Exhibit 10.35   SECOND AMENDMENT TO NOTE PURCHASE AGREEMENT AND REPURCHASE DOCUMENTS (Wachovia/NRF-Reindeer Ltd.)  THIS SECOND AMENDMENT TO NOTE PURCHASE AGREEMENT, dated as of October 28,
2009 (this Amendment No. 2), is entered into by and among NRFREINDEER LTD., a Cayman Islands exempted limited
liability company, as the seller (together with its successors and permitted
assigns, the Seller), NORTHSTAR REALTY FINANCE
CORP., a Maryland corporation, as the guarantor (together with its
successors and permitted assigns, the Guarantor), and WACHOVIA BANK, N.A. (LONDON BRANCH), as the purchaser
(together with its successors and assigns, the Purchaser), and
consented and agreed to by NRFC LUXEMBOURG HOLDINGS I
S.À R.L. (together with its successors and permitted assigns, NRFC
Luxembourg) and NRFC SUB-REIT CORP.,
as the pledgor (together with its successors and permitted assigns, the Pledgor).  Capitalized terms used and not otherwise
defined herein shall have the meanings given to such terms in the Note Purchase
Agreement (as defined below).  RE C I T A L S  WHEREAS, the Seller and the Purchaser are parties to that
certain Note Purchase Agreement, dated as of March 29, 2007, as amended by
the First Amendment to Note Purchase Agreement and Repurchase Documents, dated November 6,
2007 (Amendment No. 1) (as amended, modified, restated, replaced,
waived, substituted, supplemented or extended from time to time, including
pursuant to Amendment No. 1 and this Amendment No. 2, the Note
Purchase Agreement);  WHEREAS, the Seller desires to make certain modifications
to the Repurchase Documents;  WHEREAS, the Guarantor desires to make certain
modifications to the Guaranty Agreement and to reaffirm its obligations under
the Guaranty Agreement;  WHEREAS, NRFC Luxembourg and the Pledgor desire to consent
to the terms of this Amendment No. 2; and  WHEREAS, the Purchaser is willing to modify the Repurchase
Documents as requested by the Seller and the Guarantor on the terms and
conditions specified herein.  NOW THEREFORE, in consideration of the foregoing recitals,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto, intending to be legally bound,
agree as follows:  Section 1.Amendment
to Note Purchase Agreement.  (a)The definition of Administrative
Standard contained in Section 1 of Exhibit A to the
Note Purchase Agreement is hereby amended and restated in its entirety as
follows:  Administrative
Standard: The Purchaser acting in its sole and absolute discretion
exercised in good faith.


(b)The definition of Aggregate
Unpaids contained in Section 1 of Exhibit A to the
Note Purchase Agreement is hereby amended and restated in its entirety as
follows:  Aggregate
Unpaids:  At any time, an amount
equal to the sum of the aggregate Purchase Price outstanding for the
Transaction, the aggregate Price Differential outstanding, outstanding interest
at the Default Rate, if any, Margin Deficits, if any, Breakage Costs, if any,
Costs, if any, Increased Costs, if any, Taxes, if any, Additional Amounts, if
any, expenses payable under Subsection 8(b) and all other
amounts owed by the Seller to the Purchaser or by the Seller or any other
Person under this Agreement, the Repurchase Documents and any other document or
agreement delivered in connection with the transactions contemplated by this
Agreement or the Repurchase Documents (whether due or accrued), including, but
not limited to, any interest accruing after the occurrence of a filing of a
petition for bankruptcy by the Seller, the Guarantor, the Pledgor or NRFC
Luxembourg, regardless of whether such interest is an allowed claim under any
Insolvency Laws.  (c)The definition
of Asset Value contained in Section 1 of Exhibit A to
the Note Purchase Agreement is hereby amended and restated in its entirety as
follows:  Asset
Value: As of any date of determination for the Purchased
Items, the lesser of (1) the product of the Book Value of the
Purchased Items times the Advance Rate and (2) the product of
the Market Value of the Purchased Items times the Advance
Rate, in each case, taking into account the maximum loan to value
ratio determined by the Purchaser in its discretion; provided, however,
the Asset Value of the Purchased Items may be reduced in
the Purchasers discretion (in all cases subject to the
Administrative Standard) for any reason by an amount determined by
the Purchaser in its discretion (which amount may, in the Purchasers
discretion, be reduced to zero) with respect to the Purchased Items, including,
without limitation, (i) with respect to the Purchased Items
(including the Mortgaged Property with respect thereto), the Mortgaged
Property has deteriorated materially in value or the Mortgaged Property
and/or any applicable asset or development plan are not performing as expected
(whether related to construction progress, re-leasing, zoning, reserve
balances, servicing and any other similar situations), including, without
limitation, (A) the debt yield is less than the prior quarter (except for
known and planned events pursuant to any asset business plan), (B) the lease-up
plan or lot or condo sales differ from the original asset business plan, (C) the
debt service reserve runs out with no replenishment feature or guaranty of
interest, (D) any construction timeline greater than six (6) months
is off the initial schedule, (E) cost overruns are greater than 15% to 20%
or (F) required principal pay downs are not met, (ii) in respect of which
there is a breach of a representation or warranty set forth in Subsection
5(w) of the Agreement or in any other subsection of Section 5
(to the extent such representation or warranty relates to the
Purchased Items or the Mortgaged Property or the Purchasers rights or
remedies with respect thereto), and in each case under this clause (ii) without
regard to (A) knowledge or lack of knowledge of a breach, (B) any
qualifications (if any) to such representations and warranties based on
knowledge (regardless of how such knowledge is qualified or phrased) and (C) representations
or warranties with respect to knowledge or lack of knowledge thereof, (iii) in
respect of which the complete Asset File has not been delivered to
the Purchaser within the time periods required by the Agreement, (iv) with
respect to which a Collateral Default has occurred,  (v) with respect
to which any funding commitment, funding obligation or any other
obligation of any kind shall have been transferred to the Purchaser, (vi) for
which an Asset Document or Asset File has been released from the
possession of the Purchaser or its designee to the Seller or its
designee and the same has not been returned to the Purchaser for a period
in excess of twenty (20) calendar days, other than with the consent of
the Purchaser, (vii) any portion (including any interest that is
senior or pari passu to the Purchased Items)
has been downgraded by any Rating Agency and/or (viii) with respect
to  2


which
there has occurred any Insolvency Proceeding with respect to any Obligor
or any coparticipant or any Person having an interest in the Purchased
Items or any related Mortgaged Property which is pari passu
with, in right of payment or priority, the rights of the Purchaser in
such Purchased Items. 
Notwithstanding the foregoing or anything else contained in the
Agreement, in the case of each reduction of the Asset Value by
the Purchaser, the Purchaser shall act in accordance with the
Administrative Standard.  (d)The definition
of Asset Valuation Period is hereby added to Section 1 of Exhibit A
to the Note Purchase Agreement:  Asset
Valuation Period: As defined in clause (i) of the definition thereof
set forth in the Credit Agreement.  (e)The definition
of Bi-Annual Principal Reduction is hereby added to Section 1 of Exhibit A
to the Note Purchase Agreement:  Bi-Annual
Principal Reduction: Defined in the Credit Agreement.  (f)The definition
of Collateral Default contained in Section 1 of Exhibit A
to the Note Purchase Agreement is hereby amended and restated in its entirety
as follows:  Collateral
Default: With respect to the Note, the other Purchased Items, the Asset
Documents and the Loan, any of the foregoing (a) that is, with respect to
any default in payment of principal and/or interest, sixty (60) or more days
delinquent under the terms thereof or, with respect to any other material
payment default, seventy five (75) or more days delinquent under the terms
thereof, or (b) for which there is a material non-monetary default (beyond
any applicable notice and cure period) under the terms thereof (including, for
the avoidance of doubt, any Insolvency Proceeding or Insolvency Event) which
results in acceleration.  (g)The definition
of Credit Facility contained in Section 1 of Exhibit A
to the Note Purchase Agreement is hereby amended and restated in its entirety
as follows:  Credit
Facility: That certain facility evidenced by, among other agreements, the
First Amended and Restated Credit Agreement, dated as of October 28, 2009,
between by and among the NRFC WA Holdings, LLC, a Delaware limited liability
company, as a borrower, NRFC WA Holdings II, LLC, a Delaware limited liability
company, as a borrower, NRFC WA Holdings VII, LLC, a Delaware limited liability
company, as a borrower, NRFC WA Holdings X, LLC, a Delaware limited liability
company, as a borrower, NRFC WA Holdings XII, LLC, a Delaware limited liability
company, as a borrower, Northstar Realty Finance Corp., a Maryland corporation,
as a guarantor, Northstar Realty Finance L.P., a Delaware limited partnership,
as a guarantor, the several banks and other financial institutions as are or
may from time to time become parties to the Credit Agreement (each, together
with its successors and assigns, a Lender and collectively, the Lenders),
and Wachovia, as administrative agent for the Lenders thereunder (as amended,
modified, restated, replaced, waived, substituted, supplemented or extended
from time to time, the Credit Agreement), as such agreements are
amended, modified, restated, replaced, waived, substituted, supplemented or
extended from time to time.  (h)The definition
of Credit Parties is hereby added to Section 1 of Exhibit A
to the Note Purchase Agreement:  Credit
Parties: Defined in the Credit Agreement.  3


(i)The definition
of Extension Fee is hereby deleted in its entirety from Section 1
of Exhibit A to the Purchase Agreement.  (j)The definition
of Fixed Repurchase Date contained in Section 1 of Exhibit A
to the Note Purchase Agreement is hereby amended and restated in its entirety
as follows:  Fixed
Repurchase Date: October 28, 2012.  (k)The definition
of Guaranty Agreement contained in Section 1 of Exhibit A
to the Note Purchase Agreement is hereby amended and restated in its entirety
as follows:  Guaranty
Agreement:  That certain Guaranty
Agreement, dated as of March 29, 2007, as amended by that certain First
Amendment to Note Purchase Agreement and Repurchase Documents, dated as of November 6,
2007, and that certain Second Amendment to Note Purchase Agreement and
Repurchase Documents, dated as of October 28, 2009, executed by the
Guarantor in favor of the Purchaser, as amended, modified, restated, replaced,
waived, substituted, supplemented or extended from time to time.  (l)The definition
of Independent Director contained in Section 1 of Exhibit A
to the Note Purchase Agreement is hereby amended and restated in its entirety
as follows:  Independent
Director: A natural Person who (a) is not, at the time of initial
appointment as Independent Director, and may not have been at any time during
the five (5) years preceding such initial appointment or at any time
while serving as Independent Director, (i) a stockholder, partner, member
or direct or indirect legal or beneficial owner of the Seller, the Guarantor or
any Subsidiary or Affiliate of the foregoing; (ii) a contractor, creditor,
customer, supplier, director (with the exception of serving as the Independent
Director of the Seller), officer, employee, attorney, manager or other Person
who derives any of its purchases or revenues from its activities with the
Seller, the Guarantor or any Affiliate or Subsidiary of the foregoing; (iii) a
natural Person who controls (directly or indirectly or otherwise) the Seller,
the Guarantor or any Affiliate or Subsidiary of the foregoing or who controls
or is under common control with any Person that would be excluded from serving
as an Independent Director under (i) or (ii), above; or (iv) a member
of the immediate family of a natural Person excluded from serving as an
Independent Director under clauses (i) or (ii) above, (b) is an
employee of a nationally recognized organization that supplies independent
directors and (c) otherwise satisfies the then current requirements of the
Rating Agencies.  A Person who is an
employee of a nationally recognized organization that supplies independent
directors and who otherwise satisfies the criteria in clause (a) but
for the fact that such organization receives payment from the Seller or the
Guarantor for providing such independent director shall not be disqualified
from serving as an Independent Director hereunder.  (m)The definition
of Pricing Rate contained in Section 1 of Exhibit A
to the Note Purchase Agreement is hereby amended and restated in its entirety
as follows:  Pricing
Rate: With respect to the Note, on any date of determination, a rate per
annum equal to the sum of (a) the Rate plus (b) 350 basis
points provided, however, during the continuance of an Asset Valuation
Period, the 350 basis points set forth in clause (b) of this definition of
Pricing Rate shall be increased to 400 basis points.  4


(n)The definition
of Revolving Loan is hereby added to Section 1 of Exhibit A
to the Note Purchase Agreement:  Revolving
Loan: Defined in the Credit Agreement.  (o)The definition
of Restatement Date is hereby added to Section 1 of Exhibit A
to the Note Purchase Agreement:  Restatement
Date: October 28, 2009.  (p)The definition
of Term Loan Average Advance Rate is hereby deleted in its entirety from Section 1
of Exhibit A to the Note Purchase Agreement.  (q)The definition
of Term Loan Collateral is hereby deleted in its entirety from Section 1
of Exhibit A to the Note Purchase Agreement.  (r)Section 4(i)of the
Note Purchase Agreement is hereby amended and restated in its entirety as
follows:  If
at any time during an Asset Valuation Period the Purchaser determines (based on
such factors as the Purchaser determines to rely on its discretion, including
but not limited to a credit analysis of the Mortgaged Properties and the
current market conditions for the Note) that the Asset Value of the Note is
less than the aggregate Purchase Price outstanding (a Margin Deficit),
then the Purchaser may by notice (a Margin Deficit Notice) to the
Seller require the Seller to transfer to the Purchaser cash in such amount that
the aggregate Asset Value of the Note will thereupon equal or exceed the
aggregate Purchase Price outstanding. 
Notwithstanding anything to the contrary in this Agreement, the Seller
shall transfer such cash to the Purchasers Account no later than forty-eight
(48) hours after the Margin Deficit Notice shall be deemed to have been
received under Section 11. 
All cash transferred to the Purchaser pursuant to this Subsection 4(i) shall
be deposited in the Purchasers Account and shall be applied on account of the
Aggregate Unpaids.  The Purchasers
election, in its discretion, not to deliver a Margin Deficit Notice at any time
there is a Margin Deficit shall not in any way limit or impair its right to
deliver a Margin Deficit Notice at any time a Margin Deficit exists (including
the same or a different Margin Deficit).  (s)Section 4(k)of the
Note Purchase Agreement is hereby amended and restated in its entirety as
follows:  (k)(i) at all
times while the Bi-Annual Principal Reduction is satisfied and to the extent
the Note or other Purchased Items is repaid or prepaid in whole or part by the
underlying Obligor of the Note or other Purchased Items, the outstanding
Purchase Price for the Note or other Purchased Items is reduced for any reason
or the Seller desires to voluntarily repurchase the Note or other Purchased
Items or otherwise desires to reduce, repay or prepay the Purchase Price for
the Note or other Purchased Items in whole or in part, the Seller shall, on or
before the effective date of such repayment, prepayment, reduction or removal,
pay an amount equal to 115% multiplied by the Purchase Price (or, in the case
of partial repayments, partial prepayments or partial reductions, multiplied by
the amount of such partial repayment, partial prepayment or partial reduction)
(the Release Prepayment) for the Note or other Purchased Items, which
shall be applied as follows:  the amount
representing the fraction the numerator of which shall be 100 and the
denominator of which shall be 115 (100/115) of the Release Prepayment shall be
applied first, to the outstanding Purchase Price of the Note or other Purchased
Items, and the fraction the numerator of which shall be 15 and the denominator
of which shall be 115 (15/115) of the Release Prepayment shall  5


be
applied to the outstanding Term Loans and the Aggregate Unpaids (other than
Purchase Price) in such manner and order as the Purchaser shall determine in
its reasonable discretion and then, after payment in full of the Term Loans and
Aggregate Unpaids, to the Revolving Loans in such manner and order as the
Purchaser may determine in its reasonable discretion or (ii) at all times while
the Bi-Annual Principal Reduction is not satisfied and to the extent the Note
or other Purchased Items is repaid or prepaid in whole or part by the
underlying Obligor of the Note or other Purchased Items, the outstanding
Purchase Price for the Note or other Purchased Items is reduced for any reason
or the Seller desires to voluntarily repurchase the Note or other Purchased
Items or otherwise desires to reduce, repay or prepay the Purchase Price for
the Note or other Purchased Items in whole or in part, the Seller shall, on or
before the effective date of such repayment, prepayment, reduction or removal,
pay an amount equal to the greater of (y) the outstanding Purchase Price
(or, in the case of partial repayments, partial prepayments or partial
reductions, the amount of such partial payment, partial prepayment or partial
reduction) plus 50% of the Net Cash Proceeds received by the Seller for
any sale of the Note or other Purchased Items (such Net Cash Proceeds not to
include the amount of the outstanding Purchase Price) and (z) 125% of the
outstanding Purchase Price (or, in the case of partial repayments, partial
prepayments or partial reductions, 125% of the amount of such partial payment,
partial prepayment or partial reduction) for the Note or other Purchased Items,
which shall be applied as follows: first, to the outstanding Purchase Price,
second, to the outstanding Term Loans and the Aggregate Unpaids (other than
Purchase Price) in such manner and order as the Purchaser shall determine in
its discretion, and, third, to the outstanding Revolving Loans in such manner
and order as the Purchaser shall determine in its discretion.  Notwithstanding anything contained herein or
in the Repurchase Documents to the contrary, the Note or Purchased Items shall
not be released from the Purchasers Lien until, subject to other conditions in
the Repurchase Documents (including, but not limited to, no Events of Default
are existing) the Purchaser has received the outstanding Repurchase Price and
all other Aggregate Unpaids for the related Transaction.  (t)Section 4(l)of the
Note Purchase Agreement is hereby amended and restated in its entirety as
follows:  At
any time that the Note or any other Purchased Item is the subject of a
Collateral Default, the Seller shall transfer to the Purchaser cash such that
the aggregate Purchase Price outstanding shall equal fifty percent (50%) of the
Asset Value of the Note (determined in accordance with the definition of Asset
Value) as of the date that the Note or such other Purchased Item went into
Collateral Default (such date, the Collateral Default Date), with such
payment to be made in three equal installments, with the first installment
being due no later than the date that is twenty (20) days following the
Collateral Default Date, the second installment being due no later than the
date that is forty (40) days following the Collateral Default Date and the
third installment being due no later than the date that is sixty (60) days
following the Collateral Default Date; provided, however, if the
Purchased Item is in Collateral Default during the three (3) year period
following the Restatement Date and the aggregate Purchase Price outstanding and
the outstanding principal balance of the Term Loans and/or Aggregate Unpaids is
reduced by an amount greater than or equal to $90,000,000 prior to the date
that is three (3) years from the Restatement Date, the first installment
shall be due no later than the date that is forty (40) days following the
Collateral Default Date, the second installment shall be due no later than the
date that is eighty (80) days following the Collateral Default Date and the
third installment shall be due no later than the date that is one hundred
twenty (120) days following the Collateral Default Date; provided, further,
however, if an Event of Default occurs, the payment required under this Section 4(l) shall
be immediately due and payable.  All cash
transferred to the Purchaser pursuant to this Subsection 4(l) shall
be deposited in the Purchasers Account and shall be applied to the  6


reduction
of the outstanding Purchase Price of the Note and the other outstanding
Aggregate Unpaids.  (u)The and
appearing at the end of clause (x) of Section 6(g) is
hereby deleted, the . appearing at the end of clause (xi) of Section 6(g) is
hereby deleted and replaced with ; and and a new clause (xii) is hereby added
to Section 6(g) of the Note Purchase Agreement as follows:  (xii)Collateral Default.  Promptly upon notice or knowledge thereof
(and, in any event, within two (2) Business Days), provide written notice
to the Purchaser if the Purchased Items becomes the subject of a Collateral Default.  (v)A new Section 6(v) is
hereby added to the Note Purchase Agreement as follows:  (v)Independent Director.  The Seller and the Guarantor shall provide
the Purchaser at least ten (10) Business Days prior written notice of its
removal or replacement of any Independent Director appointed with respect to
the Seller.  The Seller and the Guarantor
shall provide the Purchaser a copy of the executed agreement with respect to
the appointment of any such Independent Director.  The identity and contact information for such
Independent Director is set forth on Schedule I attached hereto, as such
information may be updated from time to time by written notice to the
Purchaser.  (w)A new Section 6(w) is
hereby added to the Note Purchase Agreement as follows:  (w)Additional
Covenants.  In the
event that (i) the Seller, the Guarantor, the Pledgor or any other Credit
Party or any Consolidated Subsidiary of the foregoing shall incur any
additional secured Indebtedness on or after the Restatement Date, or amend the
documentation for any secured Indebtedness of the Seller, the Guarantor, the
Pledgor or any other Credit Party or any Consolidated Subsidiary of the
foregoing outstanding on or after the Restatement Date, and (ii) such
secured Indebtedness either requires or incorporates additional covenants, or
amends any covenants, of the Seller, the Guarantor, the Pledgor or any other
Credit Party or any Consolidated Subsidiary of the foregoing that (A) are
the same as or similar to the Financial Covenants (as defined in the Credit
Agreement)  or (B) require repayment
of any such secured Indebtedness from any Equity Issuance (as defined in the
Credit Agreement), any Debt Issuance (as defined in the Credit Agreement), any
sale of any non-cash consideration received in connection with an Equity
Issuance or Debt Issuance or any disposition of collateral not pledged in
connection with such other secured Indebtedness facility by the Seller, the
Guarantor, the Pledgor or any other Credit Party or any Consolidated Subsidiary
of the foregoing in such a way as to make any covenant or repayment referred to
in clauses (A) or (B) above (the Additional Covenants) more
restrictive than provided for in the Repurchase Documents or the Credit
Documents (as defined in the Credit Agreement), the Seller, the Guarantor
and the Pledgor shall promptly (but in no event later than ten (10) Business
Days thereafter) notify the Purchaser in writing of such occurrence.  If the Purchaser so elects within twenty
(20) Business Days following receipt of such notice, then such Additional
Covenants shall automatically be incorporated by reference into the
Repurchase Documents without the need for further action by any party
whatsoever.  Thereupon, the Purchaser
shall have a separate and independent right to enforce such Additional
Covenants.  The Purchaser may also elect
to amend the Repurchase Documents to incorporate such Additional
Covenants.  The Seller, the Guarantor and
the Pledgor agree to cooperate in executing such amendments to the Repurchase Documents
as the Purchaser may require in its reasonable discretion.  For the purposes of this Section, (x) the
term Credit Parties shall include NRFC SUB-REIT Corp. and (y) the term
Consolidated Subsidiaries shall not include: (1)NorthStar Corp.s Wakefield venture and
entities directly related to such venture, (2) NorthStar Real Estate
Income  7


Trust, Inc. and its Subsidiaries, NorthStar
Income Opportunity REIT I, Inc. and its Subsidiaries and any other public
entities that may be part of NorthStar Corp.s non-listed REIT initiative, (3) NorthStar
Real Estate Securities Opportunity Master Fund, L.P. and its Subsidiaries, and (4) any
other entities that may in the future be managed by NorthStar Corp. or its
Affiliates that are not majority owned, directly or indirectly, by NorthStar
Corp.   (x)The last
sentence of Subsection 8(b) to the Note Purchase Agreement is
hereby amended and restated in its entirety:  On
the Restatement Date and on each anniversary of such date, the Seller shall pay
to the Purchaser an asset management fee (Asset Management Fee) of
$5,000; provided, however, if the Seller pays all amounts due
under this Agreement and the other Repurchase Documents on the Restatement
Date, the Purchaser shall rebate the Asset Management Fee.  (y)Section 29of the Note
Purchase Agreement is hereby amended and restated in its entirety as follows:  [Reserved].  Section 2.Guaranty
Agreement.  (a)The word Limited
is hereby deleted from the title of the Limited Guaranty Agreement and
henceforth the Limited Guaranty Agreement shall be titled the Guaranty
Agreement.  (b)The Section 1
of the Guaranty Agreement is amended and restated as follows:  The
Guarantor hereby absolutely, primarily, unconditionally and irrevocably
guarantees, as primary obligor and as guarantor of payment and performance and
not merely as surety or guarantor of collection, to the Purchaser subject to
the terms of this Section 1 (i) the payment, when due, by
maturity, acceleration or otherwise, of the Guarantee Indebtedness, and (ii) the
full and timely performance of, and compliance with, each and every duty,
agreement, undertaking, indemnity and obligation of the Seller under the
Repurchase Documents strictly in accordance with the terms thereof
(collectively, the Guarantor Obligations and, together with the
Guarantee Indebtedness, the Guarantee Liabilities), in each case,
however created, arising or evidenced, whether direct or indirect, primary or
secondary, absolute or contingent, joint or several and whether now or
hereafter existing or due or to become due. 
For the purposes hereof, the term Guarantee Indebtedness means
any and all Indebtedness of the Seller or the Pledgor to the Purchaser (and any
other related Persons specified in the Repurchase Agreement) in connection with
the Repurchase Documents, including, but not limited to, the aggregate
Repurchase Price outstanding, the aggregate Price Differential outstanding and
all other Aggregate Unpaids outstanding, howsoever evidenced, whether existing
now or arising hereafter, as such Guarantee Indebtedness may be amended,
modified, extended, renewed or replaced from time to time.  For the avoidance of doubt, the Guarantors
liability for the Guarantee Liabilities is for the full amount thereof and such
Guarantee Liabilities are no longer limited to a fixed dollar amount.  Notwithstanding any provision to the contrary
contained herein or in any of the other Repurchase Documents, the obligations
of each Guarantor (if more than one) hereunder shall be limited to an aggregate
amount equal to the largest amount that would not render its obligations
hereunder subject to avoidance under Section 548 of the Bankruptcy Code or
any comparable provisions of any Applicable Law of any state.  All payments under this Guaranty shall be in
Euros.  8


Section 3.Repurchase
Documents in Full Force and Effect as Modified.  Except
as specifically modified hereby, the Repurchase Documents shall remain in full
force and effect in accordance with their terms.  All references to any Repurchase Document
shall be deemed to mean each Repurchase Document as modified by this Amendment No. 2.  This Amendment No. 2 shall not
constitute a novation of the Repurchase Documents, but shall constitute a
modification thereof.  The parties hereto
agree to be bound by the terms and conditions of the Repurchase Documents, as
modified by this Amendment No. 2, as though such terms and conditions were
set forth herein.  Section 4.Representations.  Each of the Seller, the Guarantor and the Pledgor
represents and warrants, as of the date of this Amendment No. 2, as
follows:  (a)it is duly incorporated or
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and each jurisdiction where it conducts business;  (b)the execution, delivery and
performance by it of this Amendment No. 2 is within its corporate, company
or partnership powers, has been duly authorized and does not contravene (1) its
Governing Documents or its applicable resolutions, (2) any Applicable Law or (3) any
Contractual Obligation or Indebtedness;  (c)no consent, license, permit,
approval or authorization of, or registration, filing or declaration with, any
Governmental Authority or other Person is required in connection with the execution,
delivery, performance, validity or enforceability by or against it of this
Amendment No. 2;  (d)this Amendment No. 2
has been duly executed and delivered by it;  (e)this Amendment No. 2,
as well as each of the Repurchase Documents as modified by this Amendment No. 2,
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors rights generally or by general principles of
equity;  (f)no default or Event of
Default exists or will exist after giving effect to this Amendment No. 2;  (g)each of the Repurchase
Documents is in full force and effect and neither the Seller, the Guarantor nor
the Pledgor has any defense, offset, counterclaim, abatement, right of
rescission or other claims, actions, causes of action, demands, damages or
liabilities of any kind or nature, in all cases whether legal or equitable,
available to the Seller, the Guarantor, the Pledgor or any other Person with
respect to (i) this Amendment No. 2, 
the Note Purchase Agreement, the Repurchase Documents or any other
instrument, document and/or agreement described herein or therein, as modified
and amended hereby, (ii) the obligation of the Seller and the Guarantor to
repay the Aggregate Unpaids and other amounts due under the Repurchase
Documents or (iii) the Purchaser or the Purchasers respective officers,
employees, representatives, agents, counsel or directors arising out of or from
or in any way related to or in connection with the Note Purchase Agreement or
the Repurchase Documents, including, without limitation, any action by such
Persons, or failure of such Persons to act, under the Note Purchase Agreement
or the other Repurchase Documents on or prior to the date hereof; and  9


(h)except as specifically
provided in this Amendment No. 2, the Aggregate Unpaids are not reduced or
modified by this Amendment No. 2.  Section 5.Conditions
Precedent.  The
effectiveness of this Amendment No. 2 is subject to the following
conditions precedent:  (i) delivery
to the Purchaser of this Amendment No. 2 duly executed by each of the
parties hereto; (ii) delivery of legal opinions from Paul, Hastings,
Janofsky & Walker LLP and Venable LLP with respect to the Seller and
the Guarantor; (iii) the payment of a
commitment fee in the amount of $879,848.89 to the Purchaser; (iv) the
payment of all reasonable legal fees and expenses of Moore & Van Allen
PLLC, as counsel to the Purchaser, in the amount to be set forth on a separate
invoice; and (v) such other documents, agreements or certifications as the
Purchaser may reasonably require.  Section 6.Miscellaneous.  (a)This Amendment No. 2
may be executed in any number of counterparts (including by facsimile), and by
the different parties hereto on the same or separate counterparts, each of
which shall be deemed to be an original instrument but all of which together
shall constitute one and the same agreement.  (b)The descriptive headings of
the various sections of this Amendment No. 2 are inserted for convenience
of reference only and shall not be deemed to affect the meaning or construction
of any of the provisions hereof.  (c)This Amendment No. 2
may not be amended or otherwise modified, waived or supplemented except as
provided in the Note Purchase Agreement.  (d)The interpretive provisions
of Sections 2, 3 and 4 of Exhibit A to the
Note Purchase Agreement are incorporated herein mutatis mutandis.  (e)This Amendment No. 2
represents the final agreement among the parties and may not be contradicted by
evidence of prior, contemporaneous or subsequent oral agreements between the
parties.  There are no unwritten oral
agreements between the parties.  (f)THIS
AMENDMENT NO. 2 AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AMENDMENT NO. 2 SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.  (g)Each of the Seller, the Guarantor and the Pledgor hereby ratifies the
Note Purchase Agreement and the other Repurchase Documents and acknowledges and
reaffirms (a) that it is bound by all terms of the Note Purchase Agreement
and the other Repurchase Documents applicable to it and (b) that it is
responsible for the Aggregate Unpaids and the observance and full performance
of its respective obligations under the Repurchase Documents.  (h)This Amendment No. 2 is a Repurchase Document executed pursuant to
the Note Purchase Agreement and shall be construed, administered and applied in
accordance with the terms and provisions of the Note Purchase Agreement.  (i)In consideration of the Purchaser entering into this Amendment No. 2,
each of the Seller, the Guarantor and the Pledgor hereby waives, releases and
discharges the Purchaser and the Purchasers officers, employees,
representatives, agents, counsel and directors from any and all actions, causes
of  10


action, claims, demands, damages and liabilities of
whatever kind or nature, in law or in equity, now known or unknown, suspected
or unsuspected to the extent that any of theforegoing arises out of or
from or in any way relating to or in connection with the Note Purchase
Agreement or the Repurchase Documents, including but not limited to, any action or failure to act under the Note Purchase
Agreement or the other Repurchase Documents on or prior to the date hereof,
except, with respect to any such Person being released hereby, any actions,
causes of action, claims, demands, damage and liabilities arising out of such
Persons gross negligence or willful misconduct in connection with the
Note Purchase Agreement or the other Repurchase Documents.  (j)The Guarantor (i) agrees
to and consents to the terms and provisions of this Amendment No. 2, (ii) acknowledges
and confirms that the Guaranty Agreement remains in full force and effect
notwithstanding this Amendment No. 2, and (iii) reaffirms its
obligations under the Guaranty Agreement.  (k)The Purchaser acknowledges
and agrees that, as of the Restatement Date, upon receipt of a payment in
the amount of 13,000,414.83, the aggregate Purchase Price outstanding shall be
59,541,780.31.  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]  11


IN WITNESS WHEREOF,the parties have caused
this Amendment No. 2 to be executed by their respective officers thereunto
duly authorized, as of the date first above written.  Executed
  as a deed by:THE
  SELLER:
  NRFREINDEER
  LTD.By:
  /s/
  Daniel R. GilbertName:
  Daniel
  R. GilbertTitle:
  Executive
  Vice Presidentand
  Chief Investment OfficerAddress
  for Notices:NRFReindeer
  Ltd.c/o
  Walkers SPV LtdWalker
  House, 87 Mary StreetGeorge
  Town, Grand Cayman KY19001Cayman
  IslandsAttention:
  DirectorsFacsimile
  No.:
  (345)
  9497886Confirmation
  No.:
  (345)
  9490100  [Signatures Continued on the Following Page]  S-1


THE
  PURCHASER:
  WACHOVIA
  BANK, N.A. (LONDON BRANCH)By:
  /s/
  H. Lee Goins IIIName:
  H.
  Lee Goins IIITitle:
  DirectorAddress
  for Notices:Wachovia
  Bank, N.A. (London Branch)c/o
  Wachovia Bank, National AssociationOne
  Wachovia Center, Mail Code:  NC0166301
  South College StreetCharlotte,
  North Carolina 28288Attention:
  Lee
  GoinsFacsimile
  No.:
  (704)
  7150066Confirmation
  No.:
  (704)
  3832324  [Signatures Continued on the Following Page]  S-2


GUARANTOR:
  NORTHSTAR
  REALTY FINANCE CORP.By:
  /s/
  Daniel R. GilbertName:
  Daniel
  R. GilbertTitle:
  Executive
  Vice Presidentand
  Chief Investment Officer  [Signatures Continued on the Following Page]  S-3


Consented
  and agreed to by:NRFC
  LUXEMBOURG HOLDINGS I S.À R.L.By:
  /s/
  Daniel R. GilbertName:
  Daniel
  R. GilbertTitle:
  Executive
  Vice Presidentand
  Chief Investment OfficerBy:
  /s/
  Albert TylisName:
  Albert
  TylisTitle:
  Executive
  Vice PresidentGeneral
  Counsel and Secretary  S-4


Consented
  and agreed to by:NRFC
  SUB-REIT Corp.By:
  /s/
  Daniel R. GilbertName:
  Daniel
  R. GilbertTitle:
  Executive
  Vice Presidentand
  Chief Investment Officer  S-5


Schedule
I  Independent
Director  Identity
  
  Contact
  InformationJennifer A. Schwartz
  
  CT Corporation System
  1209 Orange Street
  Wilmington DE 19801
  T 877-428-3477
  F
  302-658-5459
  Jennifer.schwartz@wolterskluwer.com
  Vic.duva@wolterskluwer.com