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/CINS 45031UAC5


 


6.5% Senior Notes due 2013


 


	
  No. 01

  	
   

  	
   

  	
  $

  	
  150,000,000

  



 


 


iSTAR FINANCIAL INC.


 


promises to pay to CEDE & CO., or registered assigns, the principal
sum of ONE HUNDRED FIFTY MILLION Dollars on December 15, 2013.


 


Interest Payment Dates: 
June 15 and December 15


 


Record Dates:  June 1 and
December 1


 


Dated:  December 12, 2003


 


	
   

  	
  iSTAR FINANCIAL INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jay Sugarman

  
	
   

  	
   

  	
  Name:

  	
  Jay Sugarman

  
	
   

  	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Catherine Rice

  
	
   

  	
   

  	
  Name:

  	
  Catherine Rice

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  



 


SEAL


 


This is one of the Notes referred to

in the within-mentioned Supplemental Indenture:




	
  US BANK
  TRUST NATIONAL ASSOCIATION

  as Trustee

  
	
   

  
	
  By:

  	
  /s/ Angelità Pena

  	
   

  
	
   

  	
  Authorized Signatory

  



 

















 


        6.5%
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 6.5% per annum
from December 12, 2003 until maturity. 
The Company will pay interest semi-annually in arrears on June 15
and December 15 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 December 12, 2003; 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 June 15, 2004.  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.


 


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 June 1 or
December 1 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, US
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
December 12, 2003 (collectively, the “Indenture”) between the Company


 


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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 $150.0 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.


 


(a)                                  Optional Redemption.  Beginning December 15, 2008, the
Company may redeem the Notes, in whole at any time, or in part from time to
time, for cash, upon not less than 30 nor more than 60 days’ notice. If the
Notes are redeemed during the twelve-month period commencing on
December 15 of any of the years indicated below, the redemption price will
equal the percentage of the principal amount of the redeemed Notes shown
opposite that year, plus accrued and unpaid interest to the applicable
redemption date:


 


	
  Year

  	
   

  	
  Redemption
  Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2008

  	
   

  	
  103.250

  	
  %

  
	
  2009

  	
   

  	
  102.167

  	
  %

  
	
  2010

  	
   

  	
  101.083

  	
  %

  
	
  2011 and
  thereafter

  	
   

  	
  100.000

  	
  %

  



 


(b)                                 Optional Redemption Upon Equity
Offerings.  At any time, or
from time to time, on or prior to December 15, 2006, the Company may, at
its option, use the net cash proceeds of one or more Equity Offerings to redeem
up to 35% of the principal amount of the Notes issued under the Indenture at a
redemption price of 106.5% of the principal amount thereof plus accrued and
unpaid interest thereon, if any, to the date of redemption; provided
that:


 


(1)          at least 65% of the
principal amount of Notes issued under the Indenture remains outstanding
immediately after any such redemption; and


 


(2)          the Company makes such
redemption not more than 60 days after the consummation of any such Equity
Offering.


 


6.  MANDATORY
REDEMPTION.


 


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


 


7.  REPURCHASE
AT OPTION OF HOLDER.


 


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


 


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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 $1,000 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


 


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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.


 


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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, 27th Floor


New York, NY  10036


Attention:  Investor Relations


 


A-6

















 


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).


 


A-7

















 


OPTION OF HOLDER TO ELECT
PURCHASE


 


If you want to elect to have this Note
purchased by the Company pursuant to Section 4.13 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 4.13 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).


 


A-8

















 


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

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


A-9