Document:

EXECUTIVE EMPLOYMENT AGREEMENT
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     This Executive Employment Agreement (the "Agreement") by and between Daniel
R. Gilbert ("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, the Company desires to employ the Executive, and Employee desires
to accept such employment, and

     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 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 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 shall be determined by the Chief Executive Officer of the
Company, subject to approval of the Compensation Committee. 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.

        (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 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.

        (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 an Executive Vice President/Managing Director of Mezzanine Lending of
the Company. Executive's duties shall include, without limitation, managing the
Company's mezzanine real estate lending business as to maximize risk adjusted
returns to the Company, including formulating and implementing the overall
business strategy, sourcing, pricing, originating and acquiring investments in
mezzanine loans, loan participations, "B" notes and other subordinate real
estate debt and preferred equity investments; implementing and supervising asset
management for the Company's mezzanine loan/subordinate debt portfolio.
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
shall report directly to 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

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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 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.

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        (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."

        (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 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

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          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 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.

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        (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 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.

        (a) 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").

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        (b) 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.

          (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)),

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          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.

          (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.

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     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 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:      Daniel R. Gilbert
                                     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.

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     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.

                                --------------------------------------
                                Daniel R. Gilbert

                                NORTHSTAR REALTY FINANCE CORP.

                                By: -----------------------------------
                                    Name:  Mark E. Chertok
                                    Title: Chief Financial Officer
                                           and TreasurerNORTHSTAR REALTY FINANCE CORP.
                       2004 LONG-TERM INCENTIVE BONUS PLAN

1. Purpose. This Plan is intended to create incentives for certain employees and
other key individuals to allow the Company to attract and retain the services of
persons who will contribute to the future success of the Company. It is the
intent of the Company that compensation payable under this Plan shall qualify as
performance-based compensation within the meaning of Section 162(m) of the Code.

2. Definitions. Capitalized terms not otherwise defined herein shall have the
meanings set forth below:

     (a) "Actual FFO" shall mean, with respect to any Performance Period, "funds
from operations" of the Company as determined with respect to such Performance
Period by the Board using a consistently applied methodology that conforms with
the standards for computation of "funds from operations" established by the
National Association of Real Estate Investment Trusts, Inc. (or successor
organizations) from time to time; it being understood that, to the extent that
the Company discloses "funds from operations" for any Performance Period in any
of its periodic reports publicly-filed with the Securities and Exchange
Commission, Actual FFO for such Performance Period for the purposes of this Plan
will conform to such publicly-disclosed "funds from operations."

     (b) "Actual FFO Per Share" shall mean, with respect to any Performance
Period, the Actual FFO for such period divided by the number of Common
Equivalent Shares.

     (c) "Additional IPO Shares" shall mean any Shares that the Company issues
and sells to the IPO Underwriters pursuant to the underwriting agreement
relating to the Initial Public Offering in excess of the Initial IPO Shares, but
excluding any Overallotment IPO Shares.

     (d) "Adjusted FFO" shall mean, with respect to any Performance Period, the
Actual FFO for such period as adjusted to exclude any non-cash item of the
Company.

     (e) "Adjusted FFO Per Share" shall mean, with respect to any Performance
Period, the Adjusted FFO for such period divided by the number of Common
Equivalent Shares.

     (f) "Average Paid in Capital Per Share" shall mean, with respect to any
Performance Period, (i) the sum of the Paid in Capital Per Share on each day of
the Performance Period, divided by (ii) the number of days in the Performance
Period.

     (g) "Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under
the Exchange Act.

     (h) "Board" shall mean the Board of Directors of the Company.

     (i) "Change in Control" of the Company shall be deemed to have occurred if
an event set forth in any one of the following paragraphs (A)-(C) shall have
occurred:

               (A) any Person is or becomes 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, excluding (i) any Person who
          becomes such a Beneficial Owner in connection with a transaction
          described in clause (x) of paragraph (B) below, (ii) any Person who
          becomes such a Beneficial Owner through the issuance of such
          securities with respect to purchases made directly from the Company;
          and (iii) NCIC or any of its majority-owned or controlled
          subsidiaries; or

               (B) 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 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

               (C) 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.

     (j) "Code" shall mean the Internal Revenue Code of 1986, as amended.

     (k) "Committee" shall mean those members of the Compensation Committee of
the Board of Directors of the Company who are "outside directors" and
"disinterested persons" as such terms are defined under the Code, applicable
regulations and Rule 16b-3 promulgated under the Securities Exchange Act of
1934, as amended, respectively.

     (l) "Common Equivalent Shares" shall mean the total number of Shares
outstanding on a fully-diluted basis, calculated in a manner consistent with the
manner used by the Company for reporting diluted earnings or loss per Share
under generally accepted accounting principles, it being understood that, to the
extent that the Company discloses diluted earnings or loss per share in any of
its periodic reports publicly-filed with the Securities and Exchange Commission,
Common Equivalent Shares for such period for the purposes of this Plan shall be
calculated in a manner consistent with such public disclosure.

     (m) "Company" shall mean NorthStar Realty Finance Corp.

                                       2

     (n) "Eligible Recipient" shall mean an officer, director (including a
non-employee director), employee, co-employee, consultant or advisor (including
any trust, partnership, limited liability company or other entity beneficially
owned by such individuals) of the Company or of any Parent or Subsidiary who
provide services to the Company. For purposes of this definition, "consultants"
shall include those employees of NCIC, or its majority-owned subsidiaries who
provide services to the Company pursuant to that certain Shared Facilities and
Services Agreement between the Company and NCIC.

     (o) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.

     (p) "Fair Market Value" shall mean, as of any given date, the fair market
value of a Share as determined by the Committee using any reasonable method and
in good faith; provided that (i) if Shares are admitted to trading on a national
securities exchange, the fair market value of a Share on any date shall be the
closing sale price reported for such share on the exchange on such date on which
a sale was reported; (ii) if Shares are admitted to quotation on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") or a
successor quotation system and has been designated as a National Market System
("NMS") security, fair market value of a Share on any date shall be the closing
sale price reported for such Share on the system on such date on which a sale
was reported; and (iii) if Shares are admitted to quotation on the NASDAQ but
have not been designated as an NMS security, fair market value of a Share on any
such date shall be the average of the highest bid and lowest asked prices for
such Share on the system on such date on which both the bid and asked prices
were reported. For purposes of this definition, the Fair Market Value on the
date of the closing of the Initial Public Offering will be deemed to be the
Initial Offering Price.

     (q) "Fiscal Year" shall mean the fiscal year of the Company, which is the
calendar year.

     (r) "Immediate Family" shall mean any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law or sister-in-law, and shall include
adoptive relationships of the Participant.

     (s) "Incentive Bonus Award" shall mean, with respect to a Participant for
any Performance Period, the incentive bonus award payable hereunder to such
Participant with respect to such Performance Period.

     (t) "Initial IPO Shares" shall mean the initial 20,000,000 Shares that the
Company issues and sells to the IPO Underwriters pursuant to the underwriting
agreement.

     (u) "Initial Offering Price" shall mean the "Price to Public" of the
Initial IPO Shares set forth on the cover page of the IPO Prospectus.

     (v) "Initial Public Offering" shall mean the initial underwritten public
offering of Shares pursuant to the IPO Prospectus.

     (w) "Internal Rate of Return" shall mean the discount rate that would cause
the net present value of investing, on a specified starting date, an amount
equal to the Fair Market Value

                                       3

on the starting date to equal, on the ending date, the net present value of (i)
all dividends and distributions paid with respect to a Share from the starting
date through the ending date (excluding dividends and distributions paid in the
form of additional Shares) and (ii) the Share Value on the ending date.

     (x) "IPO Prospectus" shall mean the Company's prospectus relating to the
Initial Public Offering as filed with the Securities and Exchange Commission
pursuant to Rule 424(b) under the Securities Act and deemed a part of the
Company's registration statement on Form S-11 (No. 333-114675) at the time such
registration statement is declared effective by the Securities and Exchange
Commission.

     (y) "IPO Underwriters" shall mean the underwriters of the Initial Public
Offering.

     (z) "LTIP Units" shall have the meaning set forth in the Partnership
Agreement.

     (aa) "NCIC" means NorthStar Capital Investment Corp., a Maryland
corporation.

     (bb) "Other Share-Based Awards" shall mean an award granted pursuant to
Section 10.

     (cc) "Overallotment IPO Shares" shall mean any Shares that the Company
issues and sells to the IPO Underwriters as a result of any exercise of the
overallotment option granted by the Company to the IPO Underwriters pursuant to
the underwriting agreement relating to the Initial Public Offering.

     (dd) "Paid in Capital" shall mean the sum of (i) the sum of the number of
Common Equivalent Shares plus the number of Units outstanding (without double
counting the Units in the event that they are already part of the total Common
Equivalent Shares) at the Initial Public Offering, multiplied by the Initial
Offering Price, (ii) for any post-Initial Public Offering acquisitions or
offerings for Shares or Units, the number of such Shares and Units multiplied by
the Fair Market Value on the date of such acquisition or offering, and (iii) for
any post-Initial Public Offering Shares and Units paid for contributed assets,
the number of such Shares and Units multiplied by the average Fair Market Value
on the ten trading days immediately prior to the date of such contribution.

     (ee) "Paid in Capital Per Share" shall mean, with respect to any date, the
Paid in Capital on such date divided by the sum of the number of Common
Equivalent Shares plus the number of Units outstanding (without double counting
the Units in the event that they are already part of the total Common Equivalent
Shares) on such date.

     (ff) "Parent" shall mean any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations in the chain (other than the Company) owns stock possessing 50% or
more of the combined voting power of all classes of stock in one of the other
corporations in the chain.

     (gg) "Participant" shall mean an Eligible Recipient designated by the
Committee pursuant to Section 6 to participate herein with respect to a
Performance Period.

                                       4

     (hh) "Partnership Agreement" shall mean the Amended and Restated Agreement
of Limited Partnership of NorthStar Realty Finance Limited Partnership, as
amended from time to time.

     (ii) "Partnership Common Unit" shall have the meaning set forth in the
Partnership Agreement.

     (jj) "Performance Period" shall mean the fiscal year of the Company, or
such other period as specified by the Committee.

     (kk) "Person" shall mean 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).

     (ll) "Plan" shall mean the NorthStar Realty Finance Corp. 2004 Long-Term
Incentive Bonus Plan, as amended from time to time.

     (mm) "Restricted Shares" shall mean Shares subject to certain restrictions
granted pursuant to Section 9 below.

     (nn) "Return on Paid in Capital" shall mean, with respect to any
Performance Period, the Adjusted FFO Per Share for such period divided by the
Average Paid in Capital Per Share for such period.

     (oo) "Securities Act" shall mean the Securities Act of 1933, as amended.

     (pp) "Share" shall mean a share of the common stock, par value $.01 per
share, of the Company.

     (qq) "Share Value," as of any given date shall mean the Fair Market Value
on such date, except that:

               (A) the Share Value on the date of a Change in Control as
          described in clause (A) of the definition of such term shall mean the
          highest price per Share paid during the prior six months by the Person
          causing the Change in Control by being or becoming a Beneficial Owner
          of the type described in clause (A) thereof, unless the Change in
          Control occurs as a result of a tender offer for Shares, in which case
          the Share Value will equal the cash value, as determined by the Board,
          in good faith, of the consideration paid for one Share in the tender
          offer; and

               (B) the Share Value on the date of a Change in Control as
          described in clause (B) of the definition of such term shall mean the
          cash value, as determined by the Board, in good faith, of the
          consideration paid for one Share in the transaction causing the Change
          in Control.

                                       5

     (rr) "Subsidiary" shall mean any corporation or other entity (other than
the Company) in which the Company has a controlling interest, either directly or
indirectly.

     (ss) "Unit" or "Units" shall mean a unit or units of limited partnership
interest in NorthStar Realty Finance Limited Partnership, a Delaware limited
partnership and the entity through which the Company conducts a significant
portion of its business.

3.   Administration.

     3.1 The Plan shall be administered in accordance with the requirements of
Section 162(m) of the Code (but only to the extent necessary and desirable to
maintain qualification of Incentive Bonus Awards under the Plan under Section
162(m) of the Code) and, to the extent applicable, Rule 16b-3 under the Exchange
Act by the Committee.

     3.2 The Committee shall have the power and authority to select
Participants, to grant Incentive Bonus Awards to such Participants, and to
determine whether and to what extent such Incentive Bonus Awards will be payable
in cash, Shares, Restricted Shares, Other Share-Based Awards or any combination
of the foregoing pursuant to the terms of the Plan. In particular, but without
limitation, the Committee shall have the authority:

     (a) to determine the terms and conditions, not inconsistent with the terms
of the Plan, of each Incentive Bonus Award granted hereunder, including the
waiver or modification of any such terms or conditions;

     (b) to determine the terms and conditions, not inconsistent with the terms
of the Plan, which shall govern all written instruments evidencing Incentive
Bonus Awards granted hereunder, including the waiver or modification of any such
terms or conditions;

     (c) to adopt, alter and repeal such administrative rules, guidelines and
practices governing the Plan as it shall from time to time deem advisable; and

     (d) to interpret the terms and provisions of the Plan and any Incentive
Bonus Award issued under the Plan (and any award agreements relating thereto)
and to otherwise supervise the administration of the Plan.

     3.3 The Committee may, in its absolute discretion, without amendment to the
Plan, accelerate the lapse of restrictions, or waive any condition imposed
hereunder, with respect to any Restricted Shares and Other Share-Based Awards,
or otherwise adjust any of the terms applicable to any such awards; provided,
however, that no action under this Section 3.3 shall adversely affect any
outstanding Incentive Bonus Award without the consent of the holder thereof.

     3.4 All decisions made by the Committee pursuant to the provisions of the
Plan shall be final, conclusive and binding on all persons, including the
Company and the Participants. No member of the Board or the Committee, nor any
officer or employee of the Company acting on behalf of the Board or the
Committee, shall be personally liable for any action, determination, or

                                       6

interpretation taken or made in good faith with respect to the Plan, and all
members of the Board or the Committee and each and any officer or employee of
the Company acting on their behalf shall, to the extent permitted by law, be
fully indemnified and protected by the Company in respect of any such action,
determination or interpretation.

4.   Shares Reserved for Issuance Under the Plan.

     4.1 The total number of Shares reserved and available for issuance under
the Plan (the "Reserved Shares") shall initially be 669,123 Shares. The number
of Reserved Shares shall be automatically increased (without any further action
by the Board or the stockholders of the Company) by the number of Shares that is
equal to two and one-half percent (2.5%) of any Additional IPO Shares and any
Overallotment IPO Shares; provided, however, that the maximum number of Reserved
Shares shall not exceed 859,123, subject to adjustment as set forth in Section 5
below. Such Shares may consist, in whole or in part, of authorized and unissued
Shares or treasury Shares.

     4.2 Subject to the provisions of Section 162(m) of the Code, as from time
to time applicable, to the extent that any Shares subject to any Incentive Bonus
Awards granted hereunder are cancelled, terminated or forfeited, such Shares
shall again be available for issuance in connection with future awards granted
under the Plan.

     4.3 The aggregate number of Shares as to which Incentive Bonus Awards or
Other-Share-Based Awards may be granted under the Plan to any individual during
any calendar year may not, subject to adjustment as provided in Section 5,
exceed 75% of the Shares reserved for issuance for the purposes of the Plan as
of the end of such calendar year, in accordance with the provisions of this
Section 4.

5.   Equitable Adjustments. Upon the occurrence of any merger, reorganization,
consolidation, recapitalization, stock dividend or other change in corporate
structure affecting the Shares, the Committee shall make appropriate equitable
adjustments, which may include, without limitation, adjustments to: (i) the
aggregate number of Shares reserved for issuance under the Plan, and (ii) the
kind, number and purchase price of Shares subject to outstanding awards of
Restricted Shares granted under the Plan, in each case as may be determined by
the Committee, in its sole discretion. Such other substitutions or adjustments
shall be made as may be determined by the Committee, in its sole discretion. In
connection with any event described in this Section 5.1, the Committee may
provide, in its sole discretion, for the cancellation of any outstanding Other
Share-Based Awards in exchange for payment in cash or other property equal to
the Fair Market Value of the Stock covered by such Other Share-Based Awards.

6.   Eligibility. For each Performance Period, the Committee in its discretion
shall select those Eligible Recipients who shall be Participants. The selection
of an individual to be a Participant in any one Performance Period does not
entitle the individual to be a Participant in any other Performance Period.

7.   Performance Measure and Awards.

     7.1 Performance Measure and Target Incentive Bonus Awards. Prior to or
within the first 90 days of a Performance Period, the Committee shall establish
the target Incentive Bonus

                                       7

Award for each Participant and the performance objective or objectives that must
be satisfied in order for a Participant to receive an Incentive Bonus Award for
such Performance Period, all of which shall be set forth in the minutes of the
meetings of the Committee. The target Incentive Bonus Awards may be denominated
in dollars, Shares, LTIP Units or other Share-based form. Any such performance
objectives shall be based upon the absolute or comparative achievement of one or
more of the following criteria, as determined by the Committee: (i) growth in
Actual FFO, Actual FFO Per Share, Adjusted FFO, Adjusted FFO Per Share, Internal
Rate of Return, Share Value or Return on Paid in Capital; or (ii) overall Actual
FFO, Actual FFO Per Share, Adjusted FFO, Adjusted FFO Per Share, Internal Rate
of Return, Share Value or Return on Paid in Capital. The Committee shall notify
each Participant of the establishment of a target Incentive Bonus Award for such
Participant and the performance objectives that must be satisfied in order for
such Participant to be eligible to receive an Incentive Bonus Award in such
manner as it shall deem appropriate.

     7.2 Maximum Awards Allowable. Notwithstanding any provision of the Plan to
the contrary, in no event shall any Participant receive Incentive Bonus Awards,
Restricted Shares or Other Share-Based Awards under the Plan having a value in
respect of any Performance Period of the Company in excess of the greater of
$3,000,000 or the value of 300,000 Shares, as calculated in accordance with
Section 8.1 below.

     7.3 Nature of Awards. The establishment of target Incentive Bonus Awards
and performance objectives under this Plan shall be used solely as a device for
the measurement and determination of certain compensation to be paid to each
Participant as provided herein. Incentive Bonus Awards shall not constitute or
be treated as property or as a trust fund of any kind or as capital stock of the
Company, stock options or other form of equity or security until they are paid
out in the form of cash, Shares, Restricted Shares, LTIP Units, Other
Share-Based Awards or other form.

8.   Payments.

     8.1 Incentive Bonus Awards and Committee Certification. At the end of each
Performance Period, the Committee shall determine the extent to which the
performance objectives established for the Performance Period have been achieved
and determine the amount and form of the payout of all Incentive Bonus Awards.
Incentive Bonus Awards may be denominated in dollars, Shares, LTIP Units, Other
Share-Based Awards or otherwise, regardless of the denomination of the target
Incentive Bonus Awards initially established by the Committee, provided that the
Committee, in good faith, determines that the fair value of each Incentive Bonus
Award does not exceed the fair value of the corresponding target Incentive Bonus
Award at the time of payment. For purposes of determining the fair value of
Incentive Bonus Awards, the fair value of Shares, LTIP Units and Other
Share-Based Awards shall be deemed to equal (A) the number of Shares, the number
of Shares issuable upon the redemption for Shares of all of the Partnership
Common Units into which the LTIP Units are convertible (assuming that all
conditions required for all LTIP Units to be convertible into an equal number of
Partnership Common Units have occurred), and the number of Shares underlying any
such Other Share-Based Awards, respectively, multiplied by (B) the Fair Market
Value of one Share on the date the Incentive Bonus Award is paid, with
appropriate adjustment to be made for any payment required to be made to
convert, redeem or exchange any LTIP Units or Other Share-Based

                                       8

Awards for Shares. The amount and form of all Incentive Bonus Awards to be paid
to the Participants shall be set forth in the minutes of the meetings of the
Committee. No Participant shall receive any Incentive Bonus Award under this
Plan unless the Committee has certified, by resolution or other appropriate
action in writing, the amount of such Participant's Incentive Bonus Award, that
the performance objectives required to be satisfied as a condition to the grant
of such Incentive Bonus Award have in fact been satisfied and that the amount of
such Incentive Bonus Award has been determined in accordance with the terms,
conditions and limits of the Plan. The Committee will make the determinations
and certifications required by this Section 8.1 as promptly as reasonably
practicable following the end of each Performance Period, but, in all cases,
within a period of time that enables the Company to pay any Incentive Bonus
Awards due for such Performance Period within 60 days after the end of such
Performance Period. In the event of a Change in Control, the Committee will make
these determinations within a period of time that enables the Company to pay any
Incentive Bonus Awards due on or within five business days after the date of the
Change in Control.

     8.2 Negative Discretion. If the performance objectives established by the
Committee pursuant to Section 5.1 are satisfied, and if not prohibited by the
terms of any notifications to Participants or otherwise, the Committee, in its
sole discretion, may pay Incentive Bonus Awards that are less than the target
Incentive Bonus Awards that the Participants have become eligible to receive
upon the satisfaction of such performance objectives. However, notwithstanding
anything else contained in this Plan to the contrary, the Committee may not: (i)
increase the maximum amount permitted to be paid to any Participant under
Section 7.2 of this Plan or (ii) pay, or authorize the payment of, any Incentive
Bonus Award or other payment of cash, Shares, LTIP Units, Other Share-Based
Awards or payment in any other form under this Plan with respect to a
Performance Period if the performance objectives have not been satisfied with
respect to such Performance Period.

     8.3 Payments to Participants. As promptly as reasonably practicable
following the determination of the amount and form of a Participant's Incentive
Bonus Award pursuant to Section 8.1 and certification by the Committee in
accordance with Section 8.1 and subject to the provisions of Section 13, such
Participant shall be paid his or her Incentive Bonus Award in cash, Shares,
Restricted Shares, LTIP Units, Other Share-Based Awards or such other form as
the Committee has determined. To the extent an Incentive Bonus Award is payable
in Shares, Restricted Shares, LTIP Units or in an Other Share-Based Award, it
must be made from Shares reserved under the Plan and an Incentive Bonus Award
may not be paid in Shares, Restricted Shares, LTIP Units or Other Share-Based
Award if a sufficient number of Shares are not available under the Plan.
Notwithstanding the foregoing, if not prohibited by the terms of any
notifications to Participants or otherwise, the Committee reserves the right to
defer payment of Incentive Bonus Awards to Participants, subject to such terms
and provisions as the Committee may determine, including additional time-based
vesting.

     8.4 Forfeiture. A Participant whose employment with the Company terminates
for any reason prior to the completion of the Performance Period and/or prior to
fulfilling the vesting requirements for a deferred Incentive Bonus Award of such
Participant hereunder shall forfeit all rights to any Incentive Bonus Award
which might otherwise have been granted to such Participant for that Performance
Period and the unvested portion of such deferred Incentive Bonus Award. The
Committee may allocate part or all of any Incentive Bonus Award which

                                       9

might otherwise have been granted to such Participant for that Performance
Period and/or the unvested portion of any such deferred Incentive Bonus Award
forfeited prior to the completion of the Performance Period to one or more
Eligible Recipients not presently designated as Participants, including newly
hired employees. The Committee may allocate part or all of any Incentive Bonus
Award which might otherwise have been granted to such Participant for that
Performance Period and/or the unvested portion of any such deferred Incentive
Bonus Award forfeited after the completion of the Performance Period to other
Participants.

9.   Restricted Shares. Restricted Shares shall be evidenced by an award
agreement. The Committee shall determine the Participants to whom, and the time
or times at which, Restricted Shares shall be awarded; the number of Shares to
be awarded; the price, if any, to be paid by the Participant for the acquisition
of Restricted Shares; the Restricted Period (as defined in Section 9.3)
applicable to Restricted Shares; and all other conditions applicable to
Restricted Shares awards. The provisions of the awards of Restricted Shares need
not be the same with respect to each Participant.

     9.1 Purchase Price. The price per Share, if any, that a Participant must
pay for Shares purchasable under an award of Restricted Shares shall be
determined by the Committee in its sole discretion at the time of grant.

     9.2 Awards and Certificates. The prospective recipient of Restricted Shares
shall not have any rights with respect to any such Restricted Shares, unless and
until such recipient has executed an award agreement evidencing the Restricted
Shares and delivered a fully executed copy thereof to the Company, within such
period as the Committee may specify after the award date. Each Participant who
is granted an award of Restricted Shares shall be issued a stock certificate in
respect of such Restricted Shares, which certificate shall be registered in the
name of the Participant and shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to any such award; provided that
the Company may require that the stock certificates evidencing Restricted Shares
granted hereunder be held in the custody of the Company until the restrictions
thereon shall have lapsed, and that, as a condition of any award of Restricted
Shares, the Participant shall have delivered a stock power, endorsed in blank,
relating to the Shares covered by such award.

     9.3 Nontransferability. The Restricted Shares granted pursuant to this
Section 9 shall be subject to the restrictions on transferability set forth in
this Section 9.3. During such period as may be set by the Committee in the award
agreement (the "Restricted Period"), the Participant shall not be permitted to
sell, transfer, pledge, hypothecate or assign Restricted Shares awarded under
the Plan except by will or the laws of descent and distribution; provided that
the Committee may, in its sole discretion, provide for the lapse of such
restrictions in installments and may accelerate or waive such restrictions in
whole or in part based on such factors and such circumstances as the Committee
may determine in its sole discretion. The Committee may also impose such other
restrictions and conditions, including the achievement of pre-established
corporate performance goals, on Restricted Shares as it deems appropriate. Any
attempt to dispose of any Restricted Shares in contravention of any such
restrictions shall be null and void and without effect.

                                       10

     9.4 Rights as a Stockholder. Except as provided in Section 9.2 or as
otherwise provided in an award agreement, the Participant shall possess all
incidents of ownership with respect to shares of Restricted Shares during the
Restricted Period, including the right to receive dividends with respect to such
shares and to vote such Shares. Certificates for unrestricted Shares shall be
delivered to the Participant promptly after, and only after, the Restricted
Period shall expire without forfeiture in respect of such awards of Restricted
Shares except as the Committee, in its sole discretion, shall otherwise
determine.

     9.5 Termination of Employment. In the event that a Participant ceases to be
employed by or to provide services to any of the Company, any Parent or any
Subsidiary during the Restricted Period, any rights pursuant to any award of
Restricted Shares previously granted to such Participant shall be subject to
such terms and conditions as set forth in the award agreement governing such
awards. Unless otherwise provided in the award agreement, the Restricted Shares
awards granted to such Participant, to the extent that restrictions have not
lapsed or applicable conditions have not been met at the time of such cessation
of employment or provision of services, shall expire on the date of such
termination.

10.  Other Share-Based Awards.

     10.1 Nature of Other Share-Based Awards. Other forms of awards ("Other
Share-Based Awards") that may be granted under the Plan include awards that are
valued in whole or in part by reference to, or are otherwise calculated by
reference to or based on, Shares, including without limitation, (i) Units and
LTIP Units, (ii) convertible preferred stock, convertible debentures and other
convertible, exchangeable or redeemable securities or equity interests
(including Units and LTIP Units), (iii) membership interests in a Subsidiary or
operating partnership and (iv) awards valued by reference to book value, fair
value or performance parameters relative to the Company or any Subsidiary or
group of Subsidiaries. For purposes of calculating the number of Shares
underlying an Other Share-Based Award relative to the total number of Shares
reserved and available for issuance under Section 4.1, the Committee shall
establish in good faith the maximum number of Shares to which a grantee of such
Other Share-Based Award may be entitled upon fulfillment of all applicable
conditions set forth in the relevant award documentation, including vesting,
accretion factors, conversion ratios, exchange ratios and the like. If and when
any such conditions are no longer capable of being met, in whole or in part, the
number of Shares underlying such Other Share-Based Award shall be reduced
accordingly by the Committee and the related Shares shall be added back to the
Shares available for issuance under the Plan. Other Share-Based Awards may be
issued either alone or in addition to other awards granted under the Plan and
shall be evidenced by an award agreement. The Committee shall determine the
price, if any, to be paid by the Participant for the acquisition of Other
Share-Based Awards, and the restrictions and conditions applicable to Other
Share-Based Awards. Conditions may be based on continuing employment (or other
service relationship), computation of financial metrics and/or achievement of
pre-established performance goals and objectives. The Committee may require that
Other Share-Based Awards be held through a limited partnership, or similar
"look-through" entity, and the Committee may require such limited partnership or
similar entity to impose restrictions on its partners or other beneficial owners
that are not inconsistent with the provisions of this Section 10. The provisions
of the grant of Other Share-Based Awards need not be the same with respect to
each Participant.

                                       11

     10.2 Rights as Stockholder. Until such time as an Other Share-Based Award
is actually converted into, exchanged for, or paid out in Shares, a Participant
shall have no rights as a holder of stock.

     10.3 Non-Transferability. Except as otherwise provided by the Committee,
Other Share-Based Awards may not be sold, transferred, pledged, hypothecated or
assigned except by will or the laws of descent and distribution.

     10.4 Termination of Employment or Service. In the event that a Participant
ceases to be employed by or to provide services to the Company, any Parent, or
any Subsidiary, any outstanding Other Share-Based Awards previously granted to
such Participant shall be subject to such terms and conditions as set forth in
the award agreement governing such Other Share-Based Awards. Except as may
otherwise be provided by the Committee either in the award agreement, or,
subject to Section 11 below, in writing after the award agreement is issued, a
Participant's rights in all Other Share-Based Awards that have not vested shall
automatically terminate upon the Participant's termination of employment (or
cessation of service relationship) with the Company, its Parents and its
Subsidiaries for any reason.

11. Amendment or Termination of Plan. The Board may amend, alter or discontinue
the Plan in whole or in part, at any time, but no amendment, alteration, or
discontinuation that would impair the rights of a Participant under any
Incentive Bonus Award theretofore granted shall be made without such
Participant's consent. Unless the Board determines otherwise, the Board shall
obtain approval of the Company's stockholders for any amendment that would
require such approval in order to satisfy Section 162(m) of the Code, stock
exchange rules or other applicable law or regulation. The Committee may amend
the terms of any award theretofore granted, prospectively or retroactively, but,
subject to Sections 5 of the Plan, no such amendment shall impair the rights of
any Participant without his or her consent.

12. Limitation of Company's Liability. Subject to its obligation to make
payments as provided for hereunder, neither the Company nor any person acting on
behalf of the Company shall be liable for any act performed or the failure to
perform any act with respect to this Plan, except in the event that there has
been a judicial determination of willful misconduct on the part of the Company
or such person. The Company is under no obligation to fund any of the payments
required to be made hereunder in advance of their actual payment or to establish
any reserves with respect to this Plan. Any benefits which become payable
hereunder shall be paid from the general assets of the Company. No Participant,
or his or her beneficiary or beneficiaries, shall have any right, other than the
right of an unsecured general creditor, against the Company in respect of the
benefits to be paid hereunder.

13. Withholding of Tax. Anything to the contrary notwithstanding, all payments
required to be made by the Company hereunder shall be subject to the withholding
of such amounts as the Company reasonably may determine that it is required to
withhold pursuant to applicable federal, state or local law or regulation.
Withholding can be made in the form of Shares, LTIP Units or other Share-based
form.

                                       12

14. Assignability. Except as otherwise provided by law, no benefit hereunder
shall be assignable, or subject to alienation, garnishment, execution or levy of
any kind, and any attempt to cause any benefit to be so subject shall be void.

15. No Contract for Continuing Services. This Plan shall not be construed as
creating any contract for continued services between the Company and any
Participant and nothing herein contained shall give any Participant the right to
be retained as an employee of the Company.

16. Governing Law. This Plan shall be construed, administered, and enforced in
accordance with the laws of the State of New York, without giving effect to the
conflict of laws principles thereof.

17. Non-Exclusivity. Subject to Section 18, the Plan does not limit the
authority of the Company, the Committee, or any Subsidiary, to grant awards or
authorize any other compensation under any other plan or authority, including,
without limitation, awards or other compensation based on the same performance
objectives used under the Plan. In addition, Eligible Recipients not selected to
participate in the Plan may participate in other plans of the Company.

18. Section 162(m) Conditions; Bifurcation of Plan. It is the intent of the
Company that the Plan and Incentive Bonus Awards made hereunder satisfy and be
interpreted in a manner, that, in the case of Participants who are or may be
persons whose compensation is subject to Section 162(m), satisfies any
applicable requirements as performance-based compensation. Any provision,
application or interpretation of the Plan inconsistent with this intent to
satisfy the standards in Section 162(m) of the Code shall be disregarded.
Notwithstanding anything to the contrary in the Plan, the provisions of the Plan
may at any time be bifurcated by the Committee in any manner so that certain
provisions of the Plan intended (or required in order) to satisfy the applicable
requirements of Section 162(m) are applicable only to persons whose compensation
is subject to Section 162(m).

19. Securities Laws Compliance. Shares shall not be issued pursuant to the
exercise or settlement of any award granted hereunder unless the settlement of
such award and the issuance and delivery of such Shares pursuant thereto shall
comply with all relevant provisions of law, including, without limitation, the
Securities Act, the Exchange Act and the requirements of any stock exchange upon
which the Shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.

20. Certificate Legends. The Committee may require each person acquiring Shares
hereunder to represent to and agree with the Company in writing that such person
is acquiring the Shares without a view to distribution thereof. The certificates
for such Shares may include any legend which the Committee deems appropriate to
reflect any restrictions on transfer. All certificates for Shares delivered
under the Plan shall be subject to such stock-transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations,
and other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Shares are then listed, and any applicable federal or
state securities law, and the Committee may cause a legend or legends to be
placed on any such certificates to make appropriate reference to such
restrictions.

                                       13

21. Effective Date; Term. The Plan was adopted by the Board on September 14,
2004 and amended and readopted by the Board on October 19, 2004. The Plan was
approved by the stockholders of the Company on October 20, 2004. No Incentive
Bonus Award shall be granted pursuant to the Plan on or after the tenth
anniversary of the Effective Date, but Incentive Bonus Awards theretofore
granted may extend beyond that date.

                                       14

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