Exhibit 10.25

 

FORM OF AMENDED AND RESTATED

INDEMNIFICATION AGREEMENT

 

THIS AMENDED AND RESTATED INDEMNIFICATION AGREEMENT (“Agreement”) is made and
entered into as of the           day of                  , 20         , by and
between NorthStar Realty Finance Corp., a Maryland corporation (the “Company”),
NRFC Sub-REIT Corp., a Maryland corporation (the “Sub-REIT”), and
                                        (“Indemnitee”).

 

WHEREAS, at the request of the Company, Indemnitee currently serves as [a
director] [and] [an officer] of the Company and may, therefore, be subjected to
claims, suits or proceedings arising as a result of [his][her] service; and

 

[WHEREAS, at the request of the Company or the Sub-REIT, Indemnitee currently is
serving or may serve as a director or an officer of Sub-REIT and may, therefore,
be subjected to claims, suits or proceedings arising as a result of [his][her]
service;] and

 

WHEREAS, the Company indirectly owns all of the outstanding stock of Sub-REIT
and most of the Company’s business is conducted through the Sub-REIT; and

 

WHEREAS, the Sub-REIT derives substantial benefit from the Board of Directors
and management of the Company; and

 

WHEREAS, as an inducement to Indemnitee to serve or continue to serve as [a
director] [and] [an officer] of the Company, the Company and the Sub-REIT have
agreed to indemnify and to advance expenses and costs incurred by Indemnitee in
connection with any such claims, suits or proceedings, to the maximum extent
permitted by law[, including pursuant to an existing Indemnification Agreement,
if any, by and between the Company and the Indemnitee (the “Prior Agreement”)];
and

 

WHEREAS, the parties by this Agreement desire to [amend and restate the Prior
Agreement and] set forth their agreement regarding indemnification and advance
of expenses;

 

NOW, THEREFORE, in consideration of the premises and the covenants contained
herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

Section 1.                                            Definitions.  For purposes
of this Agreement:

 

(a)                                  “Change in Control” means a change in
control of the Company occurring after the Effective Date of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A (or in response to any similar item on any similar schedule or
form) promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), whether or not the Company is then subject to such reporting
requirement; provided, however, that, without limitation, such a Change in
Control shall be deemed to have occurred if, after the Effective Date (i) any
“person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing
15% or more of the combined voting power of all of the Company’s
then-outstanding securities entitled to vote

 

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generally in the election of directors without the prior approval of at least
two-thirds of the members of the Board of Directors in office immediately prior
to such person’s attaining such percentage interest; (ii) the Company is a party
to a merger, consolidation, sale of assets, plan of liquidation or other
reorganization not approved by at least two-thirds of the members of the Board
of Directors then in office, as a consequence of which members of the Board of
Directors in office immediately prior to such transaction or event constitute
less than a majority of the Board of Directors thereafter; or (iii) at any time,
a majority of the members of the Board of Directors are not individuals (A) who
were directors as of the Effective Date or (B) whose election by the Board of
Directors or nomination for election by the Company’s stockholders was approved
by the affirmative vote of at least two-thirds of the directors then in office
who were directors as of the Effective Date or whose election for nomination for
election was previously so approved.

 

(b)                                 “Corporate Status” means the status of a
person as a present or former director, officer, employee or agent of the
Company or as a director, trustee, officer, partner, manager, managing member,
fiduciary, employee or agent of any other foreign or domestic corporation,
partnership, limited liability company, joint venture, trust, employee benefit
plan or other enterprise that such person is or was serving in such capacity at
the request of the Company.  As a clarification and without limiting the
circumstances in which Indemnitee may be serving at the request of the Company
service by Indemnitee shall be deemed to be at the request of the Company; (i)
if Indemnitee serves or served as a director, trustee, officer, partner,
manager, managing member, fiduciary, employee or agent of any corporation
(including the Sub-REIT), partnership, limited liability company, joint venture,
trust, or other enterprise (1) of which a majority of the voting power or equity
interest is owned directly or indirectly by the Company or (2) of which the
Company, directly or indirectly, has the power to direct, manage, oversee or
restrict the management, business or assets or (ii) if, as a result of
Indemnitee’s service to the Company or any of its affiliated entities,
Indemnitee is subject to duties by, or required to perform services for, an
employee benefit plan or its participants or beneficiaries, including as a
deemed fiduciary thereof.

 

(c)                                  “Disinterested Director” means a director
of the Company who is not and was not a party to the Proceeding in respect of
which indemnification and/or advance of Expenses is sought by Indemnitee.

 

(d)                                 “Effective Date” means the date set forth in
the first paragraph of this Agreement.

 

(e)                                  “Expenses” means any and all reasonable and
out-of-pocket attorneys’ fees and costs, retainers, court costs, transcript
costs, fees of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery service fees,
federal, state, local or foreign taxes imposed on Indemnitee as a result of the
actual or deemed receipt of any payments under this Agreement, the Bylaws of the
Company or D&O insurance policy, ERISA excise taxes and penalties and any other
disbursements or expenses incurred in connection with prosecuting, defending,
preparing to prosecute or defend, investigating, being or preparing to be a
witness in or otherwise participating in a Proceeding.  Expenses shall also
include Expenses incurred in connection with any appeal resulting from any
Proceeding including, without limitation, the premium, security for and other
costs relating to any cost bond, supersedeas bond or other appeal bond or its
equivalent.

 

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(f)                                    “Independent Counsel” means a law firm,
or a member of a law firm, that is experienced in matters of corporation law and
neither is, nor in the past five years has been, retained to represent:  (i) the
Company or Indemnitee in any matter material to either such party (other than
with respect to matters concerning Indemnitee under this Agreement or of other
indemnitees under similar indemnification agreements), or (ii) any other party
to or participant or witness in the Proceeding giving rise to a claim for
indemnification or advance of Expenses hereunder.  Notwithstanding the
foregoing, the term “Independent Counsel” shall not include any person who,
under the applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Company or Indemnitee in
an action to determine Indemnitee’s rights under this Agreement.

 

(g)                                 “Proceeding” means any threatened, pending
or completed action, suit, arbitration, alternate dispute resolution mechanism,
investigation, inquiry, administrative hearing or any other proceeding, whether
brought by or in the right of the Company or otherwise and whether of a civil
(including intentional or unintentional tort claims), criminal, administrative
or investigative (formal or informal) nature, including any appeal therefrom,
except one pending or completed on or before the Effective Date, unless
otherwise specifically agreed in writing by the Company and Indemnitee [or if it
would have been covered by the Prior Agreement].  If Indemnitee reasonably
believes that a given situation may lead to or culminate in the institution of a
Proceeding, such situation shall also be considered a Proceeding.

 

Section 2.                                            Services by Indemnitee. 
Indemnitee [will serve][serves] as [a director] [and] [an officer] of the
Company.  However, this Agreement shall not impose any independent obligation on
Indemnitee or the Company to continue Indemnitee’s service to the Company.  This
Agreement shall not be deemed an employment contract between the Company (or any
other entity) and Indemnitee.

 

Section 3.                                            General.  The Company
shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this
Agreement and (b) otherwise to the maximum extent permitted by Maryland law in
effect on the Effective Date and as amended from time to time; provided,
however, that no change in Maryland law shall have the effect of reducing the
benefits available to Indemnitee hereunder based on Maryland law as in effect on
the Effective Date.  The rights of Indemnitee provided in this Section 3 shall
include, without limitation, the rights set forth in the other sections of this
Agreement, including any additional indemnification permitted by Section
2-418(g) of the Maryland General Corporation Law (the “MGCL”).

 

Section 4.                                            Standard for
Indemnification.  If, by reason of Indemnitee’s Corporate Status, Indemnitee is,
or is threatened to be, made a party to any Proceeding, the Company shall
indemnify Indemnitee against all judgments, penalties, fines and amounts paid in
settlement and all Expenses actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection with any such Proceeding unless it is
established that (a) the act or omission of Indemnitee was material to the
matter giving rise to the Proceeding and (i) was committed in bad faith or (ii)
was the result of active and deliberate dishonesty, (b) Indemnitee actually
received an improper personal benefit in money, property or services or (c) in
the case of any criminal Proceeding, Indemnitee had reasonable cause to believe
that [his][her] conduct was unlawful.

 

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Section 5.                                            Certain Limits on
Indemnification.  Notwithstanding any other provision of this Agreement (other
than Section 6), Indemnitee shall not be entitled to:

 

(a)                                  indemnification hereunder if the Proceeding
was one by or in the right of the Company and Indemnitee is adjudged to be
liable to the Company;

 

(b)                                 indemnification hereunder if Indemnitee is
adjudged to be liable on the basis that personal benefit was improperly received
in any Proceeding charging improper personal benefit to Indemnitee, whether or
not involving action in the Indemnitee’s Corporate Status; or

 

(c)                                  indemnification or advance of Expenses
hereunder if the Proceeding was brought by Indemnitee, unless: (i) the
Proceeding was brought to enforce indemnification under this Agreement, and then
only to the extent in accordance with and as authorized by Section 12 of this
Agreement, or (ii) the Company’s charter or Bylaws, a resolution of the
stockholders entitled to vote generally in the election of directors or of the
Board of Directors or an agreement approved by the Board of Directors to which
the Company is a party expressly provide otherwise.

 

Section 6.                                            Court-Ordered
Indemnification.  Notwithstanding any other provision of this Agreement, a court
of appropriate jurisdiction, upon application of Indemnitee and such notice as
the court shall require, may order indemnification of Indemnitee by the Company
in the following circumstances:

 

(a)                                  if such court determines that Indemnitee is
entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall
order indemnification, in which case Indemnitee shall be entitled to recover the
Expenses of securing such reimbursement; or

 

(b)                                 if such court determines that Indemnitee is
fairly and reasonably entitled to indemnification in view of all the relevant
circumstances, whether or not Indemnitee (i) has met the standards of conduct
set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for
receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the
court may order such indemnification as the court shall deem proper.  However,
indemnification with respect to any Proceeding by or in the right of the Company
or in which liability shall have been adjudged in the circumstances described in
Section 2-418(c) of the MGCL shall be limited to Expenses.

 

Section 7.                                            Indemnification for
Expenses of an Indemnitee Who is Wholly or Partially Successful. 
Notwithstanding any other provision of this Agreement, and without limiting any
such provision, to the extent that Indemnitee was or is, by reason of [his][her]
Corporate Status, made a party to any Proceeding and is successful, on the
merits or otherwise, in the defense of such Proceeding, Indemnitee shall be
indemnified for all Expenses actually and reasonably incurred by Indemnitee or
on Indemnitee’s behalf in connection therewith.  If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as
to one or more but less than all claims, issues or matters in such Proceeding,
the Company shall indemnify Indemnitee under this Section 7 for all Expenses
actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in
connection with each such claim, issue or matter, allocated on a reasonable and
proportionate basis.  For purposes of this Section 7 and, without limitation,
the

 

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termination of any claim, issue or matter in such a Proceeding by dismissal,
with or without prejudice, shall be deemed to be a successful result as to such
claim, issue or matter.

 

Section 8.                                            Advance of Expenses for
Indemnitee.  If, by reason of Indemnitee’s Corporate Status, Indemnitee is, or
is threatened to be, made a party to any Proceeding, the Company shall, without
requiring a preliminary determination of Indemnitee’s ultimate entitlement to
indemnification hereunder, advance all reasonable Expenses incurred by or on
behalf of Indemnitee in connection with such Proceeding.  Such advance or
advances shall be made within ten days after the receipt by the Company of a
statement or statements requesting such advance or advances from time to time,
whether prior to or after final disposition of such Proceeding and may be in the
form of, in the reasonable discretion of the Indemnitee (but without
duplication) (a) payment of such Expenses directly to third parties on behalf of
Indemnitee, (b) advancement to Indemnitee of funds in an amount sufficient to
pay such Expenses or (c) reimbursement to Indemnitee for Indemnitee’s payment of
such Expenses.  Such statement or statements shall reasonably evidence the
Expenses incurred or expected to be incurred by Indemnitee and shall include or
be preceded or accompanied by a written affirmation by Indemnitee of
Indemnitee’s good faith belief that the standard of conduct necessary for
indemnification by the Company as authorized by law and by this Agreement has
been met and a written undertaking by or on behalf of Indemnitee, in
substantially the form attached hereto as Exhibit A or in such form as may be
required under applicable law as in effect at the time of the execution thereof,
to reimburse the portion of any Expenses advanced to Indemnitee relating to
claims, issues or matters in the Proceeding as to which it shall ultimately be
established that the standard of conduct has not been met by Indemnitee and
which have not been successfully resolved as described in Section 7 of this
Agreement.  To the extent that Expenses advanced to Indemnitee do not relate to
a specific claim, issue or matter in the Proceeding, such Expenses shall be
allocated on a reasonable and proportionate basis.  The undertaking required by
this Section 8 shall be an unlimited general obligation by or on behalf of
Indemnitee and shall be accepted without reference to Indemnitee’s financial
ability to repay such advanced Expenses and without any requirement to post
security therefor.

 

Section 9.                                            Indemnification and
Advance of Expenses as a Witness or Other Participant.  Notwithstanding any
other provision of this Agreement, to the extent that Indemnitee is or may be,
by reason of Indemnitee’s Corporate Status, made a witness or otherwise asked to
participate in any Proceeding, whether instituted by the Company or any other
party, and to which Indemnitee is not a party, Indemnitee shall be advanced all
reasonable Expenses incurred or expected to be incurred and indemnified against
all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection therewith within ten days after the receipt by the Company
of a statement or statements requesting any such advance or indemnification from
time to time, whether prior to or after final disposition of such Proceeding. 
Such statement or statements shall reasonably evidence the Expenses incurred by
Indemnitee.

 

Section 10.                                      Procedure for Determination of
Entitlement to Indemnification.

 

(a)                                  To obtain indemnification under this
Agreement, Indemnitee shall submit to the Company a written request, including
therein or therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to

 

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what extent Indemnitee is entitled to indemnification.  Indemnitee may submit
one or more such requests from time to time and at such time(s) as Indemnitee
deems appropriate in Indemnitee’s sole discretion.  The officer of the Company
receiving any such request from Indemnitee shall, promptly upon receipt of such
a request for indemnification, advise the Board of Directors in writing that
Indemnitee has requested indemnification.

 

(b)                                 Upon written request by Indemnitee for
indemnification pursuant to Section 10(a) above, a determination, if required by
applicable law, with respect to Indemnitee’s entitlement thereto shall promptly
be made in the specific case: (i) if a Change in Control shall have occurred, by
Independent Counsel, in a written opinion to the Board of Directors, a copy of
which shall be delivered to Indemnitee, which Independent Counsel shall be
selected by the Indemnitee and approved by the Board of Directors in accordance
with Section 2-418(e)(2)(ii) of the MGCL, which approval shall not be
unreasonably withheld; or (ii) if a Change in Control shall not have occurred,
(A) by the Board of Directors by a majority vote of a quorum consisting of
Disinterested Directors or, if such a quorum cannot be obtained, then by a
majority vote of a duly authorized committee of the Board of Directors
consisting solely of one or more Disinterested Directors, or (B) if Independent
Counsel has been selected by the Board of Directors in accordance with Section
2-418(e)(2)(ii) of the MGCL and approved by the Indemnitee, which approval shall
not be unreasonably withheld, by Independent Counsel, in a written opinion to
the Board of Directors, a copy of which shall be delivered to Indemnitee.  If it
is so determined that Indemnitee is entitled to indemnification, payment to
Indemnitee shall be made within ten days after such determination.  Indemnitee
shall cooperate with the person, persons or entity making such determination
with respect to Indemnitee’s entitlement to indemnification, including providing
to such person, persons or entity upon reasonable advance request any
documentation or information which is not privileged or otherwise protected from
disclosure and which is reasonably available to Indemnitee and reasonably
necessary to such determination in the reasonable discretion of the Board of
Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this
Section 10(b).  Any Expenses incurred by Indemnitee in so cooperating with the
person, persons or entity making such determination shall be borne by the
Company (irrespective of the determination as to Indemnitee’s entitlement to
indemnification) and the Company shall indemnify and hold Indemnitee harmless
therefrom.

 

(c)                                  The Company shall pay the reasonable fees
and expenses of Independent Counsel, if one is appointed.

 

Section 11.                                      Presumptions and Effect of
Certain Proceedings.

 

(a)                                  In making any determination with respect to
entitlement to indemnification hereunder, the person or persons or entity making
such determination shall presume that Indemnitee is entitled to indemnification
under this Agreement if Indemnitee has submitted a request for indemnification
in accordance with Section 10(a) of this Agreement, and the Company shall have
the burden of proof to overcome that presumption in connection with the making
of any determination contrary to that presumption.

 

(b)                                 The termination of any Proceeding or of any
claim, issue or matter therein, by judgment, order, settlement or conviction,
upon a plea of nolo contendere or its equivalent, or

 

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entry of an order of probation prior to judgment, does not create a presumption
that Indemnitee did not meet the requisite standard of conduct described herein
for indemnification.

 

(c)                                  The knowledge and/or actions, or failure to
act, of any other director, officer, employee or agent of the Company or any
other director, trustee, officer, partner, manager, managing member, fiduciary,
employee or agent of any other foreign or domestic corporation, partnership,
limited liability company, joint venture, trust, employee benefit plan or other
enterprise shall not be imputed to Indemnitee for purposes of determining any
other right to indemnification under this Agreement.

 

Section 12.                                      Remedies of Indemnitee.

 

(a)                                  If (i) a determination is made pursuant to
Section 10(b) of this Agreement that Indemnitee is not entitled to
indemnification under this Agreement, (ii) advance of Expenses is not timely
made pursuant to Sections 8 or 9 of this Agreement, (iii) no determination of
entitlement to indemnification shall have been made pursuant to Section 10(b) of
this Agreement within 60 days after receipt by the Company of the request for
indemnification, (iv) payment of indemnification is not made pursuant to
Sections 7 or 9 of this Agreement within ten days after receipt by the Company
of a written request therefor, or (v) payment of indemnification pursuant to any
other section of this Agreement or the charter or Bylaws of the Company is not
made within ten days after a determination has been made that Indemnitee is
entitled to indemnification, Indemnitee shall be entitled to an adjudication in
an appropriate court located in the State of Maryland, or in any other court of
competent jurisdiction, of Indemnitee’s entitlement to such indemnification or
advance of Expenses.  Alternatively, Indemnitee, at Indemnitee’s option, may
seek an award in arbitration to be conducted by a single arbitrator pursuant to
the Commercial Arbitration Rules of the American Arbitration Association. 
Indemnitee shall commence a proceeding seeking an adjudication or an award in
arbitration within 180 days following the date on which Indemnitee first has the
right to commence such proceeding pursuant to this Section 12(a); provided,
however, that the foregoing clause shall not apply to a proceeding brought by
Indemnitee to enforce [his][her] rights under Section 7 of this Agreement. 
Except as set forth herein, the provisions of Maryland law (without regard to
its conflicts of laws rules) shall apply to any such arbitration.  The Company
shall not oppose Indemnitee’s right to seek any such adjudication or award in
arbitration.

 

(b)                                 In any judicial proceeding or arbitration
commenced pursuant to this Section 12, Indemnitee shall be presumed to be
entitled to indemnification or advance of Expenses, as the case may be, under
this Agreement and the Company shall have the burden of proving that Indemnitee
is not entitled to indemnification or advance of Expenses, as the case may be. 
The Company shall, to the maximum extent not prohibited by law, be precluded
from asserting in any judicial proceeding or arbitration commenced pursuant to
this Section 12 that the procedures and presumptions of this Agreement are not
valid, binding and enforceable and shall stipulate in any such court or before
any such arbitrator that the Company is bound by all of the provisions of this
Agreement.

 

(c)                                  If a determination shall have been made
pursuant to Section 10(b) of this Agreement that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 12,

 

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absent a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee’s statement not materially
misleading, in connection with the request for indemnification.

 

(d)                                 In the event that Indemnitee is successful
in seeking, pursuant to this Section 12, a judicial adjudication of or an award
in arbitration to enforce Indemnitee’s rights under, or to recover damages for
breach of, this Agreement, Indemnitee shall be entitled to recover from the
Company, and shall be indemnified by the Company for, any and all Expenses
actually and reasonably incurred by him in such judicial adjudication or
arbitration.  If it shall be determined in such judicial adjudication or
arbitration that Indemnitee is entitled to receive part but not all of the
indemnification or advance of Expenses sought, the Expenses incurred by
Indemnitee in connection with such judicial adjudication or arbitration shall be
appropriately prorated.

 

(e)                                  Interest shall be paid by the Company to
Indemnitee at the maximum rate allowed to be charged for judgments under the
Courts and Judicial Proceedings Article of the Annotated Code of Maryland for
amounts which the Company pays or is obligated to pay for the period (i)
commencing with either the tenth day after the date on which the Company was
requested to advance Expenses in accordance with Sections 8 or 9 of this
Agreement or the 60th day after the date on which the Company was requested to
make the determination of entitlement to indemnification under Section 10(b) of
this Agreement, as applicable, and (ii) ending on the date such payment is made
to Indemnitee by the Company.

 

Section 13.                                      Defense of the Underlying
Proceeding.

 

(a)                                  Indemnitee shall notify the Company
promptly in writing upon being served with any summons, citation, subpoena,
complaint, indictment, request or other document relating to any Proceeding
which may result in the right to indemnification or the advance of Expenses
hereunder and shall include with such notice a description of the nature of the
Proceeding and a summary of the facts underlying the Proceeding.  The failure to
give any such notice shall not disqualify Indemnitee from the right, or
otherwise affect in any manner any right of Indemnitee, to indemnification or
the advance of Expenses under this Agreement unless the Company’s ability to
defend in such Proceeding or to obtain proceeds under any insurance policy is
materially and adversely prejudiced thereby, and then only to the extent the
Company is thereby actually so prejudiced.

 

(b)                                 Subject to the provisions of the last
sentence of this Section 13(b) and of Section 13(c) below, the Company shall
have the right to defend Indemnitee in any Proceeding to which Indemnitee is a
party by reason of Indemnitee’s Corporate Status, which may give rise to
indemnification hereunder; provided, however, that the Company shall notify
Indemnitee of any such decision to defend within 15 calendar days following
receipt of notice of any such Proceeding under Section 13(a) above.  The Company
shall not, without the prior written consent of Indemnitee, which shall not be
unreasonably withheld or delayed, consent to the entry of any judgment against
Indemnitee or enter into any settlement or compromise which (i) includes an
admission of fault of Indemnitee, (ii) does not include, as an unconditional
term thereof, the full release of Indemnitee from all liability in respect of
such Proceeding, which release shall be in form and substance reasonably
satisfactory to Indemnitee or (iii) would impose any Expense,

 

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judgment, fine, penalty or limitation on Indemnitee.  This Section 13(b) shall
not apply to a Proceeding brought by Indemnitee under Section 12 of this
Agreement.

 

(c)                                  Notwithstanding the provisions of Section
13(b) above, if in a Proceeding to which Indemnitee is a party by reason of
Indemnitee’s Corporate Status, (i) Indemnitee reasonably concludes, based upon
an opinion of counsel approved by the Company, which approval shall not be
unreasonably withheld or delayed, that Indemnitee may have separate defenses or
counterclaims to assert with respect to any issue which may not be consistent
with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes,
based upon an opinion of counsel approved by the Company, which approval shall
not be unreasonably withheld, that an actual or apparent conflict of interest or
potential conflict of interest exists between Indemnitee and the Company, or
(iii) if the Company fails to assume the defense of such Proceeding in a timely
manner, Indemnitee shall be entitled to be represented by separate legal counsel
of Indemnitee’s choice, subject to the prior approval of the Company, which
approval shall not be unreasonably withheld, at the expense of the Company.  In
addition, if the Company fails to comply with any of its obligations under this
Agreement or in the event that the Company or any other person takes any action
to declare this Agreement void or unenforceable, or institutes any Proceeding to
deny or to recover from Indemnitee the benefits intended to be provided to
Indemnitee hereunder, Indemnitee shall have the right to retain counsel of
Indemnitee’s choice, subject to the prior approval of the Company, which
approval shall not be unreasonably withheld, at the expense of the Company
(subject to Section 12(d) of this Agreement), to represent Indemnitee in
connection with any such matter.

 

Section 14.                                      Non-Exclusivity; Survival of
Rights; Subrogation.

 

(a)                                  The rights of indemnification and advance
of Expenses as provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled under applicable
law, the charter or Bylaws of the Company, any agreement or a resolution of the
stockholders entitled to vote generally in the election of directors or of the
Board of Directors, or otherwise.  Unless consented to in writing by Indemnitee,
no amendment, alteration or repeal of this Agreement or of any provision hereof
shall limit or restrict any right of Indemnitee under this Agreement in respect
of any action taken or omitted by such Indemnitee in [his][her] Corporate Status
prior to such amendment, alteration or repeal, regardless of whether a claim
with respect to such action or inaction is raised prior or subsequent to such
amendment, alteration or repeal.  No right or remedy herein conferred is
intended to be exclusive of any other right or remedy, and every other right or
remedy shall be cumulative and in addition to every other right or remedy given
hereunder or now or hereafter existing at law or in equity or otherwise.  The
assertion of any right or remedy hereunder, or otherwise, shall not prohibit the
concurrent assertion or employment of any other right or remedy.

 

(b)                                 In the event of any payment under this
Agreement, the Company shall be subrogated to the extent of such payment to all
of the rights of recovery of Indemnitee, who shall execute all papers required
and take all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Company to bring suit to enforce such
rights.

 

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Section 15.                                      Insurance.

 

(a)                                  The Company will use its reasonable best
efforts to acquire directors and officers liability insurance, on terms and
conditions deemed appropriate by the Board of Directors, with the advice of
counsel, covering Indemnitee or any claim made against Indemnitee by reason of
[his][her] Corporate Status and covering the Company for any indemnification or
advance of Expenses made by the Company to Indemnitee for any claims made
against Indemnitee by reason of [his][her] Corporate Status.  In the event of a
Change in Control, the Company shall maintain in force any and all directors and
officers liability insurance policies that were maintained by the Company
immediately prior to the Change in Control for a period of six years with the
insurance carrier or carriers and through the insurance broker in place at the
time of the Change of Control; provided, however, (i) if the carriers will not
offer the same policy and an expiring policy needs to be replaced, a policy
substantially comparable in scope and amount shall be obtained and (ii) if any
replacement insurance carrier is necessary to obtain a policy substantially
comparable in scope and amount, such insurance carrier shall have an AM Best
rating that is the same or better than the AM Best rating of existing insurance
carrier; provided, further, however, in no event shall the Company be required
to expend annually in excess of 250% of the annual premium or premiums paid by
the Company for directors and officers liability insurance in effect on the date
of the Change in Control.  In the event that 250% of the annual premium paid by
the Company for such existing directors and officers liability insurance is
insufficient for such coverage, the Company shall spend up to that amount to
purchase such lesser coverage as may be obtained with such amount.

 

(b)                                 Without in any way limiting any other
obligation under this Agreement, the Company shall indemnify Indemnitee for any
payment by Indemnitee arising out of the amount of any deductible or retention
and the amount of any excess of the aggregate of all judgments, penalties,
fines, settlements and Expenses incurred by Indemnitee in connection with a
Proceeding over the coverage of any insurance referred to in the previous
sentence.  The purchase, establishment and maintenance of any such insurance
shall not in any way limit or affect the rights or obligations of the Company or
Indemnitee under this Agreement except as expressly provided herein, and the
execution and delivery of this Agreement by the Company and the Indemnitee shall
not in any way limit or affect the rights or obligations of the Company under
any such insurance policies.  If, at the time the Company receives notice from
any source of a Proceeding to which Indemnitee is a party or a participant (as a
witness or otherwise) the Company has director and officer liability insurance
in effect, the Company shall give prompt notice of such Proceeding to the
insurers in accordance with the procedures set forth in the respective policies.

 

Section 16.                                      Coordination of Payments.  The
Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and
to the extent that Indemnitee has otherwise actually received such payment under
any insurance policy, contract, agreement or otherwise.

 

Section 17.                                      Contribution.  If the
indemnification provided in this Agreement is unavailable in whole or in part
and may not be paid to Indemnitee for any reason, other than for failure to
satisfy the standard of conduct set forth in Section 4 or due to the provisions
of Section 5, then, in respect to any Proceeding to which Indemnitee is a party
by reason of Indemnitee’s Corporate Status, in which the company is jointly
liable with Indemnitee (or would be if joined in such Proceeding), to the
maximum extent permissible under applicable law, the Company, in

 

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lieu of indemnifying and holding harmless Indemnitee, shall pay, in the first
instance, the entire amount incurred by Indemnitee, whether for Expenses,
judgments, penalties, and/or amounts paid or to be paid in settlement, in
connection with any Proceeding without requiring Indemnitee to contribute to
such payment, and the Company hereby waives and relinquishes any right of
contribution it may have at any time against Indemnitee.

 

Section 18.                                      Reports to Stockholders.  To
the extent required by the MGCL, the Company shall report in writing to its
stockholders the payment of any amounts for indemnification of, or advance of
Expenses to, Indemnitee under this Agreement arising out of a Proceeding by or
in the right of the Company with the notice of the meeting of stockholders of
the Company next following the date of the payment of any such indemnification
or advance of Expenses or prior to such meeting.

 

Section 19.                                      Indemnification by the
Sub-REIT.  The Sub-REIT shall indemnify, and advance Expenses to, Indemnitee to
the same extent as the Company is required to do so under this Agreement;
provided, however, that any such indemnification or advancement shall not permit
duplication of payments to Indemnitee.  The rights of Indemnitee provided in
this Section 19 are (a) without regard to whether Indemnitee is or was an
officer or director of the Sub-REIT and (b) in addition to, not in lieu of, any
rights Indemnitee may have to indemnification and expense advancement under the
MGCL, pursuant to the charter or Bylaws of the Sub-REIT or otherwise.

 

Section 20.                                      Duration of Agreement; Binding
Effect.

 

(a)                                  This Agreement shall continue until and
terminate on the later of (i) the date that Indemnitee shall have ceased to
serve as a director, officer, employee or agent of the Company or as a director,
trustee, officer, partner, manager, managing member, fiduciary, employee or
agent of any other foreign or domestic corporation, real estate investment
trust, partnership, limited liability company, joint venture, trust, employee
benefit plan or other enterprise that such person is or was serving in such
capacity at the request of the Company and (ii) the date that Indemnitee is no
longer subject to any actual or possible Proceeding, to which Indemnitee is a
party by reason of Indemnitee’s Corporate Status (including any rights of appeal
thereto and any Proceeding commenced by Indemnitee pursuant to Section 12 of
this Agreement).

 

(b)                                 The indemnification and advance of Expenses
provided by, or granted pursuant to, this Agreement shall be binding upon and be
enforceable by the parties hereto and their respective successors and assigns
(including any direct or indirect successor by purchase, merger, consolidation
or otherwise to all or substantially all of the business or assets of the
Company), shall continue as to an Indemnitee who has ceased to be a director,
officer, employee or agent of the Company or a director, trustee, officer,
partner, manager, managing member, fiduciary, employee or agent of any other
foreign or domestic corporation, partnership, limited liability company, joint
venture, trust, employee benefit plan or other enterprise that such person is or
was serving in such capacity at the request of the Company, and shall inure to
the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees,
executors and administrators and other legal representatives.

 

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(c)                                  The Company shall require and cause any
successor (whether direct or indirect by purchase, merger, consolidation or
otherwise) to all, substantially all or a substantial part, of the business
and/or assets of the Company, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place.

 

(d)                                 The Company and Indemnitee agree that a
monetary remedy for breach of this Agreement, at some later date, may be
inadequate, impracticable and difficult of proof, and further agree that such
breach may cause Indemnitee irreparable harm.  Accordingly, the parties hereto
agree that Indemnitee may enforce this Agreement by seeking injunctive relief
and/or specific performance hereof, without any necessity of showing actual
damage or irreparable harm and that by seeking injunctive relief and/or specific
performance, Indemnitee shall not be precluded from seeking or obtaining any
other relief to which Indemnitee may be entitled.  Indemnitee shall further be
entitled to such specific performance and injunctive relief, without the
necessity of posting bonds or other undertakings in connection therewith.  The
Company acknowledges that, in the absence of a waiver, a bond or undertaking may
be required of Indemnitee by a court, and the Company hereby waives any such
requirement of such a bond or undertaking.

 

Section 21.                                      Severability.  If any provision
or provisions of this Agreement shall be held to be invalid, illegal or
unenforceable for any reason whatsoever: (a) the validity, legality and
enforceability of the remaining provisions of this Agreement (including, without
limitation, each portion of any Section, paragraph or sentence of this Agreement
containing any such provision held to be invalid, illegal or unenforceable that
is not itself invalid, illegal or unenforceable) shall not in any way be
affected or impaired thereby and shall remain enforceable to the maximum extent
permitted by law; (b) such provision or provisions shall be deemed reformed to
the extent necessary to conform to applicable law and to give the maximum effect
to the intent of the parties hereto; and (c) to the maximum extent possible, the
provisions of this Agreement (including, without limitation, each portion of any
Section, paragraph or sentence of this Agreement containing any such provision
held to be invalid, illegal or unenforceable, that is not itself invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent
manifested thereby.

 

Section 22.                                      Identical Counterparts.  This
Agreement may be executed in one or more counterparts, each of which shall for
all purposes be deemed to be an original but all of which together shall
constitute one and the same Agreement.  One such counterpart signed by the party
against whom enforceability is sought shall be sufficient to evidence the
existence of this Agreement.

 

Section 23.                                      Headings.  The headings of the
paragraphs of this Agreement are inserted for convenience only and shall not be
deemed to constitute part of this Agreement or to affect the construction
thereof.

 

Section 24.                                      Modification and Waiver.  No
supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by both of the parties hereto.  No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of

 

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any other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.

 

Section 25.                                      Notices.  All notices,
requests, demands and other communications hereunder shall be in writing and
shall be deemed to have been duly given if (i) delivered by hand and receipted
for by the party to whom said notice or other communication shall have been
directed, on the day of such delivery, or (ii) mailed by certified or registered
mail with postage prepaid, on the third business day after the date on which it
is so mailed:

 

(a)                                  If to Indemnitee, to the address set forth
on the signature page hereto.

 

(b)                                 If to the Company, to:

 

NorthStar Realty Finance Corp.

399 Park Ave.

New York, NY 10022

 

Attn: General Counsel

 

or to such other address as may have been furnished in writing to Indemnitee by
the Company or to the Company by Indemnitee, as the case may be.

 

Section 26.                                      Governing Law.  This Agreement
shall be governed by, and construed and enforced in accordance with, the laws of
the State of Maryland, without regard to its conflicts of laws rules.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

 

NORTHSTAR REALTY FINANCE CORP.:

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

NRFC SUB-REIT CORP.

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

INDEMNITEE

 

 

 

 

 

 

 

Name:

 

Address:

 

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EXHIBIT A

 

AFFIRMATION AND UNDERTAKING TO REPAY EXPENSES ADVANCED

 

To:  The Board of Directors of NorthStar Realty Finance Corp. and NRFC Sub-REIT
Corp.

 

Re:  Affirmation and Undertaking

 

Ladies and Gentlemen:

 

This Affirmation and Undertaking is being provided pursuant to that certain
Indemnification Agreement dated the           day of                        , 20
     , by and between NorthStar Realty Finance Corp., a Maryland corporation
(the “Company”), NRFC Sub-REIT Corp., a Maryland corporation (the “Sub-REIT”),
and the undersigned Indemnitee (the “Indemnification Agreement”), pursuant to
which I am entitled to advance of Expenses in connection with [Description of
Proceeding] (the “Proceeding”).

 

Terms used herein and not otherwise defined shall have the meanings specified in
the Indemnification Agreement.

 

I am subject to the Proceeding by reason of my Corporate Status or by reason of
alleged actions or omissions by me in such capacity.  I hereby affirm my good
faith belief that at all times, insofar as I was involved as [a director] [an
officer] of the Company, [and [a director] [an officer] of the Sub-REIT] in any
of the facts or events giving rise to the Proceeding, I (1) did not act with bad
faith or active or deliberate dishonesty, (2) did not receive any improper
personal benefit in money, property or services and (3) in the case of any
criminal proceeding, had no reasonable cause to believe that any act or omission
by me was unlawful.

 

In consideration of the advance of Expenses by the Company for reasonable
attorneys’ fees and related Expenses incurred by me in connection with the
Proceeding (the “Advanced Expenses”), I hereby agree that if, in connection with
the Proceeding, it is established that (1) an act or omission by me was material
to the matter giving rise to the Proceeding and (a) was committed in bad faith
or (b) was the result of active and deliberate dishonesty or (2) I actually
received an improper personal benefit in money, property or services or (3) in
the case of any criminal proceeding, I had reasonable cause to believe that the
act or omission was unlawful, then I shall promptly reimburse the portion of the
Advanced Expenses relating to the claims, issues or matters in the Proceeding as
to which the foregoing findings have been established.

 

IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this
        day of                                , 20       .

 

 

 

Name:

 

 

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