VESTING AGREEMENT


Name of Grantee:  _____________________
No. of Units: ________________________, subject to increase upon the issuance of
any Overallotment IPO Shares as described below
Grant Date: _____________ __, 200_
Final Acceptance Date: _____________ __, 200_



         Pursuant to the Operating Agreement, dated as of [______________], as
amended through the date hereof (the "Operating Agreement"), of NRF Employee,
LLC, a Delaware limited liability company (the "Company"), the Company hereby
grants to the Grantee named above Units (as defined in the Operating Agreement)
having the rights, voting powers, restrictions, limitations as to distributions,
qualifications and terms and conditions of redemption and conversion set forth
herein and in the Operating Agreement. Upon acceptance of this Vesting Agreement
(this "Agreement"), the Grantee shall receive the number of Units specified
above, subject to the restrictions and conditions set forth herein and in the
Operating Agreement. In addition, pursuant to this Agreement, upon each issuance
of Overallotment IPO Shares (as defined in the NorthStar Realty Finance Corp.
2004 Omnibus Stock Incentive Plan (the "Plan")), the Grantee shall receive an
additional number of Units equal to __% of the number of such Overallotment IPO
Shares, subject to the restrictions and conditions set forth herein and in the
Operating Agreement. The Units granted herein are being granted in connection
with the issuance of the Initial LTIP Units (as defined in the Operating
Agreement) from NorthStar Realty Finance Limited Partnership, a Delaware limited
partnership (the "Partnership"), to the Company as an Other Award pursuant to
the Plan and the LTIP Unit Vesting Agreement, dated as of [________], by and
between the Partnership and the Company (the "LTIP Unit Vesting Agreement").

         1.    Acceptance of Agreement. The Grantee shall have no rights with
respect to this Agreement unless it has accepted this Agreement prior to the
close of business on the Final Acceptance Date specified above by (i) signing
and delivering to the Company a copy of this Agreement and (ii) unless the
Grantee is already a Member (as defined in the Operating Agreement), signing, as
a Member, and delivering to the Company a counterpart signature page to the
Operating Agreement (attached hereto as Annex A). Upon acceptance of this
Agreement by the Grantee and any automatic grant of Units under this Agreement
as a result of the issuance of any Overallotment IPO Shares, the Operating
Agreement shall be amended to reflect the issuance to the Grantee of the Units
so accepted or automatically granted and the Company shall deliver to the
Grantee a certificate of the Company certifying the number of Units then issued
to the Grantee. Thereupon, the Grantee shall have all the rights of a Member of
the Company with respect to the number of Units then issued to the Grantee, as
set forth in the Operating Agreement, subject, however, to the restrictions and
conditions specified in Section 2 below.






         2.    Restrictions and Conditions.

               (a)    The records of the Company evidencing the Units granted
herein shall bear an appropriate legend, as determined by the Company in its
sole discretion, to the effect that such Units are subject to restrictions as
set forth herein and in the Operating Agreement.

               (b)    Units granted herein may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of by the Grantee prior
to vesting.

               (c)    In the event of the Grantee's termination of employment
with, cessation of consulting relationship with or cessation of service to
NorthStar Realty Finance Corp. ("NRFC") and its Subsidiaries (as defined in the
Plan) for any reason, the Units that have not vested at that time will be
forfeited to the Company without payment of any consideration by the Company,
and neither the Grantee nor any of his successors, heirs, assigns, or personal
representatives will thereafter have any further rights or interests in such
Units. In the event Grantee becomes a consultant, advisor or Non-Employee
Director (as such term is defined in the Plan), such change in status shall not
be deemed a termination of employment or service with the Company at the time of
such change in status.

         3.    Vesting of Units. The restrictions and conditions in Paragraph 2
of this Agreement shall lapse and the Units granted herein shall vest as to
1/12th of the Units granted herein on the [insert the day of the Grant Date] day
of each [insert month that is three months after the Grant Date], [insert month
that is six months after the Grant Date], [insert month that is nine months
after the Grant Date] and [insert month of the Grant Date] beginning [insert the
date that is three months after the Grant Date].

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