NORTHSTAR REALTY FINANCE CORP.
                         ------------------------------

                      ARTICLES OF AMENDMENT AND RESTATEMENT

     FIRST: NorthStar Realty Finance Corp., a Maryland corporation (the
"Corporation"), desires to amend and restate its charter as currently in effect
and as hereinafter amended.

     SECOND: The following provisions are all the provisions of the charter
currently in effect and as hereinafter amended:

                                   ARTICLE I
                                  INCORPORATOR

     Michael D. Schiffer, whose address is c/o Venable LLP, Suite 1800, Two
Hopkins Plaza, Baltimore, Maryland 21201, being at least 18 years of age, formed
a corporation under the general laws of the State of Maryland on October 7,
2003.

                                   ARTICLE II
                                      NAME

     The name of the corporation (the "Corporation") is:

                         NorthStar Realty Finance Corp.

                                   ARTICLE III
                                     PURPOSE

     The purposes for which the Corporation is formed are to engage in any
lawful act or activity (including, without limitation or obligation, engaging in
business as a real estate investment trust under the Internal Revenue Code of
1986, as amended, or any successor statute (the "Code")) for which corporations
may be organized under the general laws of the State of Maryland as now or
hereafter in force. For purposes of these Articles, "REIT" means a real estate
investment trust under Sections 856 through 860 of the Code.




                                   ARTICLE IV
                  PRINCIPAL OFFICE IN STATE AND RESIDENT AGENT

     The address of the principal office of the Corporation in the State of
Maryland is c/o The Corporation Trust Incorporated, 300 East Lombard Street,
Baltimore, Maryland 21202. The name of the resident agent of the Corporation in
the State of Maryland is The Corporation Trust Incorporated, whose post address
is 300 East Lombard Street, Baltimore, Maryland 21202. The resident agent is a
Maryland corporation.

                                    ARTICLE V
                        PROVISIONS FOR DEFINING, LIMITING
                      AND REGULATING CERTAIN POWERS OF THE
                CORPORATION AND OF THE STOCKHOLDERS AND DIRECTORS

     Section 5.1 Number of Directors. The business and affairs of the
Corporation shall be managed under the direction of the Board of Directors. The
number of directors of the Corporation currently is seven, which number may be
increased or decreased only by the Board of Directors pursuant to the Bylaws,
but shall never be less than the minimum number required by the Maryland General
Corporation Law (the "MGCL"). The names of the current directors who shall serve
until the first annual meeting of stockholders and until their successors are
duly elected and qualify are:

                             David T. Hamamoto
                             W. Edward Scheetz
                             Frank V. Sica
                             William V. Adamski
                             Preston Butcher
                             Judith A. Hannaway
                             Wesley D. Minami

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The directors of the Corporation may increase the number of directors and may
fill any vacancy, whether resulting from an increase in the number of directors
or otherwise, on the Board of Directors occurring before the first annual
meeting of stockholders in the manner provided in the Bylaws.

     The Corporation elects, at such time as it becomes eligible to make the
election provided for under Section 3-802(b) of the MGCL, that, except as may be
provided by the Board of Directors in setting the terms of any class or series,
any and all vacancies on the Board of Directors may be filled only by the
affirmative vote of a majority of the remaining directors in office, even if the
remaining directors do not constitute a quorum, and any director elected to fill
a vacancy shall serve for the remainder of the full term of the directorship in
which such vacancy occurred. The Corporation may not elect to be subject to
Section 3-803 of the MGCL.

     Section 5.2 Extraordinary Actions. Except as specifically provided in
Section 5.8 (relating to removal of directors) and in Article VIII,
notwithstanding any provision of law permitting or requiring any action to be
taken or approved by the affirmative vote of the holders of shares entitled to
cast a greater number of votes, any such action shall be effective and valid if
declared advisable by the Board of Directors and taken or approved by the
affirmative vote of holders of shares entitled to cast a majority of all the
votes entitled to be cast on the matter.

     Section 5.3 Authorization by Board of Stock Issuance. The Board of
Directors may authorize the issuance from time to time of shares of stock of the
Corporation of any class or series, whether now or hereafter authorized, or
securities or rights convertible into shares of its stock of any class or
series, whether now or hereafter authorized, for such consideration as the Board
of Directors may deem advisable (or without consideration in the case of a stock
split or stock dividend), subject to such restrictions or limitations, if any,
as may be set forth in the charter or the Bylaws.



                                      -3-


     Section 5.4 Preemptive Rights and Appraisal Rights. Except as may be
provided by the Board of Directors in setting the terms of classified or
reclassified shares of stock pursuant to Section 6.4 or as may otherwise be
provided by contract, no holder of shares of stock of the Corporation shall, as
such holder, have any preemptive right to purchase or subscribe for any
additional shares of stock of the Corporation or any other security of the
Corporation which it may issue or sell. Holders of shares of stock shall not be
entitled to exercise any rights of an objecting stockholder provided for under
Title 3, Subtitle 2 of the Maryland General Corporation Law or any successor
statute unless the Board of Directors, upon the affirmative vote of a majority
of the entire Board of Directors, shall determine that such rights apply, with
respect to all or any classes or series of stock, to a particular transaction or
all transactions occurring after the date of such determination in connection
with which holders of such shares would otherwise be entitled to exercise such
rights.

     Section 5.5 Indemnification. The Corporation shall have the power, to the
maximum extent permitted by Maryland law in effect from time to time, to
obligate itself to indemnify, and to pay or reimburse reasonable expenses in
advance of final disposition of a proceeding to, (a) any individual who is a
present or former director or officer of the Corporation or (b) any individual
who, while a director of the Corporation and at the request of the Corporation,
serves or has served as a director, officer, partner or trustee of another
corporation, real estate investment trust, partnership, joint venture, trust,
employee benefit plan or any other enterprise from and against any claim or
liability to which such person may become subject or which such person may incur
by reason of his status as a present or former director or officer of the
Corporation. The Corporation shall have the power, with the approval of the
Board of Directors, to provide such indemnification and advancement of expenses
to a person who served a predecessor of the Corporation in any of the capacities
described in (a) or (b) above and to any employee or agent of the Corporation or
a predecessor of the Corporation.

     Section 5.6 Determinations by Board. The determination as to any of the
following matters, made in good faith by or pursuant to the direction of the
Board of Directors consistent with the charter and in the absence of actual
receipt of an improper benefit in money, property or services or active and
deliberate dishonesty established by a court, shall be final and conclusive and
shall be binding


                                      -4-


upon the Corporation and every holder of shares of its stock: the amount of the
net income of the Corporation for any period and the amount of assets at any
time legally available for the payment of dividends, redemption of its stock or
the payment of other distributions on its stock; the amount of paid-in surplus,
net assets, other surplus, annual or other net profit, net assets in excess of
capital, undivided profits or excess of profits over losses on sales of assets;
the amount, purpose, time of creation, increase or decrease, alteration or
cancellation of any reserves or charges and the propriety thereof (whether or
not any obligation or liability for which such reserves or charges shall have
been created shall have been paid or discharged); the fair value, or any sale,
bid or asked price to be applied in determining the fair value, of any asset
owned or held by the Corporation; any matter relating to the acquisition,
holding and disposition of any assets by the Corporation; or any other matter
relating to the business and affairs of the Corporation.

     Section 5.7 REIT Qualification. If the Corporation elects to qualify for
federal income tax treatment as a REIT, the Board of Directors shall use its
reasonable best efforts to take such actions as are necessary or appropriate to
preserve the status of the Corporation as a REIT; however, if the Board of
Directors determines that it is no longer in the best interests of the
Corporation to continue to be qualified as a REIT, the Board of Directors may
revoke or otherwise terminate the Corporation's REIT election pursuant to
Section 856(g) of the Code. The Board of Directors also may determine that
compliance with any restriction or limitation on stock ownership and transfers
set forth in Article VII is no longer required for REIT qualification.

     Section 5.8 Removal of Directors. Subject to the rights of holders of one
or more classes or series of Preferred Stock to elect or remove one or more
directors, any director, or the entire Board of Directors, may be removed from
office at any time, but only by the affirmative vote of at least two thirds of
the votes entitled to be cast generally in the election of directors.

                                   ARTICLE VI
                                      STOCK

     Section 6.1 Authorized Shares. The Corporation has authority to issue
750,000,000 shares of stock, consisting of 500,000,000 shares of Common Stock,
$.01 par value per share ("Common Stock"), 250,000,000 shares of Preferred
Stock, $.01 par value per share


                                      -5-


("Preferred Stock"). The aggregate par value of all authorized shares of stock
having par value is $7,500,000. If shares of one class of stock are classified
or reclassified into shares of another class of stock pursuant to this Article
VI, the number of authorized shares of the former class shall be automatically
decreased and the number of shares of the latter class shall be automatically
increased, in each case by the number of shares so classified or reclassified,
so that the aggregate number of shares of stock of all classes that the
Corporation has authority to issue shall not be more than the total number of
shares of stock set forth in the first sentence of this paragraph. The Board of
Directors, without any action by the stockholders of the Corporation, may amend
the charter from time to time to increase or decrease the aggregate number of
shares of stock or the number of shares of stock of any class or series that the
Corporation has authority to issue.

     Section 6.2 Common Stock. Subject to the provisions of Article VII, each
share of Common Stock shall entitle the holder thereof to one vote. The Board of
Directors may reclassify any unissued shares of Common Stock from time to time
in one or more classes or series of stock.

     Section 6.3 Preferred Stock. The Board of Directors may classify any
unissued shares of Preferred Stock and reclassify any previously classified but
unissued shares of Preferred Stock of any series from time to time, in one or
more classes or series of stock.

     Section 6.4 Classified or Reclassified Shares. Prior to issuance of
classified or reclassified shares of any class or series, the Board of Directors
by resolution shall: (a) designate that class or series to distinguish it from
all other classes and series of stock of the Corporation; (b) specify the number
of shares to be included in the class or series; (c) set or change, subject to
the provisions of Article VII and subject to the express terms of any class or
series of stock of the Corporation outstanding at the time, the preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends or other distributions, qualifications and terms and conditions of
redemption for each class or series; and (d) cause the Corporation to file
articles supplementary with the State Department of Assessments and Taxation of
Maryland ("SDAT"). Any of the terms of any class or series of stock set or
changed pursuant to clause (c) of this Section 6.4 may be made dependent upon



                                      -6-


facts or events ascertainable outside the charter (including determinations by
the Board of Directors or other facts or events within the control of the
Corporation) and may vary among holders thereof, provided that the manner in
which such facts, events or variations shall operate upon the terms of such
class or series of stock is clearly and expressly set forth in the articles
supplementary filed with the SDAT.

     Section 6.5 Charter and Bylaws. All persons who shall acquire stock in the
Corporation shall acquire the same subject to the provisions of the charter and
the Bylaws.

                                   ARTICLE VII
                 RESTRICTION ON TRANSFER AND OWNERSHIP OF SHARES

     Section 7.1 Definitions. For the purpose of this Article VII, the following
terms shall have the following meanings:

     Aggregate Stock Ownership Limit. The term "Aggregate Stock Ownership Limit"
shall mean not more than 9.8 percent in value of the aggregate of the
outstanding shares of Capital Stock. The value of the outstanding shares of
Capital Stock shall be determined by the Board of Directors of the Corporation
in good faith, which determination shall be conclusive for all purposes hereof.

     Beneficial Ownership. The term "Beneficial Ownership" shall mean ownership
of Capital Stock by a Person, whether the interest in the shares of Capital
Stock is held directly or indirectly (including by a nominee), and shall include
interests that would be treated as owned through the application of Section 544
of the Code, as modified by Section 856(h)(1)(B) of the Code. The terms
"Beneficial Owner," "Beneficially Owns" and "Beneficially Owned" shall have the
correlative meanings.

     Business Day. The term "Business Day" shall mean any day, other than a
Saturday or Sunday, that is neither a legal holiday nor a day on which banking
institutions in New York City are authorized or required by law, regulation or
executive order to close.

     Capital Stock. The term "Capital Stock" shall mean all classes or series of
stock of the Corporation, including, without limitation, Common Stock and
Preferred Stock.

                                      -7-


     Charitable Beneficiary. The term "Charitable Beneficiary" shall mean one or
more beneficiaries of the Trust as determined pursuant to Section 7.3.6,
provided that each such organization must be described in Section 501(c)(3) of
the Code and contributions to each such organization must be eligible for
deduction under each of Sections 170(b)(1)(A), 2055 and 2522 of the Code.

     Charter. The term "Charter" shall mean the charter of the Corporation, as
that term is defined in the MGCL.

     Code. The term "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.

     Common Stock Ownership Limit. The term "Common Stock Ownership Limit" shall
mean not more than 9.8 percent (in value or in number of shares, whichever is
more restrictive) of the aggregate of the outstanding shares of Common Stock of
the Corporation. The number and value of outstanding shares of Common Stock of
the Corporation shall be determined by the Board of Directors of the Corporation
in good faith, which determination shall be conclusive for all purposes hereof.

     Constructive Ownership. The term "Constructive Ownership" shall mean
ownership of Capital Stock by a Person, whether the interest in the shares of
Capital Stock is held directly or indirectly (including by a nominee), and shall
include interests that would be treated as owned through the application of
Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code. The
terms "Constructive Owner," "Constructively Owns" and "Constructively Owned"
shall have the correlative meanings.

     ERISA. The term "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.

     ERISA Investor. The term "ERISA Investor" shall mean (i) an employee
benefit plan as defined in Section 3(3) of ERISA, whether or not subject to
ERISA, or a plan described in section 4975 of the Code (including, without
limitation, foreign plans and governmental plans) (each, a "Plan"), (ii) an
entity whose underlying assets include (pursuant to the Plan Asset Regulation)
the assets of a Plan by reason of the Plan's direct or indirect investment in
such entity, or (iii) an entity that otherwise constitutes a benefit plan
investor within the meaning of the Plan Assets Regulation.

                                      -8-


     Excepted Holder. The term "Excepted Holder" shall mean a stockholder of the
Corporation for whom an Excepted Holder Limit is created by these Articles or by
the Board of Directors pursuant to Section 7.2.7.

     Excepted Holder Limit. The term "Excepted Holder Limit" shall mean,
provided that the affected Excepted Holder agrees to comply with the
requirements established by the Board of Directors pursuant to Section 7.2.7,
and subject to adjustment pursuant to Section 7.2.8, the percentage limit
established by the Board of Directors pursuant to Section 7.2.7.

     Initial Date. The term "Initial Date" shall mean the date upon which the
Company completes its initial public offering.

     Insignificant Participation Exception. The term "Insignificant
Participation Exception" shall mean the exception under the Plan Assets
Regulation which provides that an ERISA Investor's assets will not include any
of the underlying assets of an entity in which it invests if at all times less
than 25% of the value of each class of equity interests in the entity is held by
ERISA Investors as determined under such Plan Assets Regulation.

     Market Price. The term "Market Price" on any date shall mean, with respect
to any class or series of outstanding shares of Capital Stock, the Closing Price
for such Capital Stock on such date. The "Closing Price" on any date shall mean
the last sale price for such Capital Stock, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked prices,
regular way, for such Capital Stock, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the NYSE or, if such Capital Stock is not listed or
admitted to trading on the NYSE, as reported on the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which such Capital Stock is listed or admitted
to trading or, if such Capital Stock is not listed or admitted to trading on any
national securities exchange, the last quoted price, or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc. Automated
Quotation System or, if such system is no longer in use, the principal other
automated quotation system that may then be in use or, if such Capital


                                      -9-


Stock is not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in such
Capital Stock selected by the Board of Directors of the Corporation or, in the
event that no trading price is available for such Capital Stock, the fair market
value of the Capital Stock, as determined in good faith by the Board of
Directors of the Corporation.

     MGCL. The term "MGCL" shall mean the Maryland General Corporation Law, as
amended from time to time.

     NYSE. The term "NYSE" shall mean the New York Stock Exchange.

     Person. The term "Person" shall mean an individual, corporation,
partnership, estate, trust (including a trust qualified under Sections 401(a) or
501(c)(17) of the Code), a portion of a trust permanently set aside for or to be
used exclusively for the purposes described in Section 642(c) of the Code,
association, private foundation within the meaning of Section 509(a) of the
Code, joint stock company or other entity and also includes a group as that term
is used for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended, and a group to which an Excepted Holder Limit applies.

     Plan Assets Regulation. The term "Plan Assets Regulation" shall mean
Section 2510.3-101 of the regulations of the Department of Labor.

     Prohibited Owner. The term "Prohibited Owner" shall mean, with respect to
any purported Transfer, any Person who, but for the provisions of Section 7.2.1,
would Beneficially Own or Constructively Own shares of Capital Stock, and if
appropriate in the context, shall also mean any Person who would have been the
record owner of the shares that the Prohibited Owner would have so owned.

     REIT. The term "REIT" shall mean a real estate investment trust within the
meaning of Section 856 of the Code.

     Restriction Termination Date. The term "Restriction Termination Date" shall
mean the first day after the Initial Date on which the Corporation determines
pursuant to Section 5.7 of the Charter that it is no longer in the best
interests of the Corporation to attempt to, or continue to, qualify


                                      -10-


as a REIT or that compliance with the restrictions and limitations on Beneficial
Ownership, Constructive Ownership and Transfers of shares of Capital Stock set
forth herein is no longer required in order for the Corporation to qualify as a
REIT.

     Transfer. The term "Transfer" shall mean any issuance, sale, transfer,
gift, assignment, devise or other disposition, as well as any other event that
causes any Person to acquire Beneficial Ownership or Constructive Ownership, or
any agreement to take any such actions or cause any such events, of Capital
Stock or the right to vote or receive dividends on Capital Stock, including (a)
the granting or exercise of any option (or any disposition of any option), (b)
any disposition of any securities or rights convertible into or exchangeable for
Capital Stock or any interest in Capital Stock or any exercise of any such
conversion or exchange right and (c) Transfers of interests in other entities
that result in changes in Beneficial or Constructive Ownership of Capital Stock;
in each case, whether voluntary or involuntary, whether owned of record,
Constructively Owned or Beneficially Owned and whether by operation of law or
otherwise. The terms "Transferring" and "Transferred" shall have the correlative
meanings.

     Trust. The term "Trust" shall mean any trust provided for in Section 7.3.1.

     Trustee. The term "Trustee" shall mean the Person unaffiliated with the
Corporation and a Prohibited Owner, that is appointed by the Corporation to
serve as trustee of the Trust.

     Section 7.2 Capital Stock.

          Section 7.2.1 Ownership Limitations.

               (a) Basic Restrictions.

                    (i) During the period commencing on the Initial Date and
prior to the Restriction Termination Date (1) no Person, other than an Excepted
Holder, shall Beneficially Own or Constructively Own shares of Capital Stock in
excess of the Aggregate Stock Ownership Limit, (2) no Person, other than an
Excepted Holder, shall Beneficially Own or Constructively Own shares of Common
Stock in excess of the Common Stock Ownership Limit and (3) no Excepted Holder
shall Beneficially Own or Constructively Own shares of Capital Stock in excess
of the Excepted Holder Limit for such Excepted Holder.



                                      -11-


                    (ii) During the period commencing on the Initial Date and
prior to the Restriction Termination Date, no Person shall Beneficially or
Constructively Own shares of Capital Stock to the extent that such Beneficial or
Constructive Ownership of Capital Stock would result in the Corporation being
"closely held" within the meaning of Section 856(h) of the Code (without regard
to whether the ownership interest is held during the last half of a taxable
year), or otherwise failing to qualify as a REIT (including, but not limited to,
Beneficial or Constructive Ownership that would result in the Corporation owning
(actually or Constructively) an interest in a tenant that is described in
Section 856(d)(2)(B) of the Code if the income derived by the Corporation from
such tenant would cause the Corporation to fail to satisfy any of the gross
income requirements of Section 856(c) of the Code).

                    (iii) During the period commencing on the Initial Date and
prior to the Restriction Termination Date, subject to Section 7.4 hereof, but
notwithstanding any other provisions contained herein, any Transfer of shares of
Capital Stock that, if effective, would result in the Capital Stock being
beneficially owned by less than 100 Persons (determined under the principles of
Section 856(a)(5) of the Code) shall be void ab initio, and the intended
transferee shall acquire no rights in such shares of Capital Stock.

                    (iv) During the period commencing on the Initial Date and
prior to the date that either (1) each class of Capital Stock qualifies as a
class of "publicly-offered securities" (within the meaning of Section
2510.3-101(b)(2) of the Plan Assets Regulation) or (2) the Corporation qualifies
for another exception to the Plan Assets Regulation (other than the
Insignificant Participation Exception), no Transfer shall occur that, if
effective, would result in 25% or more of any class of Capital Stock being
Beneficially Owned by one or more ERISA Investors.

               (b) Violations of Basic Restrictions. If any Transfer of shares
of Capital Stock occurs which, if effective, would result in any Person
Beneficially Owning or Constructively Owning shares of Capital Stock in
violation of Section 7.2.1(a)(i), (ii) or (iv):

                    (i) then, for each such investor except an ERISA Investor,
that number of shares of the Capital Stock the Beneficial or Constructive
Ownership of which otherwise would


                                      -12-


cause such Person to violate Section 7.2.1(a)(i) or (ii) (rounded to the nearest
whole share) shall be automatically transferred to a Trust for the benefit of a
Charitable Beneficiary, as described in Section 7.3, effective as of the close
of business on the Business Day prior to the date of such Transfer, and such
Person shall acquire no rights in such shares; or

                    (ii) (1) if the transfer to the Trust described in clause
(i) of this Section 7.2.1(b) would not be effective for any reason to prevent
the violation of Section 7.2.1(a)(i) or (ii) or (2) if the investor is an ERISA
Investor, then, subject to Secion 7.4 hereof, the Transfer of that number of
shares of Capital Stock that otherwise would cause any Person to violate Section
7.2.1(a)(i), (ii) or (iv) shall be void ab initio, and the intended transferee
shall acquire no rights in such shares of Capital Stock.

          Section 7.2.2 Remedies for Breach. Subject to Section 7.4 hereof, if
the Board of Directors of the Corporation or any duly authorized committee
thereof shall at any time determine in good faith that a Transfer or other event
has taken place that results in a violation of Section 7.2.1 or that a Person
intends to acquire or has attempted to acquire Beneficial or Constructive
Ownership of any shares of Capital Stock in violation of Section 7.2.1 (whether
or not such violation is intended), the Board of Directors or a committee
thereof shall take such action as it deems advisable to refuse to give effect to
or to prevent such Transfer or other event, including, without limitation,
causing the Corporation to redeem shares, refusing to give effect to such
Transfer on the books of the Corporation or instituting proceedings to enjoin
such Transfer or other event; provided, however, that any Transfer or attempted
Transfer or other event in violation of Section 7.2.1 shall automatically result
in the transfer to the Trust described above for any investor except an ERISA
Investor, and, where applicable, such Transfer (or other event) shall be void ab
initio as provided above irrespective of any action (or non-action) by the Board
of Directors or a committee thereof.

          Section 7.2.3 Notice of Restricted Transfer. Any Person who acquires
or attempts or intends to acquire Beneficial Ownership or Constructive Ownership
of shares of Capital Stock that will or may violate Section 7.2.1(a) or any
Person who would have owned shares of Capital Stock that resulted in a transfer
to the Trust pursuant to the provisions of Section 7.2.1(b) shall


                                      -13-


immediately give written notice to the Corporation of such event, or in the case
of such a proposed or attempted transaction, give at least 15 days prior written
notice, and shall provide to the Corporation such other information as the
Corporation may request in order to determine the effect, if any, of such
Transfer on the Corporation's status as a REIT.

          Section 7.2.4 Owners Required To Provide Information. From the Initial
Date and prior to the Restriction Termination Date:

               (a) every owner of five percent or more (or such lower percentage
as required by the Code or the Treasury Regulations promulgated thereunder in
order for the corporation to avoid the imposition of penalties under Section
857(f)(2) of the Internal Revenue Code) of the outstanding shares of Capital
Stock, within 30 days after the end of each taxable year, shall give written
notice to the Corporation stating the name and address of such owner, the number
of shares of Capital Stock and other shares of the Capital Stock Beneficially
Owned and a description of the manner in which such shares are held. Each such
owner shall provide to the Corporation such additional information as the
Corporation may request in order to determine the effect, if any, of such
Beneficial Ownership on the Corporation's status as a REIT and to ensure
compliance with the Aggregate Stock Ownership Limit; and

               (b) each Person who is a Beneficial or Constructive Owner of
Capital Stock and each Person (including the stockholder of record) who is
holding Capital Stock for a Beneficial or Constructive Owner shall provide to
the Corporation such information as the Corporation may request, in good faith,
in order to determine the Corporation's status as a REIT and to comply with
requirements of any taxing authority or governmental authority or to determine
such compliance.

          Section 7.2.5 Remedies Not Limited. Subject to Section 5.7 of the
Charter, nothing contained in this Section 7.2 shall limit the authority of the
Board of Directors of the Corporation to take such other action as it deems
necessary or advisable to protect the Corporation and the interests of its
stockholders in preserving the Corporation's status as a REIT.

          Section 7.2.6 Ambiguity. In the case of an ambiguity in the
application of any of the provisions of this Section 7.2, Section 7.3, or any
definition contained in Section 7.1, the Board


                                      -14-


of Directors of the Corporation shall have the power to determine the
application of the provisions of this Section 7.2 or Section 7.3 or any such
definition with respect to any situation based on the facts known to it. In the
event Section 7.2 or 7.3 requires an action by the Board of Directors and the
Charter fails to provide specific guidance with respect to such action, the
Board of Directors shall have the power to determine the action to be taken so
long as such action is not contrary to the provisions of Sections 7.1, 7.2 or
7.3. Absent a decision to the contrary by the Board of Directors (which the
Board may make in its sole and absolute discretion), if a Person would have (but
for the remedies set forth in Section 7.2.2) acquired Beneficial or Constructive
Ownership of Stock in violation of Section 7.2.1, such remedies (as applicable)
shall apply first to the shares of Stock which, but for such remedies, would
have been Beneficially Owned or Constructively Owned (but not actually owned) by
such Person, pro rata among the Persons who actually own such shares of Stock
based upon the relative number of the shares of Stock held by each such Person.

          Section 7.2.7 Exceptions.

               (a) Subject to Section 7.2.1(a)(ii), the Board of Directors of
the Corporation, in its sole discretion, may exempt (prospectively or
retroactively) a Person from the Aggregate Stock Ownership Limit and the Common
Stock Ownership Limit, as the case may be, and may establish or increase an
Excepted Holder Limit for such Person if:

                    (i) the Board of Directors obtains such representations and
undertakings from such Person as are reasonably necessary to ascertain that no
individual's Beneficial or Constructive Ownership of such shares of Capital
Stock will violate Section 7.2.1(a)(ii);

                    (ii) such Person does not and represents that it will not
own, actually or Constructively, an interest in a tenant of the Corporation (or
a tenant of any entity owned or controlled by the Corporation) that would cause
the Corporation to own, actually or Constructively, more than a 9.9% interest
(as set forth in Section 856(d)(2)(B) of the Code) in such tenant and the Board
of Directors obtains such representations and undertakings from such Person as
are reasonably necessary to ascertain this fact (for this purpose, a tenant from
whom the Corporation (or an entity owned or controlled by the Corporation)
derives (and is expected to continue to derive) a sufficiently


                                      -15-


small amount of revenue such that, in the opinion of the Board of Directors of
the Corporation, rent from such tenant would not adversely affect the
Corporation's ability to qualify as a REIT, shall not be treated as a tenant of
the Corporation); and

                    (iii) such Person agrees that any violation or attempted
violation of such representations or undertakings (or other action which is
contrary to the restrictions contained in Sections 7.2.1 through 7.2.6) will
result in such shares of Capital Stock being automatically transferred to a
Trust or the Transfer of such Capital Stock being void ab initio in accordance
with Sections 7.2.1(b) and 7.3.

               (b) Prior to granting any exception pursuant to Section 7.2.7(a),
the Board of Directors of the Corporation may require a ruling from the Internal
Revenue Service, or an opinion of counsel, in either case in form and substance
satisfactory to the Board of Directors in its sole discretion, as it may deem
necessary or advisable in order to determine or ensure the Corporation's status
as a REIT. Notwithstanding the receipt of any ruling or opinion, the Board of
Directors may impose such conditions or restrictions as it deems appropriate in
connection with granting such exception.

               (c) Subject to Section 7.2.1(a)(ii), an underwriter which
participates in a public offering or a private placement of Capital Stock (or
securities convertible into or exchangeable for Capital Stock) may Beneficially
Own or Constructively Own shares of Capital Stock (or securities convertible
into or exchangeable for Capital Stock) in excess of the Aggregate Stock
Ownership Limit, the Common Stock Ownership Limit, or both such limits, but only
to the extent necessary to facilitate such public offering or private placement.

               (d) The Board of Directors may only reduce the Excepted Holder
Limit for an Excepted Holder: (1) with the written consent of such Excepted
Holder at any time, or (2) pursuant to the terms and conditions of the
agreements and undertakings entered into with such Excepted Holder in connection
with the establishment of the Excepted Holder Limit for that Excepted Holder. No
Excepted Holder Limit shall be reduced to a percentage that is less than the
Common Stock Ownership Limit.

                                      -16-


               (e) The Board of Directors, upon receipt of a ruling from the
Department of Labor or an opinion of counsel in each case to the effect that the
Corporation will not fail to qualify for the Insignificant Participation
Exception or another applicable exception to the Plan Asset Regulation, may
exempt an ERISA Investor from the restriction contained in Section 7.2.1(a)(iv),
provided that the Board of Directors obtains such representations and
undertakings from such ERISA Investor as are reasonably necessary to ascertain
the foregoing.

          Section 7.2.8 Increase in Aggregate Stock Ownership and Common Stock
Ownership Limits. Subject to Section 7.2.1 (a)(ii), the Board of Directors may
from time to time increase the Common Stock Ownership Limit and the Aggregate
Stock Ownership Limit for one or more Persons and decrease the Common Stock
Ownership Limit and the Aggregate Stock Ownership Limit for all other Persons;
provided, however, that the decreased Common Stock Ownership Limit and/or
Aggregate Stock Ownership Limit will not be effective for any Person whose
percentage ownership in Stock is in excess of such decreased Common Stock
Ownership Limit and/or Aggregate Stock Ownership Limit until such time as such
Person's percentage of Stock equals or falls below the decreased Common Stock
Ownership Limit and/or Aggregate Stock Ownership Limit, but any further
acquisition of Stock in excess of such percentage ownership of Stock will be in
violation of the Common Stock Ownership Limit and/or Aggregate Stock Ownership
Limit and, provided further, that the new Common Stock Ownership Limit and/or
Aggregate Stock Ownership Limit would not allow five or fewer Persons to
Beneficially Own more than 49.9% in value of the outstanding Stock.

          Section 7.2.9 Legend. Each certificate for shares of Capital Stock
shall bear substantially the following legend:

                                      -17-


                    The shares represented by this certificate are subject to
                    restrictions on Beneficial and Constructive Ownership and
                    Transfer for the purpose, among others, of the Corporation's
                    maintenance of its status as a Real Estate Investment Trust
                    under the Internal Revenue Code of 1986, as amended (the
                    "Code") and for certain other purposes under the Employee
                    Retirement Income Security Act of 1974, as amended
                    ("ERISA"). Subject to certain further restrictions and
                    except as expressly provided in the Corporation's Charter,
                    (i) no Person may Beneficially or Constructively Own shares
                    of the Corporation's Common Stock in excess of 9.8 percent
                    (in value or number of shares) of the outstanding shares of
                    Common Stock of the Corporation unless such Person is an
                    Excepted Holder (in which case the Excepted Holder Limit
                    shall be applicable); (ii) no Person may Beneficially or
                    Constructively Own shares of Capital Stock of the
                    Corporation in excess of 9.8 percent of the value of the
                    total outstanding shares of Capital Stock of the
                    Corporation, unless such Person is an Excepted Holder (in
                    which case the Excepted Holder Limit shall be applicable);
                    (iii) no Person may Beneficially or Constructively Own
                    Capital Stock that would result in the Corporation being
                    "closely held" under Section 856(h) of the Code or otherwise
                    cause the Corporation to fail to qualify as a REIT; (iv) no
                    Person may Transfer shares of Capital Stock if such Transfer
                    would result in the Capital Stock of the Corporation being
                    owned by fewer than 100 Persons; and (v) no Person may
                    Beneficially Own shares of Capital Stock that would result
                    in 25% or more of any class of the Equity Stock being
                    Beneficially Owned by one or more ERISA Investors until such
                    class qualifies as "publicly offered securities" within the
                    meaning of Section 2510.3-101 of the regulations of the
                    Department of Labor or until another exception to such
                    regulation applies. Any Person who Beneficially or
                    Constructively Owns or attempts to Beneficially or
                    Constructively Own shares of Capital Stock which causes or
                    will cause a Person to Beneficially or Constructively Own
                    shares of Capital Stock in excess or in violation of the
                    above limitations must immediately notify the Corporation.
                    If any of the restrictions on transfer or ownership are
                    violated, the shares of Capital Stock represented hereby
                    will be automatically transferred to a Trustee of a Trust
                    for the benefit of one or more Charitable Beneficiaries,
                    except if the Beneficial or Constructive Owner of such
                    Capital Stock is an ERISA Investor. A Transfer to an ERISA
                    Investor who attempts to Beneficially or Constructively Own
                    shares of Capital Stock which causes or will cause such
                    ERISA Investor to Beneficially or Constructively Own shares
                    of Capital Stock in excess or in violation of the above
                    limitations shall be void ab initio to the extent that such
                    limitation is exceeded. In addition, the Corporation



                                      -18-


                    may redeem shares upon the terms and conditions specified by
                    the Board of Directors in its sole discretion if the Board
                    of Directors determines that ownership or a Transfer or
                    other event may violate the restrictions described above.
                    Furthermore, upon the occurrence of certain events,
                    attempted Transfers in violation of the restrictions
                    described above may be void ab initio. All capitalized terms
                    in this legend have the meanings defined in the charter of
                    the Corporation, as the same may be amended from time to
                    time, a copy of which, including the restrictions on
                    transfer and ownership, will be furnished to each holder of
                    Capital Stock of the Corporation on request and without
                    charge. Requests for such a copy may be directed to the
                    Secretary of the Corporation at its Principal Office.

          Instead of the foregoing legend, the certificate may state that the
Corporation will furnish a full statement about certain restrictions on
transferability to a stockholder on request and without charge.

     Section 7.3 Transfer of Capital Stock in Trust.

          Section 7.3.1 Ownership in Trust. Upon any purported Transfer or other
event described in Section 7.2.1(b) that would result in a transfer of shares of
Capital Stock to a Trust, such shares of Capital Stock shall be deemed to have
been transferred to the Trustee as trustee of a Trust for the exclusive benefit
of one or more Charitable Beneficiaries. Such transfer to the Trustee shall be
deemed to be effective as of the close of business on the Business Day prior to
the purported Transfer or other event that results in the transfer to the Trust
pursuant to Section 7.2.1(b). The Trustee shall be appointed by the Corporation
and shall be a Person unaffiliated with the Corporation and any Prohibited
Owner. Each Charitable Beneficiary shall be designated by the Corporation as
provided in Section 7.3.6.

          Section 7.3.2 Status of Shares Held by the Trustee. Shares of Capital
Stock held by the Trustee shall be issued and outstanding shares of Capital
Stock of the Corporation. The


                                      -19-


Prohibited Owner shall have no rights in the shares held by the Trustee. The
Prohibited Owner shall not benefit economically from ownership of any shares
held in trust by the Trustee, shall have no rights to dividends or other
distributions and shall not possess any rights to vote or other rights
attributable to the shares held in the Trust.

          Section 7.3.3 Dividend and Voting Rights. The Trustee shall have all
voting rights and rights to dividends or other distributions with respect to
shares of Capital Stock held in the Trust, which rights shall be exercised for
the exclusive benefit of the Charitable Beneficiary. Any dividend or other
distribution paid prior to the discovery by the Corporation that the shares of
Capital Stock have been transferred to the Trustee shall be paid by the
recipient of such dividend or distribution to the Trustee upon demand and any
dividend or other distribution authorized but unpaid shall be paid when due to
the Trustee. Any dividend or distribution so paid to the Trustee shall be held
in trust for the Charitable Beneficiary. The Prohibited Owner shall have no
voting rights with respect to shares held in the Trust and, subject to Maryland
law, effective as of the date that the shares of Capital Stock have been
transferred to the Trustee, the Trustee shall have the authority (at the
Trustee's sole discretion) (i) to rescind as void any vote cast by a Prohibited
Owner prior to the discovery by the Corporation that the shares of Capital Stock
have been transferred to the Trustee and (ii) to recast such vote in accordance
with the desires of the Trustee acting for the benefit of the Charitable
Beneficiary; provided, however, that if the Corporation has already taken
irreversible corporate action, then the Trustee shall not have the authority to
rescind and recast such vote. Notwithstanding the provisions of this Article
VII, until the Corporation has received notification that shares of Capital
Stock have been transferred into a Trust, the Corporation shall be entitled to
rely on its share transfer and other stockholder records


                                      -20-


for purposes of preparing lists of stockholders entitled to vote at meetings,
determining the validity and authority of proxies and otherwise conducting votes
of stockholders.

          Section 7.3.4 Sale of Shares by Trustee. Within 20 days of receiving
notice from the Corporation that shares of Capital Stock have been transferred
to the Trust, the Trustee of the Trust shall sell the shares held in the Trust
to a person, designated by the Trustee, whose ownership of the shares will not
violate the ownership limitations set forth in Section 7.2.1(a). Upon such sale,
the interest of the Charitable Beneficiary in the shares sold shall terminate
and the Trustee shall distribute the net proceeds of the sale to the Prohibited
Owner and to the Charitable Beneficiary as provided in this Section 7.3.4. The
Prohibited Owner shall receive the lesser of (1) the price paid by the
Prohibited Owner for the shares or, if the Prohibited Owner did not give value
for the shares in connection with the event causing the shares to be held in the
Trust (e.g., in the case of a gift, devise or other such transaction), the
Market Price of the shares on the day of the event causing the shares to be held
in the Trust and (2) the price per share received by the Trustee (net of any
commissions and other expenses of sale) from the sale or other disposition of
the shares held in the Trust. The Trustee may reduce the amount payable to the
Prohibited Owner by the amount of dividends and distributions which have been
paid to the Prohibited Owner and are owed by the Prohibited Owner to the Trustee
pursuant to Section 7.3.3 of this Article VII. Any net sales proceeds in excess
of the amount payable to the Prohibited Owner shall be immediately paid to the
Charitable Beneficiary. If, prior to the discovery by the Corporation that
shares of Capital Stock have been transferred to the Trustee, such shares are
sold by a Prohibited Owner, then (i) such shares shall be deemed to have been
sold on behalf of the Trust and (ii) to the extent that the Prohibited Owner
received an amount for such shares that exceeds the amount


                                      -21-


that such Prohibited Owner was entitled to receive pursuant to this Section
7.3.4, such excess shall be paid to the Trustee upon demand.

          Section 7.3.5 Purchase Right in Stock Transferred to the Trustee.
Shares of Capital Stock transferred to the Trustee shall be deemed to have been
offered for sale to the Corporation, or its designee, at a price per share equal
to the lesser of (i) the price per share in the transaction that resulted in
such transfer to the Trust (or, in the case of a devise or gift, the Market
Price at the time of such devise or gift) and (ii) the Market Price on the date
the Corporation, or its designee, accepts such offer. The Corporation may reduce
the amount payable to the Prohibited Owner by the amount of dividends and
distributions which has been paid to the Prohibited Owner and are owed by the
Prohibited Owner to the Trustee pursuant to Section 7.3.3 of this Article VII.
The Corporation may pay the amount of such reduction to the Trustee for the
benefit of the Charitable Beneficiary. The Corporation shall have the right to
accept such offer until the Trustee has sold the shares held in the Trust
pursuant to Section 7.3.4. Upon such a sale to the Corporation, the interest of
the Charitable Beneficiary in the shares sold shall terminate and the Trustee
shall distribute the net proceeds of the sale to the Prohibited Owner.

          Section 7.3.6 Designation of Charitable Beneficiaries. By written
notice to the Trustee, the Corporation shall designate one or more nonprofit
organizations to be the Charitable Beneficiary of the interest in the Trust such
that (i) the shares of Capital Stock held in the Trust would not violate the
restrictions set forth in Section 7.2.1(a) in the hands of such Charitable
Beneficiary and (ii) each such organization must be described in Section
501(c)(3) of the Code and contributions to each such organization must be
eligible for deduction under each of Sections 170(b)(1)(A), 2055 and 2522 of the
Code.

                                      -22-


     Section 7.4 NYSE Transactions. Nothing in this Article VII shall preclude
the settlement of any transaction entered into through the facilities of the
NYSE or any other national securities exchange or automated inter-dealer
quotation system. The fact that the settlement of any transaction occurs shall
not negate the effect of any other provision of this Article VII and any
transferee in such a transaction shall be subject to all of the provisions and
limitations set forth in this Article VII.

     Section 7.5 Enforcement. The Corporation is authorized specifically to seek
equitable relief, including injunctive relief, to enforce the provisions of this
Article VII.

     Section 7.6 Non-Waiver. No delay or failure on the part of the Corporation
or the Board of Directors in exercising any right hereunder shall operate as a
waiver of any right of the Corporation or the Board of Directors, as the case
may be, except to the extent specifically waived in writing.

                                  ARTICLE VIII
                                   AMENDMENTS

     The Corporation reserves the right from time to time to make any amendment
to its charter, now or hereafter authorized by law, including any amendment
altering the terms or contract rights, as expressly set forth in the charter, of
any shares of outstanding stock. All rights and powers conferred by the charter
on stockholders, directors and officers are granted subject to this reservation.
Any amendment to Section 5.8 or this sentence of the charter shall require the
affirmative vote of two-thirds of all the votes entitled to be cast on the
matter.


                                      -23-


                                   ARTICLE IX
                             LIMITATION OF LIABILITY

     To the maximum extent that Maryland law in effect from time to time permits
limitation of the liability of directors and officers of a corporation, no
present or former director or officer of the Corporation shall be liable to the
Corporation or its stockholders for money damages. Neither the amendment nor
repeal of this Article IX, nor the adoption or amendment of any other provision
of the charter or Bylaws inconsistent with this Article IX, shall apply to or
affect in any respect the applicability of the preceding sentence with respect
to any act or failure to act which occurred prior to such amendment, repeal or
adoption.

     THIRD: The amendment to and restatement of the charter as hereinabove set
forth have been duly advised by the Board of Directors and approved by the
stockholders of the Corporation as required by law.

     FOURTH: The current address of the principal office of the Corporation is
as set forth in Article IV of the foregoing amendment and restatement of the
charter.

     FIFTH: The name and address of the Corporation's current resident agent is
as set forth in Article IV of the foregoing amendment and restatement of the
charter.

     SIXTH: The number of directors of the Corporation and the names of those
currently in office are as set forth in Article V of the foregoing amendment and
restatement of the charter.

     SEVENTH: These Articles of Amendment and Restatement do not increase the
authorized stock of the Corporation.

     EIGHTH: The undersigned President acknowledges these Articles of Amendment
and Restatement to be the corporate act of the Corporation and as to all matters
or facts required to be verified under oath, the undersigned President
acknowledges that, to the best of his knowledge, information and belief, these
matters and facts are true in all material respects and that this statement is
made under the penalties for perjury.



                                      -24-



     IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment
and Restatement to be signed in its name and on its behalf by its President and
attested to by its Secretary on this 18th day of October, 2004.

ATTEST:                                    NORTHSTAR REALTY FINANCE CORP.



/s/ Mark E. Chertok                        By: /s/ David T. Hamamoto (SEAL)
---------------------------                    ---------------------
Mark E. Chertok                                David T. Hamamoto
Secretary                                      President












                                      -25-