Exhibit 4.2


 


THIS GLOBAL NOTE
IS HELD BY THE DEPOSITARY (AS DEFINED IN THE SUPPLEMENTAL INDENTURE GOVERNING
THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT
THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
REQUIRED PURSUANT TO SECTION 2.06 OF THE SUPPLEMENTAL INDENTURE, (II) THIS
GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF
THE SUPPLEMENTAL INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED
TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE
SUPPLEMENTAL INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED
TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.




 







 







	
   

  	
   

  	
   

  	
   

  	
  CUSIP 45031UBG5

  
	
   

  	
   

  	
  8.625% Senior
  Notes due 2013

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  No. 1

  	
   

  	
   

  	
   

  	
  $750,000,000

  
	
   

  	
   

  	
  iSTAR FINANCIAL
  INC.

  	
   

  	
   

  






 


promises to pay to CEDE & CO., or registered
assigns, the principal sum of SEVEN HUNDRED AND FIFTY MILLION on June 1,
2013.


 


Interest Payment
Dates: June 1 and December 1


 


Record Dates:  May 15 and November 15


 


Dated:  May 21, 2008


 


	
   

  	
  iSTAR FINANCIAL
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jay Sugarman

  
	
   

  	
   

  	
  Name:

  	
  Jay Sugarman

  
	
   

  	
   

  	
  Title:

  	
  Chairman &
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Catherine D.
  Rice

  
	
   

  	
   

  	
  Name:

  	
  Catherine D.
  Rice

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial
  Officer

  



 


SEAL


 


This is one of the
Notes referred to

in the within-mentioned Supplemental Indenture:




U.S. BANK TRUST
NATIONAL ASSOCIATION


as Trustee


 


 


	
  By: 

  	
  /s/ Gagendra
  Hiralal

  	
   

  
	
   

  	
  Authorized
  Signatory

  



 

















 


8.625% Senior Notes
due 2013


 


Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.


 


1.  INTEREST.  iStar Financial Inc., a Maryland corporation
(the “Company”), promises to pay interest on
the principal amount of this note at 8.625% per annum from May 21, 2008
until Maturity.  The Company will pay
interest semi-annually in arrears on June 1 and December 1 of each
year, or if any such day is not a Business Day, on the next succeeding Business
Day (each an “Interest Payment Date”).  Interest on the notes will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from May 21, 2008; provided that
if there is no existing default in the payment of interest, and if this note is
authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided, further,
that the first Interest Payment Date shall be December 1, 2008. The
Company shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal and premium, if any, from
time to time on demand at the rate then in effect; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy
Law) on overdue installments of interest (without regard to any applicable
grace periods) from time to time on demand at the same rate to the extent
lawful.  Interest will be computed on the
basis of a 360-day year of twelve 30-day months.  If any
Interest Payment Date on the Notes other than the maturity date is not a
Business Day, such Interest Payment Date will be postponed to the next
succeeding Business Day. If the maturity date of the Notes falls on a day that
is not a Business Day, the required payment of principal and interest will be
made on the next succeeding Business Day as if made on the date such payment
was due, and no interest will accrue on such payment for the period from and
after the maturity date to the date of such payment on the next succeeding
Business Day.


 


2.  METHOD OF
PAYMENT.  The Company will pay
interest on the Notes (except defaulted interest) to the Persons who are
registered Holders of Notes at the close of business on the May 15 or November 15
next preceding the Interest Payment Date, even if such Notes are canceled after
such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted
interest.  The Notes will be payable as
to principal, premium, if any, and interest at the office or agency of the
Company maintained for such purpose within or without the City and State of New
York, or, at the option of the Company, payment of interest may be made by
check mailed to the Holders at their addresses set forth in the register of
Holders, and provided that payment by wire
transfer of immediately available funds will be required with respect to
principal of and interest, and premium, if any, on, all Global Notes and all
other Notes the Holders of which shall have provided wire transfer instructions
to the Company or the Paying Agent.  Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private
debts.  The Company reserves the right to
pay interest to Holders of Notes by check mailed to such Holders at their
registered addresses or by wire transfer to Holders of at least $5 million
aggregate principal amount of Notes.


 


3.  PAYING AGENT
AND REGISTRAR.  Initially, U.S.
Bank Trust National Association, the Trustee under the Indenture, will act as
Paying Agent and Registrar.  The Company
may change any Paying Agent or Registrar without notice to any Holder.  The Company or any of its Subsidiaries may
act in any such capacity.


 


4.  INDENTURE.  The Company issued the Notes under an
Indenture dated as of February 5, 2001, as amended and supplemented,
including as supplemented by a Supplemental Indenture dated as of 


 

















 


May 21, 2008
(collectively, the “Indenture”)
between the Company and the Trustee.  The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code §§ 77aaa-77bbbb).  The
Notes are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of such terms. 
To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and
be controlling.  The Notes are
obligations of the Company.  The Company
is issuing $750.0 million in aggregate principal amount on the Issue Date and
may issue Additional Notes in accordance with the terms of the Indenture.


 


5.  OPTIONAL
REDEMPTION.  The Notes may be
redeemed or purchased in whole or in part at the Company’s option at any time
prior to the maturity date of the Notes at a price equal to 100% of the
principal amount thereof plus the Applicable Premium as of, and accrued but
unpaid interest, if any, to the date of the redemption or purchase (the “Redemption Date”) (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
Interest Payment Date).


 


“Applicable Premium”
means, with respect to the Notes, at any Redemption Date, the greater of:  (1) 1.0% of the principal amount of such
Note; and (2) the excess of (a) the present value at such Redemption
Date of (i) the principal amount of such Note on the Redemption Date plus (ii) all
required remaining scheduled interest payments due on such Note through June 1,
2013 computed using a discount rate equal to the Treasury Rate plus 50 basis
points over (b) the outstanding principal amount of such Note on such
Redemption Date.  Calculation of the
Applicable Premium will be made by the Company or on behalf of the Company by
such Person as the Company shall designate; provided, however,
that such calculation shall not be a duty or obligation of the Trustee.


 


“Treasury Rate”
means, with respect to a Redemption Date, the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15(519) that has become publicly available on the third Business Day
prior to our providing notice of redemption (or, if such Statistical Release is
no longer published, any publicly available source of similar market
data)) most nearly equal to the period from such Redemption Date to the
maturity date; provided, however, that if the
period from such Redemption Date to the maturity date is not equal to the
constant maturity of the United States Treasury security for which a weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the
weekly average yields of United States Treasury securities for which such
yields are given, except that if the period from such Redemption Date to the
maturity date is less than one year, the weekly average yield on actually
traded United States Treasury securities adjusted to a constant maturity of one
year shall be used.


 


6.  MANDATORY REDEMPTION.  Except as set forth in paragraph 7, the
Company shall not be required to make mandatory redemption payments with
respect to the Notes.


 


7.  REPURCHASE OF OPTION OF
HOLDER.  Upon the occurrence
of a Change of Control Triggering Event, the Company will be required to offer
to purchase all of the outstanding Notes at a principal price equal to 101% of
the principal amount thereof, plus accrued and unpaid interest, if any, thereon
to the date of purchase.


 


8.  NOTICE OF REDEMPTION.  Notice of redemption will be mailed at least
30 days but not more than 60 days before the Redemption Date to each Holder
whose Notes are to be redeemed at its registered address.  Notes in denominations larger than $1,000 may
be redeemed in part but only in whole multiples of $1,000, unless all of the
Notes held by a Holder are to be redeemed. 
On and after the Redemption Date interest ceases to accrue on Notes or
portions thereof called for redemption.


 

















 


9.  DENOMINATIONS, TRANSFER,
EXCHANGE.  The Notes are in
registered form without coupons in denominations of $2,000 and integral
multiples of $1,000.  The transfer of
Notes may be registered and Notes may be exchanged as provided in the
Indenture.  The Registrar and the Trustee
may require a Holder, among other things, to furnish appropriate endorsements
and transfer documents and the Company and the Trustee may require a Holder to
pay any taxes and fees required by law or permitted by the Indenture.  The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part.  Also, the Company need not exchange or
register the transfer of any Notes for a period of 15 days before a selection
of Notes to be redeemed or during the period between a record date and the corresponding
Interest Payment Date.


 


10.  PERSONS DEEMED OWNERS.  The registered Holder of a Note may be
treated as its owner for all purposes.


 


11.  AMENDMENT, SUPPLEMENT AND
WAIVER.  Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
written consent of the Holders of at least a majority in principal amount of
the then outstanding Notes voting as a single class, and any existing Default
or compliance with any provision of the Indenture or the Notes may be waived
with the written consent of the Holders of a majority in principal amount of
the then outstanding Notes voting as a single class.  Without the consent of any Holder of a Note,
the Indenture or the Notes may be amended or supplemented to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Notes in addition to or
in place of certificated Notes, to provide for the assumption of the Company’s
obligations to Holders of the Notes in case of a merger or consolidation, to
make any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect in any material respects
the rights under the Indenture of any such Holder, to comply with the
requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the Trust Indenture Act or to evidence and provide for the
acceptance of appointment under the Indenture of a successor Trustee.


 


12.  DEFAULTS AND REMEDIES.  Events of Default are set forth in the
Indenture.  If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable.  Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, all outstanding Notes will become due and payable
without further action or notice. 
Holders may not enforce the Indenture or the Notes except as provided in
the Indenture.  Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in writing in its exercise of any trust or
power.  The Trustee may withhold from
Holders of the Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal or
interest) if it determines that withholding notice is in their
interest.  The Holders of a majority in
aggregate principal amount of the Notes then outstanding by written notice to
the Trustee may on behalf of the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of interest on, or the
principal of, the Notes.  The Company is
required to deliver to the Trustee annually a statement regarding compliance
with the Indenture, and the Company is required upon becoming aware of any
Default or Event of Default, to deliver to the Trustee a statement specifying
such Default or Event of Default.


 


13.  TRUSTEE DEALINGS WITH
COMPANY.  The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not the Trustee.


 

















 


14.  NO RECOURSE AGAINST OTHERS.  A director, officer, employee, incorporator
or stockholder, of the Company, as such, shall not have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their
creation.  Each Holder by accepting a
Note waives and releases all such liability. 
The waiver and release are part of the consideration for the issuance of
the Notes.


 


15.  AUTHENTICATION.  This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.


 


16.  ABBREVIATIONS.  Customary abbreviations may be used in the
name of a Holder or an assignee, such as: 
TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT
TEN (= joint tenants with right of survivorship and not as tenants in common),
CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).


 


17.  CUSIP
NUMBERS.  Pursuant to a
recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP numbers to be printed on the Notes and
the Trustee may use CUSIP numbers in notices of redemption as a convenience to
Holders.  No representation is made as to
the accuracy of such numbers either as printed on the Notes or as contained in
any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.


 

















 


The Company will furnish to any Holder upon written
request and without charge a copy of the Indenture.  Requests may be made to:


 


iStar Financial
Inc.


1114 Avenue of the
Americas, 39th Floor


New York, NY 10036


Attention:  Investor Relations


 

















 


ASSIGNMENT FORM


 


	
  To assign this Note, fill in the form below:

  
	
   

  
	
  (I) or
  (we) assign and transfer this Note to:

  	
   

  	
   

  
	
   

  	
  (Insert
  assignee’s legal name)

  	
   

  
	
   

  	
   

  	
   

  
	
  (Insert
  assignee’s soc. sec. or tax I.D. no.)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Print or type
  assignee’s name, address and zip code)

  
	
  and irrevocably appoint

  	
   

  	
   

  
	
  to transfer this
  Note on the books of the Company. The agent may substitute another to act for
  him.

  
	
  Date:

  	
   

  	
   

  
	
  Your Signature:

  	
   

  	
   

  
	
   

  	
  (Sign exactly as
  your name appears on the face of this Note)

  
	
   

  	
   

  
	
  Signature
  Guarantee*:

  	
   

  	
   

  	
   

  
									



 


*              Participant in a recognized
Signature Guarantee Medallion Program (or other signature guarantor acceptable
to the Trustee).


 

















 


OPTION OF HOLDER
TO ELECT PURCHASE


 


If you want to elect to have this Note purchased by
the Company pursuant to Section 4.10 of the Indenture, check the following
box:  o


 


If you want to elect to have only part of the Note
purchased by the Company pursuant to Section 4.10 of the Indenture, state
the amount you elect to have purchased.


 


	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
  Your Signature:

  	
   

  	
   

  
	
   

  	
   

  	
  (Sign exactly as
  your name appears on the face of this Note)

  
	
   

  	
   

  
	
   

  	
  Tax
  Identification No.:

  	
   

  	
   

  
	
   

  
	
  Signature
  Guarantee*:

  	
   

  	
   

  
											



 


*              Participant in a recognized
Signature Guarantee Medallion Program (or other signature guarantor acceptable
to the Trustee).


 

















 


SCHEDULE OF
EXCHANGES OF INTERESTS IN THE GLOBAL NOTE


 


The following exchanges of a part of this Global Note
for an interest in another Global Note or for a Definitive Note, or exchanges
of a part of another Global Note or Definitive Note for an interest in this
Global Note, have been made:


 


	
  Date of Exchange

  	
   

  	
  Amount of 

  decrease in 

  Principal Amount 

  of this Global Note

  	
   

  	
  Amount of 

  increase in 

  Principal Amount 

  of this Global Note

  	
   

  	
  Principal Amount 

  of this Global Note

   following such 

  decrease 

  (or increase)

  	
   

  	
  Signature of 

  authorized officer

   of Trustee or Note 

  Custodian