Document:

SHARED FACILITIES AND SERVICES AGREEMENT

                                     between

                       NORTHSTAR CAPITAL INVESTMENT CORP.

                                       and

                         NORTHSTAR REALTY FINANCE CORP.

                          Dated as of October 29, 2004

                                TABLE OF CONTENTS

                                                                                                          Page

                              ARTICLE I DEFINITIONS

   Section 1.1       Definitions.............................................................................1

                       ARTICLE II FACILITIES AND SERVICES

   Section 2.1       Facilities and Services.................................................................3
   Section 2.2       Standard of Care........................................................................3
   Section 2.3       Modification of Services................................................................3
   Section 2.4       Non-Exclusivity.........................................................................3
   Section 2.5       Cooperation.............................................................................3
   Section 2.6       Limitation On Facilities and Services...................................................4
   Section 2.7       Personnel and Subcontracting of Services................................................4

                        ARTICLE III TERM AND TERMINATION

   Section 3.1       Term....................................................................................4
   Section 3.2       Termination.............................................................................5
   Section 3.3       Effect of Termination...................................................................6

                             ARTICLE IV COMPENSATION

   Section 4.1       Facility/Service Charge.................................................................6
   Section 4.2       Invoicing and Payment...................................................................7
   Section 4.3       Taxes...................................................................................7
   Section 4.4       Disputed Amounts........................................................................7

                             ARTICLE V MISCELLANEOUS

   Section 5.1       Indemnification.........................................................................8
   Section 5.2       Notices.................................................................................8
   Section 5.3       Amendments and Waivers..................................................................9
   Section 5.4       Headings................................................................................9
   Section 5.5       Counterparts............................................................................9
   Section 5.6       Entire Agreement........................................................................9
   Section 5.7       Governing Law..........................................................................10
   Section 5.8       Resolution of Disputes.................................................................11
   Section 5.9       Waiver of Jury Trial...................................................................12
   Section 5.10      Assignment.............................................................................12
   Section 5.11      Binding Nature; Third-Party Beneficiaries..............................................12
   Section 5.12      Severability...........................................................................12
   Section 5.13      No Right of Setoff.....................................................................12
   Section 5.14      Specific Performance...................................................................12

                                       i

   Section 5.15      Construction...........................................................................12

                                       ii

                                List of Schedules

Schedule A                                  Facilities and Services

                                      iii

                    SHARED FACILITIES AND SERVICES AGREEMENT

                  This SHARED FACILITIES AND SERVICES AGREEMENT (this
"Agreement"), dated as of October 29, 2004, by and between NORTHSTAR CAPITAL
INVESTMENT CORP., a Maryland corporation ("NCIC") and NORTHSTAR REALTY FINANCE
CORP., a Maryland corporation ("NRFC").

                  WHEREAS, pursuant to the several Contribution Agreements, each
dated as of October 29, 2004 (the "Contribution Agreements"), by and between
NorthStar Realty Finance Limited Partnership, a Delaware limited partnership
("NRFLP"), of which NRFC is the sole general partner, and NorthStar Partnership,
L.P., a Delaware limited partnership ("NPLP"), of which NCIC is the sole general
partner, or certain subsidiaries or affiliates of NPLP, (1) NPLP and certain
subsidiaries or affiliates of NPLP will contribute and transfer their respective
equity interests in certain businesses conducted by NCIC and its subsidiaries
and/or affiliates (the "Contributed Businesses"), and (2) NPLP will transfer
certain assets and liabilities related to the Contributed Businesses, in each
case to NRFLP, on the Contribution Date (as defined in each of the Contribution
Agreements);

                  WHEREAS, prior to the Contribution Date, the Contributed
Businesses received various support services from NCIC and certain of its
subsidiaries and shared certain facilities with NCIC; and

                  WHEREAS, the parties have agreed to enter into this Agreement
in order for NCIC to assist NRFC and its subsidiaries from and after the
Contribution Date, by providing to NRFC and its subsidiaries certain facilities
and services and support not otherwise specified in the Contribution Agreements.

                  NOW, THEREFORE, in consideration of the foregoing and the
covenants and agreements contained in this Agreement, the parties hereto agree
as follows:

                                   ARTICLE I

                                   DEFINITIONS

                  Section 1.1 Definitions. Capitalized terms not defined in this
Article I shall have the meanings ascribed to such terms in the Contribution
Agreement. As used in this Agreement, the following terms shall have the
following meanings:

                  "Agreement" shall have the meaning ascribed to such term in
the preamble hereto.

                  "Change of Control" shall mean (i)(x) any consolidation or
merger of the Company with or into any other Person, or any other corporate
reorganization, in which the stockholders of the Company immediately prior to
such consolidation, merger or reorganization own less than 50% of the Company's
voting power or the voting power of the surviving entity or the ultimate parent
of the surviving entity immediately after such consolidation, merger or
reorganization, or (y) any transaction or series of related

transactions not included in clause (x) to which the Company is a party in which
in excess of 50% of the Company's voting power is transferred to another Person
or group for purposes of Section 13(d) under the Securities Exchange Act of
1934, as amended, or (ii) a sale, lease or other disposition of all or
substantially all of the assets of the Company to any other Person that is not a
subsidiary or affiliate of the Company. As used in this definition of Change of
Control, "Company" shall mean NCIC or NRFC, as applicable.

                  "Contribution Date" shall mean the effective date of the
contribution of the Contributed Businesses, as set forth in the Contribution
Agreements.

                  "Facility" or "Facilities" shall mean each of the facilities
described in Schedule A to be provided by or on behalf of NCIC to NRFC pursuant
to the terms and conditions of this Agreement.

                  "Facility/Service Charge" shall have the meaning ascribed to
such term in Section 4.1.

                  "Facility/Service Fee" shall have the meaning ascribed to such
term in Section 4.1.

                  "Facility/Service Description" shall mean the description of
each individual Facility or Service respectively provided in Schedule A.

                  "Governmental Entity" shall mean any court, administrative or
regulatory agency, entity, authority or commission or other governmental agency,
entity, authority, commission or instrumentality (whether local, municipal,
state, federal, national, supra-national or otherwise).

                  "Person" shall mean any individual, corporation, association,
partnership, limited liability company, joint venture, unincorporated
organization, trust, trustee, executor, administrator or other legal
representative, Governmental Entity, or other entity or organization.

                  "Service" or "Services" shall mean each of the services
described in Schedule A to be provided by or on behalf of NCIC to NRFC pursuant
to the terms and conditions of this Agreement.

                  "Standard of Care" shall have the meaning ascribed to such
term in Section 2.2.

                  "Term" shall have the meaning ascribed to such term in Section
3.1(a).

                                       2

                                   ARTICLE II

                             FACILITIES AND SERVICES

Section 2.1       Facilities and Services

                  (a) Subject to the terms of this Agreement, including, but not
limited to Section 3.1, NCIC shall provide, or shall cause a NCIC subsidiary to
provide, to NRFC or a NRFC subsidiary the Facilities and Services during the
Term in a manner and at a level of service consistent in all material respects
with the services provided to the Contributed Businesses as each such
Contributed Business existed prior to the Contribution Date.

                  (b) For each Facility or Service, the parties shall set forth
on Schedule A, among other things, a summary of the Facility or Service to be
provided and a description of the Facility or Service.

                  Section 2.2 Standard of Care. NCIC shall provide and shall
cause its subsidiaries and affiliates to provide such Facilities and Services
exercising the same degree of care, priority and diligence as it exercises in
performing the same or similar services for itself and the NCIC and NCIC
subsidiaries (collectively, the "Standard of Care"). To the extent that NCIC
employs third parties pursuant to Section 2.7 of this Agreement, NCIC shall use
its reasonable best efforts to cause such third parties to provide such
Facilities or Services exercising the Standard of Care.

                  Section 2.3 Modification of Services. Schedule A identifies
the Facilities and Services to be provided by NCIC and, subject to the mutual
agreement of the parties hereto acting reasonably, it may be amended from time
to time, to add any additional Facilities and Services or to modify or delete
Facilities or Services. During the Term, Facility or Service upgrades and
improvements which NCIC provides to its own internal organizations shall be made
available to NRFC to the extent that the parties mutually agree upon the fee for
any such upgrade or improvement. The parties hereby agree that the fee for such
upgrade or improvement shall be determined on a basis consistent with the
determination of the Facility/Service Fee for the Facilities and Services as
described on Schedule A hereto.

                  Section 2.4 Non-Exclusivity. Nothing in this Agreement shall
preclude NRFC from obtaining, in whole or in part, facilities or services of any
nature that may be obtainable from NCIC, from its own employees or from
providers other than NCIC.

                  Section 2.5 Cooperation. NRFC shall, in a timely manner, take
all such actions as may be reasonably necessary or desirable in order to enable
or assist NCIC in the provision of the Facilities and Services, including
providing necessary information and specific written authorizations and
consents, and NCIC shall be relieved of its obligations hereunder to the extent
that NRFC's failure to take any such action renders performance by NCIC of such
obligations unlawful or impracticable.

                                       3

                  Section 2.6 Limitation On Facilities and Services. NCIC shall
not be required to expand its facilities, incur new long-term capital expenses
or employ additional personnel in order to provide the Facilities and Services
to NRFC, unless mutually agreed in writing by the parties hereto. Subject to
Sections 2.1 and 2.2, nothing contained in this Agreement shall prevent or
restrict NCIC from expanding or relocating its office facilities or replacing
existing employees, equipment or service providers in its sole discretion.

                  Section 2.7 Personnel and Subcontracting of Services. In
providing the Facilities and Services, NCIC as it deems necessary or appropriate
in its sole discretion, may (a) use the personnel of NCIC or its affiliates and
(b) employ on a short or long-term basis the services of third parties to the
extent such third party services are reasonably necessary for the efficient
performance of any of such Services or provision of any Facilities. NRFC may
retain at its own expense its own consultants and other professional advisers.

                                  ARTICLE III

                              TERM AND TERMINATION

Section 3.1       Term

                  (a) This Agreement shall become effective on the Contribution
Date and shall remain in force for a one-year period, such period to be
continuously renewable on each anniversary of the Contribution Date (the
"Renewal Date") for an additional one-year period upon the agreement of NRFC, by
a majority vote of its independent directors, and NCIC (the "Term"), unless
terminated earlier pursuant to Section 3.2 below.

                  (b) NRFC shall not have any obligation to continue to use any
of the Facilities or Services and may delete any Facility or Service from
Schedule A that NCIC is providing to NRFC by giving NCIC ninety (90) days notice
thereof. In the event any Facility or Service is terminated by NRFC, Schedule A
shall be amended to reflect (i) the deletion of the Facility or Service and (ii)
a reduction to the Facility/Service Fee corresponding to the portion of the fee
relating to the deleted Facility or Service.

                  (c) Subject to the provisions of this Section 3.1(c), NCIC
shall not have any obligation to continue to provide any of the Facilities or
Services if NCIC is discontinuing permanently the provision of such Facility or
Service to its own internal organizations. On and after the first anniversary of
this Agreement, NCIC may delete any Service from Schedule A that NCIC is
providing to NRFC by giving NCIC ninety (90) days notice thereof. On and after
the first anniversary of this Agreement, NCIC may delete any Facility from
Schedule A that NCIC is providing to NRFC by giving NCIC one hundred eighty
(180) days notice thereof. In the event any Facility or Service is terminated by
NCIC, Schedule A shall be amended to reflect (i) the deletion of the Facility or
Service and (ii) a reduction to the Facility/Service Fee corresponding to the
portion of the fee relating to the deleted Facility or Service.

                                       4

Section 3.2       Termination.

                  (a) Termination Without Cause. The obligation of NCIC to
provide or cause to be provided a particular Facility or Service hereunder shall
terminate on the earliest to occur of:

                      (i)   the expiration of the Term;

                      (ii) pursuant to Section 3.1(c) hereof the date ninety
                  (90) or one hundred eighty (180) days following written notice
                  from NCIC that NCIC is discontinuing permanently the provision
                  of a Service or Facility, respectively, to its own internal
                  organizations;

                      (iii) the date ninety (90) days after NCIC receives
                  written notice that NRFC no longer desires that a Facility or
                  Service be provided;

                  (b) Termination For Cause. If either party shall fail to
adequately perform in any material respect any of its material obligations under
this Agreement (other than a payment default) (the "Defaulting Party"), the
other party entitled to the benefit of such performance (the "Non-Defaulting
Party") may give thirty (30) days' written notice to the Defaulting Party
specifying the nature of such failure or default and stating that the
Non-Defaulting Party intends to terminate this Agreement, either in its entirety
or partially as set forth in Section 3.2(c), if such failure or default is not
cured within ninety (90) days of such written notice. If any failure or default
so specified is not cured within such 90-day period, the Non-Defaulting Party
may elect to immediately terminate this Agreement in whole or in part with
respect to the Defaulting Party; provided, however, that if the failure or
default relates to a dispute contested in good faith by the Defaulting Party,
the Non-Defaulting Party may not terminate this Agreement pending the resolution
of such dispute in accordance with Section 5.8. Such termination shall be
effective upon giving a written notice of termination from the Non-Defaulting
Party to the Defaulting Party and shall be without prejudice to any other remedy
which may be available to the Non-Defaulting Party against the Defaulting Party.

                  (c) Partial Termination. Under circumstances specified in
Section 3.2(b) entitling the Non-Defaulting Party to terminate this Agreement in
its entirety, if the default relates to the provision of a Facility or Service,
NRFC may in its sole discretion terminate this Agreement as to the provision of
that Facility or Service or all Facilities and Services by NCIC upon the same
notice provisions as specified in Section 3.2(b), but continue this Agreement in
all other respects.

                  (d) Termination Upon Change of Control. If either NCIC or NRFC
experiences a Change of Control (the "Change of Control Party") at any time
after one year following the date hereof, the Change of Control Party or other
party (the "Notifying Party") may give one hundred eighty (180) days' written
notice to the other party that it intends to terminate this Agreement in its
entirety. Such termination shall be effective on

                                       5

the date that is one hundred eighty (180) days' after the Notifying Party gives
such written notice of termination to the other party.

                  Section 3.3 Effect of Termination.

                  (a) NRFC specifically agrees and acknowledges that all
obligations of NCIC to provide each Facility and Service for which NCIC is
responsible hereunder shall immediately cease upon the termination of this
Agreement. Upon the cessation of NCIC's obligation to provide any Facilities or
Services, NRFC shall immediately cease using, directly or indirectly, such
Facility or Service (including any and all software of NCIC or third party
software provided through NCIC, telecommunications services or equipment, or
computer systems or equipment).

                  (b) Upon termination of a Facility or Service with respect to
which NCIC holds books, records or files, including current or archived copies
of computer files, owned by NRFC and used by NCIC in connection with the
provision of a Facility or Service to NRFC, NCIC will return all of such books,
records or files as soon as reasonably practicable as well as comply with any
reasonable request for cooperation made by NRFC for NCIC to assist it or a new
contractor in accessing, understanding and utilizing such books, records or
files; provided, however, that NCIC may make a copy, at its expense, of such
books, records or files for archival purposes only.

                  (c) Without prejudice to the survival of the other agreements
of the parties, the following obligations shall survive the termination of this
Agreement: (a) the obligations of each party under Section 3.3(b) and Articles 4
and 5, and (b) NCIC's right to receive the Facility/Service Charge for the
Facilities and Services provided by it hereunder pursuant to Section 4.1 below
incurred prior to the effective date of termination.

                                   ARTICLE IV

                                  COMPENSATION

                  Section 4.1 Facility/Service Charge. As consideration for the
provision of the Facilities and Services, NRFC shall pay NCIC the fee for the
Facilities and Services as set forth on Schedule A (the "Facility/Service Fee"),
plus any additional charges as described below (such fee and any additional
charges being collectively referred to in this Agreement as the
"Facility/Service Charge"). In addition to the Facility/Service Fee, NCIC shall
also be entitled to reimbursement from NRFC upon receipt of reasonable
supporting documentation for all out-of-pocket expenses incurred in connection
with NCIC's provision of the Facilities and Services which are not included as
part of the Facility/Service Fee. In the event the Facility or Service is
terminated, the Facility/Service Charge will be prorated for the number of days
the Facility or Service provided in the calendar month (based on a thirty day
month) in which the Facility or Service is terminated.

                                       6

                  Section 4.2 Invoicing and Payment.

                  (a) Invoices. On the first business day of each month during
the Term, NCIC, together with its affiliates and/or subsidiaries providing
Facilities and Services, will submit one invoice to NRFC for all Facilities and
Services to be provided to NRFC and NRFC's subsidiaries by NCIC during such
month (or, in the case of additional reimbursable expenses, for the immediately
preceding month or the preceding month/s when such expenses were incurred). Each
invoice shall include, (i) a summary list of the previously agreed upon
Facilities and Services for which one-twelfth (1/12) of the Facility/Service Fee
is due and payable (the "Fee Monthly Installment") with respect to the preceding
monthly period, (ii) together with documentation supporting each of the invoiced
amounts, if any, that are not covered by the Facility/Service Fee. The total
amount set forth on such summary list, namely the Fee Monthly Installment, and
the additional invoiced amounts shall equal the invoice total, and shall be
provided under separate cover apart from the invoice. All invoices shall be sent
to the attention of NRFC at the address set forth in Section 5.2 or to such
other address as NRFC shall have specified by notice in writing to NCIC.

                  (b) Payment. Payment of all invoices in respect of each
Facility or Service shall be made by check or electronic funds transmission in
U.S. Dollars, without any offset or deduction of any nature whatsoever, within
thirty (30) days of the invoice date. Invoices unpaid as of such date shall
accrue interest at an annual rate of 12%. All payments shall be made to NCIC at
the account designated by NCIC or its affiliate or subsidiary.

                  Section 4.3 Taxes. To the extent not included directly in the
Facility/Service Charge, NRFC shall pay to NCIC the amount of any taxes or
charges set forth in (a) through (c) of this Section 4.3 imposed now or in the
future by any Governmental Entity including any increase in any such tax or
charge imposed on NCIC after the Contribution Date and during the Term of this
Agreement.

                  (a) Any applicable sales, use, gross receipts, value added or
similar tax that is imposed as a result of, or measured by, any Facility
provided or Service rendered hereunder unless covered by an exemption
certificate.

                  (b) Any applicable real or personal property taxes, including
any special assessments, and any impositions imposed on NCIC in lieu of or in
substitution for such taxes on any property used in connection with any Facility
provided or Service rendered hereunder.

                  (c) Any other governmental taxes, duties and/or charges of any
kind, excluding any income or franchise taxes imposed on NCIC, which NCIC is
required to pay with respect to any Facility provided or Service rendered
hereunder.

                  Section 4.4 Disputed Amounts. In the event NRFC disputes the
accuracy of any invoice, NRFC shall pay the undisputed portion of such invoice
and the

                                       7

parties shall within five (5) business days meet and seek to resolve the
disputed amount of the invoice. If NRFC fails to pay any undisputed amount owed
under this Agreement, NRFC shall correct such failure promptly following notice
of the failure, and shall pay NCIC interest on the amount paid late at an annual
interest rate equal to 12% prorated for the number of days such overdue amounts
are outstanding.

                                   ARTICLE V

                                  MISCELLANEOUS

                  Section 5.1 Indemnification

                  (a) Indemnification by NCIC. NCIC shall, to the full extent
lawful, reimburse, indemnify and hold NRFC, its officers, directors,
shareholders and employees harmless for and from any and all expenses, losses,
damages, liabilities, demands, charges and claims of any nature whatsoever
(including reasonable attorneys' fees and disbursements), in respect of or
arising out of NCIC's or any of its shareholders', directors', officers',
employees', subcontractors' or other third party's bad faith, willful misconduct
or gross negligence resulting in a material act, omission or other breach
(beyond any applicable cure period) of NCIC's obligations under this Agreement
and not resulting from NRFC's bad faith, willful misconduct, gross negligence or
material breach (beyond any applicable cure period) of NRFC's duties under this
Agreement.

                  (b) Indemnification by NRFC. NRFC shall, to the full extent
lawful, reimburse, indemnify and hold each of NCIC, its shareholders, directors,
officers and employees and each other Person, if any, controlling NCIC harmless
for and from any and all expenses, losses, damages, liabilities, demands,
charges and claims of any nature whatsoever (including reasonable attorneys'
fees and disbursements) in respect of or arising out of NCIC's performance of
the services for NRFC provided hereunder provided that such loss was not caused
by NCIC's or any of its directors', officers' or employees' bad faith, willful
misconduct, gross negligence or material breach (beyond any applicable cure
period) of its duties under this Agreement.

                  Section 5.2 Notices.

                  All notices, requests and other communications to any party
hereunder shall be in writing (including facsimile transmission) and shall be
given (i) by personal delivery to the appropriate address as set forth below (or
at such other address for the party as shall have been previously specified in
writing to the other party), (ii) by reliable overnight courier service (with
confirmation) to the appropriate address as set forth below (or at such other
address for the party as shall have been previously specified in writing to the
other party), or (iii) by facsimile transmission (with confirmation) to the
appropriate facsimile number set forth below (or at such other facsimile number
for the party as shall have been previously specified in writing to the other
party) with follow-up copy by reliable overnight courier service the next
Business Day:

         If to NRFC, to:

                                       8

                  NorthStar Realty Finance Corp.
                  Attention:  Mr. David T. Hamamoto
                  Telephone: (212) 319-2402
                  Facsimile:  (212) 319-4557

         If to NCIC, to:

                  NorthStar Capital Investment Corp.
                  Attention:  Mr. W. Edward Scheetz
                  Telephone: (212) 319-2414
                  Facsimile:  (212) 319-4557

                  All such notices, requests and other communications shall be
deemed received on the date of receipt by the recipient thereof if received
prior to 5 p.m. (New York City time) and such day is a Business Day in the place
of receipt. Otherwise, any such notice, request or communication shall be deemed
not to have been received until the next succeeding Business Day in the place of
receipt.

                  Section 5.3 Amendments and Waivers. This Agreement may not be
modified or amended except by an instrument or instruments in writing signed by
an authorized officer of each party. Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the party entitled to
the benefits thereof only by a written instrument signed by an authorized
officer of the party granting such waiver, but such waiver or failure to insist
upon strict compliance with such obligation, covenant, agreement or condition
shall not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure.

                  Section 5.4 Headings. The table of contents and the article,
section, paragraph and other headings contained in this Agreement are inserted
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.

                  Section 5.5 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an original, but
all of which together shall constitute one and the same agreement.

                  Section 5.6 Entire Agreement. This Agreement and the Schedules
hereto constitute the entire agreement between the parties hereto with respect
to the subject matter hereof, and supersede and cancel all prior agreements,
negotiations, correspondence, undertakings, understandings and communications of
the parties, oral and written, with respect to the subject matter hereof.

                  Section 5.7 Governing Law. THIS AGREEMENT, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,

                                       9

WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OR CHOICE OF LAWS.

                  Section 5.8 Resolution of Disputes. All disputes arising out
of or relating to this Agreement or the breach, termination or validity thereof
or the parties' performance hereunder ("Dispute") shall be resolved as provided
by this Section 5.7.

                  (a) Negotiation of Disputes.

                      (i) Any party shall give the other party written notice of
               any Dispute. The parties shall attempt to resolve such Dispute
               promptly by negotiation between executive officers who have
               authority to settle the Dispute and who are at a higher level of
               management than the persons with direct responsibilities for
               administration of this Agreement.

                      (ii) Within 15 days after delivery of the notice, the
               party receiving the notice shall submit to the other a written
               response. The notice and the response shall include: (A) a
               statement of each party's position and a summary of arguments
               supporting that position and (B) the name and title of the
               executive officer who will represent that party and of any other
               person who will accompany the executive officer during the
               negotiations. Within 30 days after delivery of the disputing
               party's notice, the executive officers of both parties shall meet
               at a mutually acceptable time and place, and thereafter as often
               as they reasonably deem necessary, to attempt to resolve the
               Dispute.

                  (b) Arbitration.

                      (i) If the Dispute has not been resolved by executive
               officer negotiation within 45 days of the disputing party's
               notice requesting negotiation, or if the parties fail to meet
               within 30 days from delivery of said notice, such Dispute shall
               on the demand of any party, be finally settled under the Rules of
               Arbitration of the Center for Public Resources ("CPR") then in
               effect, except as modified herein or by mutual agreement of the
               parties.

                      (ii) The arbitration shall be held in New York, New York.
               The arbitration proceedings shall be conducted, and the award
               shall be rendered, in the English language.

                      (iii) There shall be three arbitrators selected pursuant
               to the CPR rules from the CPR national and regional panels. All
               arbitrators shall be neutral, disinterested, independent and
               impartial.

                      (iv) In rendering an award, the arbitral tribunal shall be
               required to follow the substantive law of the jurisdiction
               designated by the parties herein. This arbitration agreement and
               any award rendered thereunder shall be governed by the United
               Nations Convention on the

                                       10

               Recognition and Enforcement of Foreign Arbitral Awards, 1958, and
               the Federal Arbitration Act, 9 USC ss. 1 et seq. The arbitral
               tribunal shall not be empowered to award damages in excess of
               compensatory damages except in the case of fraud, and each party
               hereby irrevocably waives any right to recover punitive,
               exemplary or similar damages with respect to any dispute except
               in the case of fraud.

                      (v) The award shall be final and binding upon the parties
               and shall be the sole and exclusive remedy between the parties
               with regard to any claim or counterclaim submitted to the
               arbitral tribunal. Judgment upon any award may be entered in any
               court having jurisdiction thereof.

                      (vi) By agreeing to arbitration, the parties do not intend
               to deprive any court of its jurisdiction to issue a pre-arbitral
               injunction, pre-arbitral attachment or other order in aid of
               arbitration proceedings and the enforcement of any award. Without
               prejudice to such provisional remedies as may be available under
               the jurisdiction of a national court, the arbitral tribunal shall
               have full authority to grant provisional remedies or to order the
               parties to request that a court modify or vacate any temporary or
               preliminary relief issued by a such court, and to award damages
               for the failure of any party to respect the arbitral tribunal's
               orders to that effect. The parties hereby unconditionally and
               irrevocably submit to the non-exclusive jurisdiction of the state
               or federal courts located in New York, New York for the purpose
               of any preliminary relief in aid of arbitration, or for
               enforcement of any award, and hereby waive any objection to such
               jurisdiction including without limitation objections by reason of
               lack of personal jurisdiction, improper venue, or inconvenient
               forum.

                  (c) Notwithstanding the foregoing, any Dispute regarding the
following is not required to be negotiated or arbitrated prior to seeking relief
from a court of competent jurisdiction: breach of any obligation of
confidentiality, infringement, misappropriation or misuse of any intellectual
property right. The parties acknowledge that their remedies at law for such a
breach or threatened breach would be inadequate and, in recognition of this
fact, upon such breach or threatened breach, either party, without posting any
bond, and in addition to all other remedies which may be available, shall be
entitled to immediately seek or obtain equitable relief in the form of specific
performance, a temporary restraining order, a temporary or permanent injunction
or any other equitable remedy which may then be available.

                  Section 5.9 Waiver of Jury Trial. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

                                       11

                  Section 5.10 Assignment. This Agreement may not be assigned by
either party without the written consent of the other party. No such assignment
shall relieve either party of any of its rights and obligations hereunder.

                  Section 5.11 Binding Nature; Third-Party Beneficiaries. This
Agreement shall be binding upon and inure solely to the benefit of the parties
hereto and their respective successors and permitted assigns. Nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
Person or Persons any rights, benefits or remedies of any nature whatsoever
under or by reason of this Agreement.

                  Section 5.12 Severability. This Agreement shall be deemed
severable; the invalidity or unenforceability of any term or provision of this
Agreement shall not affect the validity or enforceability of this Agreement or
of any other term hereof, which shall remain in full force and effect, for so
long as the economic or legal substance of the transactions contemplated by this
Agreement is not affected in any manner materially adverse to any party. If it
is ever held that any restriction hereunder is too broad to permit enforcement
of such restriction to its fullest extent, each party agrees that such
restriction may be enforced to the maximum extent permitted by law, and each
party hereby consents and agrees that such scope may be judicially modified
accordingly in any proceeding brought to enforce such restriction.

                  Section 5.13 No Right of Setoff. Neither party hereto nor any
affiliate thereof may deduct from, set off, holdback or otherwise reduce in any
manner whatsoever against any amounts such Persons may owe to the other party
hereto or any of it affiliates any amounts owed by such other party or its
affiliates to the first party or its affiliates.

                  Section 5.14 Specific Performance. The parties hereto agree
that irreparable damage would occur in the event that any provision of this
Agreement was not performed in accordance with the terms hereof and that the
parties shall be entitled to specific performance of the terms hereof, in
addition to any other remedy at law or equity.

                  Section 5.15 Construction.

                  (a) For the purposes hereof, (i) words in the singular shall
be held to include the plural and vice versa and words of one gender shall be
held to include the other genders as the context requires, (ii) the words
"hereof," "herein," and "herewith" and words of similar import shall, unless
otherwise stated, be construed to refer to this Agreement as a whole (including
the Schedules hereto and the Exhibits hereto) and not to any particular
provision of this Agreement, and article, section, paragraph, exhibit and
schedule references are to the articles, sections, paragraphs, and exhibits and
schedules of this Agreement unless otherwise specified, (iii) the words
"including" and words of similar import when used in this Agreement shall mean
"including, without limitation," unless otherwise specified, (iv) the word "or"
shall not be exclusive and (v) NRFC and NCIC will be referred to herein
individually as a "party" and collectively as "parties" (except where the
context otherwise requires).

                                       12

                  (b) The parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement.

                  (c) Any reference to any federal, state, local or non-U.S.
statute or law shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context otherwise requires.

                                       13

                  IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the day and year first above written.

                               NORTHSTAR CAPITAL INVESTMENT CORP.

                               By: /s/ Richard J. McCready
                                   --------------------------------
                                   Name: Richard J. McCready
                                   Title: Chief Operating Officer and Secretary

                               NORTHSTAR REALTY FINANCE CORP.

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

                                   SCHEDULE A

As of October 29, 2004

FACILITIES & SERVICES

    Facility or Service              Summary Description of Facility or Service
--------------------------------------------------------------------------------
Office Space at Headquarters         Four (4) fully furnished offices;
of NCIC (527 Madison Avenue,         Four (4) additional desks (all equipped
16th Floor, New York, NY)            with personal computers and
                                     telecommunications equipment); and Access
                                     to file space, printers, copiers, kitchen &
                                     conference room facilities.
--------------------------------------------------------------------------------
Receptionist and Secretarial Services
Payroll Administration Services
Accounting Support and Treasury Functions
Tax Planning and REIT Compliance Advisory Services

FACILITY/SERVICE FEE

Amount: $1,570,000 for the Facilities and Services to be provided during the one
year period commencing on the date hereof.

Amendment: The Facility/Service Fee set forth above may be amended from time to
time upon the deletion of any Facilities or Services pursuant to Section 3.1 of
this Agreement.

Calculation: The total Facility/Service Fee is calculated as follows: (1) NCIC's
total general and administrative costs for the most recently completed fiscal
year, minus (a) the salaries, bonuses, other compensation, employee benefits and
travel, entertainment and business meal expenses of (i) all full-time employees
of NCIC and its subsidiaries and (ii) the cash compensation paid or payable to
all co-employees of NRFC and NCIC pursuant to an employment agreement between
such co-employee and NRFC (the "NCIC Employee Expenses"), and (b) all such
general and administrative costs exclusively attributable to NCIC's businesses
and assets and not any of its subsidiaries, including, but not limited to NCIC's
costs for third party legal, auditing and tax consulting services, regulatory
filings, printing fees, meetings of NCIC's board of directors and shareholders,
director's compensation and reimbursable expenses and insurance policies for
directors, officers and employees, plus (2) the portion of NCIC Employee
Expenses relating to NCIC employees who are responsible for providing the
Facilities and Services under this Agreement, multiplied by 33%, which
represents an approximation of the net asset value, as estimated by NCIC, as of
the most recently completed fiscal year of the Contributed Assets (as defined in
each of the Contribution Agreements) as a percentage of the value of NCIC's
total net assets.EXECUTIVE EMPLOYMENT AGREEMENT
                         ------------------------------

     This Executive Employment Agreement (the "Agreement") by and between David
T. Hamamoto ("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 $400,000 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"), taking into account such
factors as the Compensation Committee deems appropriate, including but not
limited to the salaries of chief executive officers of comparable companies.

        (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 maximum award amounts determined by the Board
(the "Annual Cash

Bonus"). The initial target amount of the Annual Cash Bonus shall be 175% of
Executive's Base Salary, but the actual Annual Cash Bonus amount shall be
determined by the Board, in its discretion, 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 a President & Chief Executive Officer of the Company. Executive's
duties shall include, without limitation, managing the overall business affairs
of the Company and its senior executive team, formulating and implementing the
strategic plan and investment program of the Company, and managing and assisting
in the Company's capital raising efforts together with such other reasonable
assignments as may be assigned to him from time to time by the Board. 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 Board. Executive agrees to devote not less than a majority 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. Notwithstanding the above, nothing in this Agreement shall preclude
Executive from devoting a portion of Executive's business time, attention and
energies to the performance of Executive's duties as co-CEO of NorthStar Capital
Investment Corp and other business endeavors. 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.

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 the Chief Executive Officer of the Company or
            the Executive is directed to directly report to other than 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;

            (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);

                                       4

            (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 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.

                                       5

        (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.

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

                                       6

            (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.

        (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").

                                       7

     (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)), net of the maximum
            reduction in federal income taxes which could be obtained from
            deduction of such state and local taxes. If there

                                       8

            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.

         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

                                       9

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.

        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:

                                       10

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

                 If to Executive:          David T. Hamamoto
                                           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.

                                     /s/ David  T. Hamamoto
                                     --------------------------------
                                     David T. Hamamoto

                                     NORTHSTAR REALTY FINANCE CORP.

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

                                       12

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