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

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

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

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

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

     2. Employment.

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

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


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

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


                                       2


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

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

     3. Duties of Executive.

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

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

                                       3


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       6


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

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

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

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

         5. Termination Procedure.

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

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

                                       7


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

     6. Obligations of the Company Upon Termination of Employment.

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

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

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

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

                                       8


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

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

        (c) Excise Taxes.

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

                                       9


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

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

                                       10


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

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

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

                                       11


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


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

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

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

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

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

     14. Dispute Resolution:

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

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

                                       13


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

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

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

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

                                  /s/ Jean-Michel Wasterlain
                                  -----------------------------------
                                  Jean-Michel Wasterlain



                                  NORTHSTAR REALTY FINANCE CORP.



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


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