assign all or a
portion of its rights and obligations under

                                       2

this agreement to any of its affiliates or enter into an agreement with any of
its affiliates that provides that Executive will perform services on behalf of
such affiliate and Executive agrees to provide such services, as directed by the
Company.

                  (b) Confidential Information. Executive shall hold in
confidence for the benefit of the Company all of the information (other than
information concerning corporate opportunities) and business secrets in respect
of the Company and all of its affiliates, including, but not limited to, all
information and data relating to or concerned with the business, finances,
pending transactions and other affairs of the Company and all of its affiliates,
and Executive shall not at any time before or after Executive's employment by
the Company is terminated for any reason, or Executive resigns for any reason,
willfully use or disclose or divulge any such information or data to any other
Person (as defined below) except (i) with the prior written consent of the
Company, (ii) to the extent necessary to comply with applicable law or the valid
order of a court of competent jurisdiction, in which event Executive shall
notify the Company as promptly as reasonably practicable (and, if possible,
prior to making such disclosure) and (iii) in the performance of Executive's
duties hereunder. With respect to information concerning corporate opportunities
of the Company and all of its affiliates that are developed, initiated or become
known to Executive during his employment with the Company, Executive shall hold
in confidence for the benefit of the Company all of such information in respect
of the Company and all of its affiliates, including, but not limited to, all
information and data relating to or concerned with such opportunities of the
Company and all of its affiliates, and Executive shall not at any time before or
within one (1) year after Executive's employment by the Company is terminated
for any reason, or Executive resigns for any reason, willfully use or disclose
or divulge any information relating to any such corporate opportunities to or
for the benefit of the Executive or any other Person (as defined below) except
(i) with the prior written consent of the Company, (ii) to the extent necessary
to comply with applicable law or the valid order of a court of competent
jurisdiction, in which event Executive shall notify the Company as promptly as
reasonably practicable (and, if possible, prior to making such disclosure) and
(iii) in the performance of Executive's duties hereunder. The foregoing
provisions of this Section 3(b) shall not apply to any information or data which
has been previously disclosed to the public or is otherwise in the public domain
in each case other than as a result of the breach by Executive of his
obligations under this Section 3(b). For purposes of this Agreement, "Person"
means an individual, corporation, partnership, limited liability company, joint
venture, association, trust, unincorporated organization, other entity or
"group" (as defined in the Securities Exchange Act of 1934).

                  4. Termination of Employment. Executive's employment hereunder
may be terminated in accordance with this Section 4.

                  (a) Death. Executive's employment hereunder shall terminate
upon his death.

                  (b) Disability. If, as a result of Executive's incapacity due
to physical or mental illness, Executive shall have been absent from the
full-time performance of his duties hereunder for the entire period of six
consecutive months, and within thirty (30)

                                       3

days after written Notice of Termination (as defined in Section 8) is given
shall not have returned to the performance of his duties hereunder on a
full-time basis, the Company may terminate Executive's employment hereunder for
"Disability."

                  (c) Cause. The Company may terminate Executive's employment
hereunder for Cause. For purposes of this Agreement, the Company shall have
"Cause" to terminate Executive's employment hereunder upon the occurrence of any
of the following events:

                  (i) the conviction of Executive for the commission of a
                  felony;

                  (ii) continuing willful failure for ten (10) business days to
                  substantially perform his duties hereunder (other than such
                  failure resulting from Executive's incapacity due to physical
                  or mental illness or subsequent to the issuance of a Notice of
                  Termination by Executive for Good Reason) after demand for
                  substantial performance is delivered by the Company in writing
                  that specifically identifies the manner in which the Company
                  believes Executive has not substantially performed his duties;
                  or

                  (iii) misconduct by Executive (including, but not limited to,
                  breach by Executive of the provisions of Section 7) that is
                  demonstrably and materially injurious to the Company or its
                  subsidiaries, whether monetarily or otherwise.

                  (d) Good Reason. Executive may terminate his employment
hereunder for "Good Reason" within thirty (30) days after the occurrence,
without his written consent, of one of the following events that has not been
cured within ten (10) business days after written notice thereof has been given
by Executive to the Company:

                  (i) the assignment to Executive of duties materially
                  inconsistent with his status as an executive of the Company;

                  (ii) a reduction by the Company in Executive's Base Salary or
                  a failure by the Company to pay any Base Salary or
                  contractually committed cash bonus payment amounts when due;

                  (iii) following a Change of Control (as defined below) of the
                  Company, the requirement by the Company that the principal
                  place of performance of Executive's services be at a location
                  more than fifty (50) miles from the greater New York City
                  metropolitan area;

                  (iv) any purported termination of Executive's employment which
                  is not effected pursuant to a Notice of Termination satisfying
                  the requirements of Section 5(a);

                  (v) a material failure by the Company to comply with any other
                  material provision of this Agreement.

                                       4

                  (e) Change of Control. For the purposes of Section 4(d) above,
a "Change of Control" of the Company shall be deemed to have occurred if an
event set forth in any one of the following paragraphs (i)-(iii) shall have
occurred:

                  (i) any Person is or becomes Beneficial Owner (as defined
                  below), directly or indirectly, of securities of the Company
                  representing thirty-five percent (35%) or more of the combined
                  voting power of the then outstanding securities of the
                  Company, excluding (A) any Person who becomes such a
                  Beneficial Owner in connection with a transaction described in
                  clause (x) of paragraph (ii) below, (B) any Person who becomes
                  such a Beneficial Owner through the issuance of such
                  securities with respect to purchases made directly from the
                  Company, and (C) NorthStar Capital Investment Corp. ("NCIC")
                  and its controlled affiliates; or

                  (ii) the consummation of a merger or consolidation of the
                  Company with any other corporation or the issuance of voting
                  securities of the Company in connection with a merger or
                  consolidation of the Company (or any direct or indirect
                  subsidiary of the Company) pursuant to applicable stock
                  exchange requirements, other than (x) a merger or
                  consolidation which would result in the voting securities of
                  the Company outstanding immediately prior to such merger or
                  consolidation continuing to represent (either by remaining
                  outstanding or by being converted into voting securities of
                  the surviving entity or any parent thereof) fifty percent
                  (50%) or more of the combined voting power of the securities
                  of the Company or such surviving entity or any parent thereof
                  outstanding immediately after such merger or consolidation, or
                  (y) a merger or consolidation effected to implement a
                  recapitalization of the Company (or similar transaction) in
                  which no Person, other than NCIC together with its affiliates,
                  is or becomes the Beneficial Owner, directly or indirectly, of
                  securities of the Company representing thirty-five percent
                  (35%) or more of the combined voting power of the then
                  outstanding securities of the Company; or

                  (iii) the stockholders of the Company approve a plan of
                  complete liquidation or dissolution of the Company or an
                  agreement for the sale or disposition by the Company of all or
                  substantially all of the assets of the Company.

For purposes of this Agreement, "Beneficial Owner" shall have the meaning set
forth in Rule 13d-3 under the Exchange Act.

                  (f) The Company may terminate Executive's employment at any
time for any reason, including without Cause.

                                       5

5. Termination Procedure.

                  (a) Notice of Termination. Any termination of Executive's
employment by the Company or by Executive (other than termination pursuant to
Section 6(a) hereof) shall be communicated by written Notice of Termination to
the other party hereto in accordance with Section 12. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice that shall indicate the
specific termination provision in this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated.

                  (b) Effect of Date of Termination. "Date of Termination" of
this Agreement shall mean (i) if the Term of this Agreement expires without
renewal as of the third anniversary of the Effective Date or any subsequent
Renewal Date, the date of such expiration (ii) if Executive's employment is
terminated pursuant to Section 4(a) above, the date of Executive's death (iii)
if the Executive's employment is terminated pursuant to Section 4(b) above,
thirty (30) days after delivery to the Executive of Notice of Termination
(provided that Executive shall not have returned to the performance of his
duties on a full-time basis during such thirty (30) day period), (iv) if
Executive's employment is terminated pursuant to Sections 4(c) and 4(f) above,
the date specified in the Notice of Termination, and (v) if Executive's
employment is terminated pursuant to Section 4(d) above, the date on which a
Notice of Termination is given or any later date (within 30 days) set forth in
such Notice of Termination, provided, however, that, if within thirty (30) days
after any Notice of Termination is given pursuant to Section 4(d)(iii) above,
the party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, the Date of Termination shall be the
date on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding and final arbitration award or by a final
judgment, order or decree of a court of competent jurisdiction (the time for
appeal therefrom having expired and no appeal having been perfected). Upon the
Date of Termination, the Term of this Agreement shall expire and the Company
shall have no further obligation to the Executive except to the extent the
Executive is otherwise entitled to any unpaid salary or benefits hereunder and
insurance coverage in accordance with applicable law; provided that the
provisions set forth in Sections 3(b), 6(b), 6(c), 7, and 14 hereof and this
Section 5(b) shall remain in full force and effect after the termination of the
Executive's employment, notwithstanding the expiration of the Term of or
termination of this Agreement.

6. Obligations of the Company Upon Termination of Employment.

                  (a) Expiration of Term, By the Company for Cause or by
Executive without Good Reason. If Executive's employment shall be terminated:

                  (i) due to and upon expiration of the Term of this Agreement
                  the Company shall pay Executive his full salary through the
                  Date of Termination at the rate in effect at the time Notice
                  of Termination is given, and an amount equal to the product of
                  (x) all

                                       6

                  bonuses and awards that would have been earned by Executive
                  upon completion of each award cycle that began during the Term
                  but had not been completed as of the Date of Termination,
                  calculated as though the full achievement of all goals and
                  targets relating thereto had been achieved in full and (y) a
                  fraction, the numerator of which shall be the number of days
                  from the beginning of the applicable bonus or award cycle to
                  and including the Date of Termination and the denominator of
                  which shall be the number of days in such cycle; or

                  (ii) if Executive's employment shall be terminated by the
                  Company for Cause or by Executive without Good Reason, then
                  the Company shall pay Executive his Base Salary (at the rate
                  in effect at the time Notice of Termination is given) through
                  the Date of Termination, and the Company shall have no
                  additional obligations to Executive under this Agreement.

                  (b) For any other reason. If Executive's employment shall be
terminated for any reason other than those provided in Section 6(a) above, then:

                  (i) the Company shall pay Executive his full salary through
                  the Date of Termination at the rate in effect at the time
                  Notice of Termination is given, and an amount equal to the
                  product of (x) all bonuses and awards that would have been
                  earned by Executive upon completion of each award cycle that
                  began during the Term but had not been completed as of the
                  Date of Termination, calculated as though the full achievement
                  of all goals and targets relating thereto had been achieved in
                  full and (y) a fraction, the numerator of which shall be the
                  number of days from the beginning of the applicable bonus or
                  award cycle to and including the Date of Termination and the
                  denominator of which shall be the number of days in such
                  cycle; and

                  (ii) in lieu of paying any further compensation to Executive
                  for periods subsequent to the Date of Termination, the Company
                  shall pay to the Executive severance payments in the form of
                  continuation of Executive's Base Salary in effect as of the
                  Date of Termination for a period of two (2) years following
                  such Date of Termination (the "Severance Payment Period").

                  (c) Excise Taxes.

                  (i) If any of the payments or benefits received or to be
                  received by Executive, whether pursuant to the terms of this
                  Agreement or any other plan, arrangement or agreement with the
                  Company are deemed by the Auditor (as defined below), the
                  Company's tax counsel ("Tax Counsel") or the Internal Revenue

                                       7

                  Services to constitute an excess parachute payment under
                  Section 280(G) of the Internal Revenue Code of 1986, as
                  amended (the "Code") (all such payments and benefits,
                  excluding the Gross-Up Payment (which is defined below), being
                  hereinafter referred to as the "Total Payments"), the Company
                  shall pay to Executive an additional amount (the "Gross-Up
                  Payment") such that the net amount retained by Executive,
                  after deduction of any total excise tax, together with all
                  applicable interest and penalties (collectively, the "Excise
                  Tax") Tax on the Total Payments and any federal, state and
                  local income and employment taxes and Excise Tax upon the
                  Gross-Up Payment, shall be equal to the Total Payments.

                  (ii) For purposes of determining whether any of the Total
                  Payments will be subject to the Excise Tax and the amount of
                  such Excise Tax, (i) all of the Total Payments shall be
                  treated as "parachute payments" (within the meaning of section
                  280G(b)(2) of the Code) unless, in the opinion of Tax Counsel
                  reasonably acceptable to Executive and selected by the
                  accounting firm which was, immediately prior to the change in
                  control, the Company's independent auditor (the "Auditor"),
                  such payments or benefits (in whole or in part) do not
                  constitute parachute payments, including by reason of section
                  280G(b)(4)(A) of the Code, (ii) all "excess parachute
                  payments" within the meaning of section 280G(b)(l) of the Code
                  shall be treated as subject to the Excise Tax unless, in the
                  opinion of Tax Counsel, such excess parachute payments (in
                  whole or in part) represent reasonable compensation for
                  services actually rendered (within the meaning of section
                  280G(b)(4)(B) of the Code) in excess of the base amount
                  allocable to such reasonable compensation, or are otherwise
                  not subject to the Excise Tax, and (iii) the value of any
                  noncash benefits or any deferred payment or benefit shall be
                  determined by the Auditor in accordance with the principles of
                  sections 280G(d)(3) and (4) of the Code. For purposes of
                  determining the amount of the Gross-Up Payment, Executive
                  shall be deemed to pay federal income tax at the highest
                  marginal rate of federal income taxation in the calendar year
                  in which the Gross-Up Payment is to be made and state and
                  local income taxes at the highest marginal rate of taxation in
                  the state and locality of Executive's residence on the Date of
                  Termination (or if there is no Date of Termination, then the
                  date on which the Gross-Up Payment is calculated for purposes
                  of this Section 6(b)), net of the maximum reduction in federal
                  income taxes which could be obtained from deduction of such
                  state and local taxes. If there has not been a Date of
                  Termination with respect to Executive, the Company shall cause
                  the Gross-Up Payment to be calculated within 30 days of a
                  written request to that effect from Executive.

                                       8

                  (iii) Executive and the Company shall each reasonably
                  cooperate with the other in connection with any administrative
                  or judicial proceedings concerning the existence or amount of
                  liability for Excise Tax with respect to the Total Payments.

                  (iv) The payments provided in this Section 6(c) shall be made
                  not later than the fifth day following the Date of Termination
                  (or if there is no Date of Termination, then the fifth day
                  following date on which the Gross-Up Payment is calculated for
                  purposes of Section 6(c), provided, however, that if the
                  amounts of such payments cannot be finally determined on or
                  before such day, the Company shall pay to Executive on such
                  day an estimate, as determined in good faith by the Company,
                  in accordance with Section 6(b), of the minimum amount of such
                  payments to which Executive is clearly entitled and shall pay
                  the remainder of such payments (together with interest on the
                  unpaid remainder) at 120% of the rate provided in section
                  1274(b)(2)(B) of the Code) as soon as the amount thereof can
                  be determined but in no event later than the thirtieth (30th)
                  day after the occurrence of a Date of Termination. At the time
                  that payments are made under this Agreement, the Company shall
                  provide Executive with a written statement setting forth the
                  manner in which such payments were calculated and the basis
                  for such calculations including, without limitation, any
                  opinions or other advice the Company has received from Tax
                  Counsel, the Auditor or other advisors or consultants (and any
                  such opinions or advice which are in writing shall be attached
                  to the statement).

                  7. Non-Solicitation and Business Relationships. Executive
agrees that during Executive's employment by the Company and for one (1) year
following the Executive's Date of Termination (the "Non-Solicitation Period"),
Executive shall not, directly or indirectly, (i) solicit, induce, or attempt to
solicit or induce any officer, director, employee, consultant, agent or joint
venture partner of the Company or any of its affiliates to terminate his, her or
its employment or other relationship with the Company or any of its affiliates
for the purpose of associating with any competitor of any the Company or any of
its affiliates, or otherwise encourage any such person to leave or sever his,
her or its employment or other relationship with the Company or any of its
affiliates for any other reason, or authorize the taking of such actions by any
other person or entity, or assist or participate with any such person or entity
in taking such action.

                  8. Confidentiality. Each party to this Agreement shall keep
strictly confidential the terms of this Agreement, provided, that (i) either
party to this Agreement may disclose the terms of this Agreement with the prior
written consent of the other party, (ii) either party to this Agreement may
disclose the terms of this Agreement to the extent necessary to comply with law
or legal process, in which event the disclosing party shall notify the other
party to this Agreement as promptly as practicable (and, if possible, prior to
making such disclosure), (iii) either party to this Agreement may disclose the

                                       9

terms of this Agreement to outside counsel, underwriters and accountants and
(iv) the Company may disclose the terms of this Agreement in public filings with
the Securities and Exchange Commission or other regulatory agencies, without
notice to Executive, to the extent that it believes such disclosure to be
prudent, necessary or required by applicable law in connection with the
operation of the business of the Company and shall have the right to file a copy
of this Agreement with such regulating agencies, it being understood that if
this Agreement is so disclosed or filed, Executive shall thereafter be released
from his obligation in respect of this Section 8.

                  9. No Waiver. No failure or delay on the part of the Company
or Executive in exercising any right, power or remedy hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to the
Company or Executive at law or in equity. No waiver of or consent to any
departure by either the Company or Executive from any provision of this
Agreement shall be effective unless signed in writing by the party entitled to
the benefit thereof. No amendment, modification or termination of any provision
of this Agreement shall be effective unless signed in writing by all parties
hereto. Any waiver of any provision of this Agreement, and any consent to any
departure from the terms of any provision of this Agreement, shall be effective
only in the specific instance and for the specific purpose for which made or
given.

                  10. Severability of Provisions. Any provision of this
Agreement that 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 or
affecting the validity or enforceability of such provision in any other
jurisdiction. Moreover, if any one or more of the provisions contained in this
Agreement shall be held to be excessively broad as to duration, activity or
subject, such provision shall be construed by limiting and reducing it so as to
be enforceable to the maximum extent allowed by applicable law.

                  11. Non-Assignability. The rights and obligations of Executive
under this Agreement are personal to Executive and may not be assigned or
delegated to any other Person; provided, however, that nothing in this Agreement
shall preclude Executive from designating any of his beneficiaries to receive
any benefits payable hereunder upon his death, or his executors, administrators
or other legal representatives from assigning any rights hereunder to the person
or persons entitled thereto.

                  12. Notices. Any notice given hereunder shall be in writing
and shall be deemed to have been given when delivered by messenger or courier
service (against appropriate receipt), or mailed by registered or certified mail
(return receipt requested), addressed as follows:

                           If to the Company:     NorthStar Realty Finance Corp.
                                                  527 Madison Avenue, 16th Floor
                                                  New York, NY 10022

                                       10

                                                  Attention: General Counsel

                           If to Executive:       Mark E. Chertok
                                                  527 Madison Avenue, 16th Floor
                                                  New York, NY 10022

or at such other address as shall be indicated to the parties hereto in writing.
Notice of change of address shall be effective only upon receipt.

                  13. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York
applicable to contracts made and to be entirely performed within such State.

                  14. Dispute Resolution:

                  (a) Subject to the provisions of Section 14(b), any dispute,
controversy or claim arising between the parties relating to this Agreement, or
otherwise relating in any way to Executive's employment by or interest in the
Company or any of its affiliate (whether such dispute arises under any federal,
state or local statute or regulation, or at common law), shall be resolved by
final and binding arbitration before a single arbitrator, selected by the
American Arbitration Association in accordance with its rules pertaining at the
time the dispute arises. In such arbitration proceedings, the arbitrator shall
have the discretion, to be exercised in accordance with applicable law, to
allocate among the parties the arbitrator's fees, tribunal and other
administrative and litigation costs and, to the prevailing party, attorneys'
fees. The award of the arbitrator may be confirmed before and entered as a
judgment of any court having jurisdiction over the parties.

                  (b) The provisions of Section 14(a) shall not apply with
respect to any application made by the Company for injunctive relief under this
Agreement.

                  15. Headings. The paragraph headings used or contained in this
Agreement are for convenience of reference only and shall not affect the
construction of this Agreement.

                  16. Entire Agreement. This Agreement and any agreements
executed contemporaneously herewith constitute the entire agreement between the
parties with respect to the matters set forth herein, and there are no promises
or undertakings with respect thereto relative to the subject matter hereof not
expressly set forth or referred to herein or therein.

                  17. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.

                                       11

                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement.

                                 ---------------------------------------------
                                 Mark E. Chertok

                                 NORTHSTAR REALTY FINANCE CORP.

                                 By:
                                     -----------------------------------------
                                     Name: Richard J. McCready
                                     Title: General Counsel and Secretary

                                       12

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