Exhibit 10.38  AMENDED
AND RESTATED
GUARANTEE AGREEMENT  AMENDED
AND RESTATED GUARANTEE AGREEMENT, dated as of October 7, 2008 (as amended,
restated, supplemented, or otherwise modified from time to time, this Guarantee),
made by NORTHSTAR REALTY FINANCE CORP., aMaryland corporation, having
its principal place of business at 399
Park Avenue, 18th Floor, New York, New York  10022(the
Guarantor), in favor of the Buyer referred to below.  RECITALS  Pursuant
to that certain Master Repurchase Agreement, dated as of August 8, 2007
(as amended, supplemented or otherwise modified from time to time, the Existing
Repurchase Agreement), among JP Morgan Chase Bank, N.A. (as the Buyer)
and NRFC JP HOLDINGS, LLC (the Seller), the Seller has agreed to sell,
from time to time, to the Buyer certain Senior Mortgage Loans, Construction
Loans, B-Notes/Junior Interests, Mezzanine Loans, Condo
Conversion Loans, CMBS, CRE CDO and Land Loans, each as defined in the Existing
Repurchase Agreement (collectively, the Purchased Assets), upon the
terms and subject to the conditions as set forth therein.  Pursuant to the terms of that certain
Custodial Agreement dated August 8, 2007 (the Custodial Agreement)
by and between the Buyer, the Seller and Wells Fargo Bank, N.A. (the Custodian),
the Custodian is required to take possession of the Purchased Assets, along
with certain other documents specified in the Custodial Agreement, as the
Custodian of the Buyer and any future purchaser, on several delivery dates, in
accordance with the terms and conditions of the Custodial Agreement.  The Existing Repurchase Agreement, the
Custodial Agreement, this Guarantee and any other agreements executed in
connection with the Repurchase Agreement and the Custodial Agreement shall be
referred to herein as the Governing Agreements.  In
connection with the Existing Repurchase Agreement, the Guarantor entered into
in favor of the Buyer that certain Guarantee Agreement, dated as of August 8,
2007 (the Existing Guarantee). 
The Existing Repurchase Agreement is being amended by that certain
Amendment No. 1 to Master Repurchase Agreement, of even date herewith (Repurchase
Agreement).  It is
a condition precedent to the purchasing by the Buyer of the Purchased Assets
pursuant to the Repurchase Agreement that the Guarantor shall have executed and
delivered this Guarantee with respect to the due and punctual payment and
performance when due, whether at stated maturity, by acceleration or otherwise,
of all of the following: (a) all payment obligations owing by the Seller
to the Buyer under or in connection with the Repurchase Agreement and any other
Governing Agreements; (b) any and all extensions, renewals, modifications,
amendments or substitutions of the foregoing; (c) all expenses, including,
without limitation, reasonable attorneys fees and disbursements, that are
incurred by the Buyer in the enforcement of any of the foregoing or any
obligation of the Guarantor hereunder; and (d) any other obligations of the
Seller with respect to the Buyer under each of the Governing Agreements (collectively,
the Obligations).


NOW,
THEREFORE, in consideration of the foregoing, to induce the Buyer to enter into
the Governing Agreements and to enter into the transactions contemplated
thereunder, the Guarantor hereby agrees with the Buyer, as follows:  1.             Defined Terms.  Unless otherwise defined herein, terms which
are defined in the Repurchase Agreement and used herein are so used as so
defined.  2.             Guarantee.  (a)  The Guarantor hereby
unconditionally and irrevocably guarantees to the Buyer the prompt and complete
payment and performance of the Obligations by the Seller when due (whether at
the stated maturity, by acceleration or otherwise), as the case may be, and
agrees to indemnify and hold harmless the Buyer from any and all claims,
damages, losses, liabilities, costs and expenses that may be incurred by or
asserted or awarded against the Buyer, in each case relating to or arising out
of the Obligations, as the case may be.  (b)           The Guarantor
further agrees to pay any and all reasonable expenses (including, without
limitation, all reasonable fees and disbursements of counsel) which may be paid
or incurred by the Buyer in enforcing, or obtaining advice of counsel in
respect of, any rights with respect to, or collecting, any or all of the
Obligations and/or enforcing any rights with respect to, or collecting against,
the Guarantor under this Guarantee.  This
Guarantee shall remain in full force and effect until the later of (i) the
date upon which the Obligations are paid in full and (ii) the termination
of the Repurchase Agreement, notwithstanding that from time to time prior
thereto the Seller may be free from any Obligations.  (c)           No payment or
payments made by the Seller or any other Person or received or collected by the
Buyer from the Seller or any other Person by virtue of any action or proceeding
or any set-off or appropriation or application, at any time or from time to
time, in reduction of or in payment of the Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of the Guarantor
hereunder which shall, notwithstanding any such payment or payments, remain
liable for the amount of the Obligations under this Agreement until the
Obligations are paid in full.  (d)           The Guarantor agrees
that whenever, at any time, or from time to time, the Guarantor shall make any
payment to the Buyer on account of any liability hereunder, the Guarantor will
notify the Buyer in writing that such payment is made under this Guarantee for
such purpose.  3.             Subrogation.  Upon making any payment hereunder, the
Guarantor shall be subrogated to the rights of the Buyer against the Seller and
any collateral for any Obligations with respect to such payment; provided, that
Guarantor shall not seek to enforce any right or receive any payment by way of
subrogation until all amounts due and payable by the Seller to the Buyer under
the Governing Agreements or any related documents have been paid in full;
provided, further, that such subrogation rights shall be subordinate in all
respects to all amounts owing to the Buyer under the Governing Agreements.  4.             Amendments, etc. with Respect to
the Obligations.  The Guarantor shall
remain obligated hereunder notwithstanding that, without any reservation of
rights against the Guarantor, and without notice to or further assent by the Guarantor,
any demand for payment of  2


any of the Obligations made by the Buyer may
be rescinded by the Buyer and any of the Obligations continued, and the Obligations,
or the liability of any other party upon or for any part thereof, or any
collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Buyer, and any Governing Agreement and any other document in connection
therewith may be amended, modified, supplemented or terminated, in whole or in
part, as the Buyer may deem advisable from time to time, and any collateral
security, guarantee or right of offset at any time held by the Buyer for the
payment of the Obligations may be sold, exchanged, waived, surrendered or
released.  The Buyer shall have no obligation
to protect, secure, perfect or insure any lien at any time held by it as
security for the Obligations or for this Guarantee or any property subject
thereto.  When making any demand
hereunder against the Guarantor, the Buyer may, but shall be under no obligation
to, make a similar demand on the Seller or any other Person, and any failure by
the Buyer to make any such demand or to collect any payments from the Seller or
any such other Person or any release of the Seller or such other Person shall
not relieve the Guarantor of its Obligations or liabilities hereunder, and
shall not impair or affect the rights and remedies, express or implied, or as a
matter of law, of the Buyer against the Guarantor.  For the purposes hereof demand shall
include the commencement and continuance of any legal proceedings.  5.             Guarantee Absolute and
Unconditional.  (a)  The
Guarantor hereby agrees that its obligations under this Guarantee constitute a
guarantee of payment when due and not of collection.  The Guarantor waives any and all notice of the
creation, renewal, extension or accrual of any of the Obligations and notice of
or proof of reliance by the Buyer upon this Guarantee or acceptance of this
Guarantee; the Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred in reliance upon this Guarantee; and
all dealings between the Seller or the Guarantor, on the one hand, and the
Buyer, on the other hand, shall likewise be conclusively presumed to have been
had or consummated in reliance upon this Guarantee.  The Guarantor waives promptness, diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Seller or the Guarantee with respect to the Obligations.  This Guarantee shall be construed as a
continuing, absolute and unconditional guarantee of payment without regard to (i) the
validity, regularity or enforceability of any agreement, any of the Obligations
or any collateral security therefor or guarantee or right of offset with
respect thereto at any time or from time to time held by the Buyer, (ii) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the Seller
against the Buyer, (iii) any requirement that the Buyer exhaust any right
to take any action against the Seller or any other Person prior to or
contemporaneously with proceeding to exercise any right against the Guarantor
under this Guarantee or (iv) any other circumstance whatsoever (with or
without notice to or knowledge of the Seller or the Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Seller for the Obligations or of the Guarantor under this
Guarantee, in bankruptcy or in any other instance.  When pursuing its rights and remedies
hereunder against the Guarantor, the Buyer may, but shall be under no
obligation, to pursue such rights and remedies that the Buyer may have against the
Seller or any other Person or against any collateral security or guarantee for
the Obligations or any right of offset with respect thereto, and any failure by
the Buyer to pursue such other rights or remedies or to collect any payments
from the Seller or any such other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any release
of the Seller or any such other Person or any such  3


collateral security, guarantee or right of
offset, shall not relieve the Guarantor of any liability hereunder, and shall
not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Buyer against the Guarantor.  This Guarantee shall remain in full force and
effect and be binding in accordance with and to the extent of its terms upon each
Guarantor and its respective successors and assigns thereof, and shall inure to
the benefit of the Buyer, and its respective successors, endorsees, transferees
and assigns, until all the Obligations and the obligations of the Guarantor
under this Guarantee shall have been satisfied by payment in full,
notwithstanding that from time to time during the term of the Governing
Agreements the Seller may be free from any Obligations.  (b)           Without limiting the
generality of the foregoing, the Guarantor hereby agrees, acknowledges, and
represents and warrants to the Buyer as follows:  (i)            The Guarantor
hereby waives any defense arising by reason of, and any and all right to assert
against the Buyer any claim or defense based upon, an election of remedies by the
Buyer which in any manner impairs, affects, reduces, releases, destroys and/or
extinguishes the Guarantors subrogation rights, rights to proceed against the
Seller, or any other guarantor for reimbursement or contribution, and/or any
other rights of the Guarantor to proceed against the Seller against any other
guarantor, or against any other person or security.  (ii)           The Guarantor is
presently informed of the financial condition of the Seller and of all other
circumstances which diligent inquiry would reveal and which bear upon the risk
of nonpayment of the Obligations.  The
Guarantor hereby covenants that it will make its own investigation and will continue
to keep itself informed about the Sellers financial condition, the status of
other guarantors, if any, of all other circumstances which bear upon the risk
of nonpayment and that it will continue to rely upon sources other than the
Buyer for such information and will not rely upon the Buyer for any such
information.  Absent a written request
for such information by the Guarantor to the Buyer, the Guarantor hereby waives
the right, if any, to require the Buyer to disclose to Guarantor any
information which the Buyer may now or hereafter acquire concerning such
condition or circumstances including, but not limited to, the release of or
revocation by any other guarantor.  (iii)          The Guarantor has
independently reviewed the Governing Agreements and related agreements and has
made an independent determination as to the validity and enforceability
thereof, and in executing and delivering this Guarantee to the Buyer, the
Guarantor is not in any manner relying upon the validity, and/or
enforceability, and/or attachment, and/or perfection of any liens or security
interests of any kind or nature granted by the Seller or any other guarantor to
the Buyer, now or at any time and from time to time in the future.  6.             Reinstatement.  This Guarantee shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by the Buyer upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Seller or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer  4


for, the Seller or any substantial part of the
Sellers property, or otherwise, all as though such payments had not been made.  7.             Payments.  The Guarantor hereby agrees that the Obligations
will be paid to the Buyer without set-off or counterclaim in U.S. Dollars at
the address specified in writing by the Buyer.  8.             Representations and Warranties.  The Guarantor represents and warrants that:  (a)           The Guarantor has
the legal capacity and the legal right to execute and deliver this Guarantee
and to perform its obligations hereunder;  (b)           no consent or
authorization of, filing with, or other act by or in respect of, any arbitrator
or governmental authority and no consent of any other Person (including,
without limitation, any creditor of the Guarantor) is required in connection
with the execution, delivery, performance, validity or enforceability of this
Guarantee;  (c)           this Guarantee has
been duly executed and delivered by the Guarantor and constitutes a legal,
valid and binding obligation of the Guarantor enforceable in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors rights generally and by general principles of equity (whether
enforcement is sought in proceedings in equity or at law);  (d)           the execution,
delivery and performance of this Guarantee will not violate any law, treaty, rule
or regulation or determination of an arbitrator, a court or other governmental
authority, applicable to or binding upon the Guarantor or any of its property
or to which the Guarantor or any of its property is subject (Requirement of
Law), or any provision of any security issued by the Guarantor or of any
agreement, instrument or other undertaking to which the Guarantor is a party or
by which it or any of its property is bound (Contractual Obligation),
and will not result in or require the creation or imposition of any lien on any
of the properties or revenues of the Guarantor pursuant to any Requirement of
Law or Contractual Obligation of the Guarantor;  (e)           no litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority is pending or, to the knowledge of Guarantor, threatened by or
against the Guarantor or against any of the Guarantors properties or revenues
with respect to this Guarantee or any of the transactions contemplated hereby;
and  (f)            except as disclosed
in writing to the Buyer prior to the date hereof, the Guarantor has filed or
caused to be filed all tax returns which, to the knowledge of the Guarantor,
are required to be filed and has paid all taxes shown to be due and payable on
said returns or on any assessments made against him or any of the Guarantors
property and all other taxes, fees or other charges imposed on him or any of the
Guarantors property by any Governmental Authority (other than any the amount or
validity of which are currently being contested in good faith by appropriate
proceedings); no tax lien has been filed, and, to the knowledge of the
Guarantor, no claim is being asserted, with respect to any such tax, fee or
other charge.  5


The
Guarantor agrees that the foregoing representations and warranties shall be
deemed to have been made by the Guarantor on the date of each Transaction under
the Repurchase Agreement, on and as of such date of the Transaction, as though
made hereunder on and as of such date.  9.             Severability.  Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.  10.           Paragraph Headings.  The paragraph headings used in this Guarantee
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.  11.           No Waiver; Cumulative Remedies.  The Buyer shall not by any act (except by a
written instrument pursuant to paragraph 13 hereof), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any default or event of default or in any breach of any
of the terms and conditions hereof.  No
failure to exercise, nor any delay in exercising, on the part of the Buyer, any
right, power or privilege hereunder shall operate as a waiver thereof.  No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.  A waiver by the Buyer of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Buyer would otherwise have on any future occasion.  The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of
any rights or remedies provided by law.  12.           Waivers and Amendments; Successors
and Assigns; Governing Law.  None of
the terms or provisions of this Guarantee may be waived, amended, supplemented
or otherwise modified except by a written instrument executed by the Guarantor
and the Buyer.  This Guarantee shall be
binding upon the heirs, personal representatives, successors and assigns of the
Guarantor and shall inure to the benefit of the Buyer, and their respective
successors and assigns.  THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.  13.           Notices.  Notices by the Buyer to the Guarantor may be
given by mail, or by telecopy transmission, addressed to the Guarantor at the
address or transmission number set forth under its signature below and shall be
effective (a) in the case of mail, five days after deposit in the postal
system, first class certified mail and postage pre-paid, (b) one Business
Day following timely delivery to a nationally recognized overnight courier
service for next Business Day delivery and (c) in the case of telecopy
transmissions, when sent, transmission electronically confirmed.  14.           SUBMISSION TO JURISDICTION;
WAIVERS.  THE GUARANTOR HEREBY
IRREVOCABLY AND UNCONDITIONALLY:  6


(A)          SUBMITS FOR THE
GUARANTORS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
GUARANTEE AND THE OTHER LOAN DOCUMENTS TO WHICH THE GUARANTOR IS A PARTY, OR
FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE
NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE
COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND APPELLATE COURTS FROM ANY THEREOF;  (B)           CONSENTS THAT ANY
SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY
OBJECTION THAT GUARANTOR MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS
BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;  (C)           AGREES THAT SERVICE
OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY
THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF
MAIL), POSTAGE PREPAID, TO THE GUARANTOR AT ITS ADDRESS SET FORTH UNDER THE
GUARANTORS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH THE BUYER SHALL
HAVE BEEN NOTIFIED; AND  (D)          AGREES THAT NOTHING
HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION.  15.           Integration.  This Guarantee represents the agreement of the
Guarantor with respect to the subject matter hereof and there are no promises
or representations by the Buyer relative to the subject matter hereof not
reflected herein.  16.           Acknowledgments.  The Guarantor hereby acknowledges that:  (a)           the
Guarantor has been advised by counsel in the negotiation, execution and
delivery of this Guarantee and the related documents;  (b)           the Buyer has no
fiduciary relationship to the Guarantor, and the relationship between the Buyer
and the Guarantor is solely that of surety and creditor; and  (c)           no joint venture
exists between or among any of the Buyer, the Guarantor and the Seller.  17.           Amendment and Restatement.  The Existing Guarantee is amended, restated
and superceded in its entirety by this Guarantee.  The Guarantor confirms and agrees that it has
no, and it hereby waives all, defenses, rights of setoff, claims, counterclaims
or causes of action of any kind or description against Buyer arising under or
in respect of the Existing Guarantee or any related document and the Guarantor
hereby confirms, as of the date hereof, that Buyer is in full compliance with
all of its undertakings and obligations under the Governing Agreements.  7


18.           WAIVERS OF JURY TRIAL.  EACH OF THE GUARANTOR AND THE BUYER HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS GUARANTEE OR ANY RELATED DOCUMENT AND FOR ANY
COUNTERCLAIM HEREIN OR THEREIN.  [SIGNATURES COMMENCE ON THE FOLLOWING PAGE]  8


IN
WITNESS WHEREOF, the undersigned has caused this Guarantee Agreement to be duly
executed and delivered as of the date first above written.   NORTHSTAR REALTY
  FINANCE CORP.By:
  /s/ Albert TylisName: Albert TylisTitle:
  Executive Vice President, General Counsel &
  Secretary