Document:

Exhibit
10.7

 

iSTAR
ACQUISITION CORP.

 

FORM OF PRIVATE
PLACEMENT UNIT PURCHASE AGREEMENT

 

PRIVATE
PLACEMENT UNIT PURCHASE AGREEMENT (this “Agreement”) made as of this [    ]
day of [    ], 200[    ], by and
between iStar Acquisition Corp., a Delaware corporation (the “Company”),
and iStar Financial Inc. (the “Purchaser”).

 

WHEREAS,
the Company has filed a registration statement on Form S-1 (the “Registration
Statement”) under the Securities Act of 1933, as amended (the “Securities
Act”) with the Securities and Exchange Commission (“SEC”) in
connection with a proposed initial public offering (the “IPO”) of up to
57,500,000 units, each unit consisting of one share of common stock of the
Company, par value $0.0001 per share (the “Common Stock”), and one
warrant to purchase one share of Common Stock at an exercise price of $7.50;
and

 

WHEREAS,
immediately prior to the consummation of the IPO, the Company desires to issue
and sell, and the Purchaser desires to purchase, upon the terms and conditions
set forth in this Agreement, 2,500,000 additional units (the “Private
Placement Units”) at $10.00 per unit, each unit consisting of one share of
Common Stock (the “Private Placement Common Stock”) and one warrant to
purchase one share of Common Stock at an exercise price of $7.50 per share (the
“Private Placement Warrants” and collectively with the Private Placement
Units and the Private Placement Common Stock, the “Private Placement
Securities”), for an aggregate purchase price of $25,000,000 (the “Purchase
Price”);

 

NOW,
THEREFORE, for and in consideration of the premises and the mutual covenants
hereinafter set forth, the parties hereto do hereby agree as follows:

 

1.             Sale
and Purchase of Private Placement Units. 
Subject to and immediately prior to the consummation of the IPO, the
Company shall issue and sell to the Purchaser, and the Purchaser shall purchase
from the Company, the Private Placement Units for the Purchase Price.

 

2.             Closing.  The closing of the purchase and sale of the
Private Placement Units hereunder, including payment for and delivery of the
Private Placement Units, will take place at the offices of the Company or the
Company’s legal counsel immediately prior to, and shall be subject to, the completion
of the IPO.  At the closing, the Company
shall deliver to the Purchaser one or more certificates evidencing the Private
Placement Units, substantially in the form attached hereto as EXHIBIT A,
registered in the Purchaser’s name, upon the payment of the Purchase Price in
immediately available funds by wire transfer to an account designated by the
Company.  The Company shall deposit the
Purchase Price into the trust account described in the Registration Statement.

 

3.             Lock-Up
Agreement.

 

3.1           At or prior to the closing of the
IPO, the Purchaser shall enter into a lock-up agreement with the underwriter of
the IPO, Banc of America Securities LLC, pursuant to which the Purchaser shall
agree not to sell the Private Placement Securities (and any shares of Common
Stock issuable upon the exercise of the Private Placement Warrants) until after
the consummation of the Company’s initial Business Combination (the “Lock-Up
Period”), except for certain permitted transfers.  For purposes of this Agreement, “Business
Combination” shall have the meaning given to it in the Amended and Restated
Certificate of Incorporation of the Company, as the same may be amended from
time to time.

 

 

4.             Representations
and Warranties of the Company.  In
connection with the issuance and sale of the Private Placement Units, the
Company hereby represents and warrants to the Purchaser the following:

 

4.1           The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and the Company has all necessary corporate power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby.

 

4.2           All corporate action
necessary to be taken by the Company to authorize the execution, delivery and
performance of this Agreement and all other agreements and instruments delivered
by the Company in connection with the transactions contemplated hereby has been
duly and validly taken and this Agreement has been duly executed and delivered
by the Company.  This Agreement
constitutes the valid, binding and enforceable obligation of the Company,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws of general application now or hereafter in
effect affecting the rights and remedies of creditors and by general principles
of equity (regardless of whether enforcement is sought in a proceeding at law
or in equity).  The issuance and sale by
the Company of the Private Placement Units does not conflict with the amended
and restated certificate of incorporation or by-laws of the Company or any
material contract by which the Company or its property is bound, or any federal
or state laws or regulations or decree, ruling or judgment of any United States
or state court applicable to the Company or its property.

 

4.3           Upon issuance in
accordance with, and payment pursuant to, the terms hereof, the Purchaser will
have good title to the Private Placement Securities and the shares of Common
Stock underlying the Private Placement Warrants free and clear of all liens,
claims and encumbrances of any kind, other than transfer restrictions hereunder
and under other agreements contemplated hereby.

 

5.             Representations
and Warranties of the Purchaser.  The
Purchaser hereby represents and warrants to the Company that:

 

5.1           The Purchaser is an “accredited
investor” as that term is defined in Rule 501 of Regulation D
promulgated under the Securities Act.

 

5.2           The Units are being acquired for the
Purchaser’s own account, only for investment purposes and not with a view to,
or for resale in connection with, any public distribution or public offering
thereof within the meaning of the Securities Act.

 

5.3           The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Maryland.  The Purchaser has all
necessary corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby.

 

5.4           All corporate action necessary to be
taken by the Purchaser to authorize the execution, delivery and performance of
this Agreement and all other agreements and instruments delivered by the
Purchaser in connection with the transactions contemplated hereby has been duly
and validly taken and this Agreement has been duly executed and delivered by
the Purchaser.  This Agreement
constitutes the valid, binding and enforceable obligation of the Purchaser,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws of general application now or hereafter in
effect affecting the rights and remedies of creditors and by general principles
of equity (regardless of whether enforcement is sought in a proceeding at law
or in equity).  The purchase by the
Purchaser of the Private Placement Units does not conflict with the
organizational documents of the Purchaser or with any

 

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material contract by which the Purchaser or its property is bound, or
any laws or regulations or decree, ruling or judgment of any court applicable
to the Purchaser or its property.

 

6.             Registration Rights Agreement.  At the time of the completion of the IPO, the
Company and the Purchaser shall enter into a registration rights agreement
pursuant to which the Company will grant certain registration rights to the
Purchaser relating to the Private Placement Securities and the shares of Common
Stock underlying the Private Placement Warrants.

 

7.             Successors and Assigns.  Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors of the parties hereto whether so expressed or not.  Notwithstanding the foregoing or anything to
the contrary herein, the parties may not assign this Agreement or their
obligations hereunder.

 

8.             Amendments.  This Agreement may not be amended, modified
or waived, in whole or in part, except by an agreement in writing signed by
each of the parties hereto.

 

9.             Waiver of Claims;
Indemnification. The Purchaser hereby waives any and all rights to assert
any present or future claims, including any right of rescission, against the
Company or Banc of America Securities LLC with respect to the Purchaser’s
purchase of the Private Placement Securities, and the Purchaser agrees to
indemnify and hold the Company and Banc of America Securities LLC harmless from
all losses, damages or expenses that relate to claims or proceedings brought
against the Company or Banc of America Securities LLC by any of the Purchaser’s
transferees, heirs, successors, assigns or any subsequent holders of the Private
Placement Securities or any shares of Common Stock underlying the Private
Placement Warrants.

 

10.           Counterparts; Facsimile.  This Agreement may be executed in any number
of counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
instrument.  This Agreement or any
counterpart may be executed via facsimile transmission, and any such executed
facsimile copy shall be treated as an original.

 

11.           Governing Law.  This Agreement shall for all purposes be
deemed to be made under and shall be construed in accordance with the laws of
the State of New York.  The parties
hereby agree that any action, proceeding or claim against it arising out of or
relating in any way to this Agreement shall be brought and enforced in the courts
of the State of New York or the United States District Court for the Southern
District of New York, and irrevocably submit to such jurisdiction, which
jurisdiction shall be exclusive.  The
parties hereby waive any objection to such exclusive jurisdiction and agree not
to plead or claim that such courts represent an inconvenient forum.

 

12.           Third Party Beneficiary. This
Agreement is intended for the benefit of the parties hereto and their
respective permitted successors and assigns, and is not for the benefit of, nor
may any provision hereof be enforced by, any other person; provided that Banc
of America Securities LLC shall be a third party beneficiary of this Agreement.

 

[Remainder of Page Intentionally Left
Blank]

 

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

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  iSTAR ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Jay
  Nydick

  
	
   

  	
   

  	
  Title: Chief
  Executive Officer and President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PURCHASER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  iSTAR
  FINANCIAL INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Jay
  Sugarman

  
	
   

  	
   

  	
  Title:
  Chairman and Chief Executive Officer

  
					

 

4Exhibit 10.8

 

iSTAR ACQUISITION CORP.

 

FORM OF CO-INVESTMENT UNIT PURCHASE AGREEMENT

 

THIS CO-INVESTMENT
UNIT PURCHASE AGREEMENT (this “Agreement”),
dated as of [    ], is entered into by and between iStar Acquisition Corp., a Delaware corporation (the “Company”) and iStar Financial Inc.,
a Maryland corporation (the “Purchaser”).

 

WHEREAS, the
Company has filed a registration statement on Form S-1 (the “Registration Statement”) with the Securities and Exchange
Commission (the “SEC”) for the initial public offering
of 50,000,000 units (the “Initial Public Offering”),
each unit consisting of one share of the common stock, par value $0.0001 per
share, of the Company (“Common Stock”),
and one warrant to purchase one share of Common Stock at an exercise price of $7.50
per share.

 

WHEREAS,
immediately prior to the completion of the Company’s initial merger, capital
stock exchange, stock purchase, asset acquisition or other similar business
combination with one or more operating businesses (a “Business
Combination”), the Purchaser desires to purchase and the Company
desires to issue and sell, upon the terms and conditions set forth in this
Agreement, 2,500,000 units (the “Co-Investment Units”)
at $10.00 per unit, each unit consisting of one share of Common Stock (the “Co-Investment Common Stock”) and one warrant to purchase one
share of Common Stock at an exercise price of $7.50 per share (the “Co-Investment Warrants” and collectively with the
Co-Investment Units and the Co-Investment Common Stock, the “Co-Investment Securities”), for an aggregate purchase price
of $25,000,000 (the “Co-Investment Units
Purchase Price”).

 

NOW THEREFORE,
in consideration of the mutual promises contained in this Agreement and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties to this Agreement hereby agree as follows:

 

Section 1.  AUTHORIZATION, PURCHASE
AND SALE; TERMS OF THE CO-INVESTMENT SECURITIES.

 

A.            Authorization
of the Co-Investment Securities and the shares of Common Stock underlying the
Co-Investment Warrants.  The Company
has duly authorized the issuance and sale to the Purchaser of each of the Co-Investment
Securities and the shares of Common Stock underlying the Co-Investment Warrants
(collectively, the “Securities”).

 

B.            Purchase
and Sale of the Co-Investment Units. 
Immediately prior to the completion of the Business Combination (the “Closing Date”), which will not occur until after the
approval of the Business Combination by the requisite vote of the Company’s
stockholders (as described in the Registration Statement), the Company shall
issue and sell to the Purchaser and the Purchaser shall purchase from the
Company, the Co-Investment Units for the Co-Investment Units Purchase
Price.  On the Closing Date, the Company
shall deliver certificates evidencing the Co-Investment Units, registered in
the Purchaser’s name, upon the payment by the Purchaser of the Co-Investment
Units Purchase Price, by wire transfer of immediately available funds to the
Company in accordance with the Company’s wiring instructions.  In the event that the Company fails to
consummate the Business Combination within 24 months from the consummation
of its Initial Public Offering, Purchaser’s obligation to purchase the Co-Investment
Units shall be null and void and of no further force and effect.

 

 

C.            Terms
of the Co-Investment Units, Co-Investment Common Stock and Co-Investment
Warrants.

 

(i)            Co-Investment
Units.  Each Co-Investment Unit shall
have the terms set forth in the Co-Investment Unit Certificate attached as
EXHIBIT A hereto.

 

(ii)           Co-Investment
Common Stock.  The Co-Investment
Common Stock shall have the terms set forth in the Amended Certificate of
Incorporation of the Company, as may be amended and restated from time to time
(the “Certificate of Incorporation”) and the
Co-Investment Common Stock Certificate attached as EXHIBIT B hereto.

 

(iii)          Co-Investment
Warrants.  The Co-Investment Warrants
shall have the terms set forth in the Co-Investment Warrant Certificate and the
Warrant Agreement, dated as of [    ], between the Company
and Continental Stock Transfer & Trust Company (the “Warrant Agreement”), attached as EXHIBIT C hereto.

 

(iv)          Transfer
Restrictions.

 

(a)           The Purchaser shall
not (i) sell, offer to sell, contract or agree to sell, hypothecate,
pledge, grant any option to purchase or otherwise dispose of or agree to
dispose of, directly or indirectly, or, except as provided in the Registration
Rights Agreement (as defined below), file (or participate in the filing of) a
registration statement with the SEC in respect of, or establish or increase a
put equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the SEC promulgated
thereunder with respect to, any 
Securities, (b) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of Securities, whether any such transaction is to be settled by
delivery of Securities, in cash or otherwise, or (c) publicly announce an
intention to effect any transaction specified in clause (a) or (b) until
one year after the consummation of an initial Business Combination (the “Lock-Up
Period”).  Notwithstanding the foregoing,
the Purchaser may transfer Securities during the Lock-Up Period (i) to a
member of the Purchaser’s immediate family, (ii) to an affiliate of the
Purchaser, (iii) to a charitable organization, (iv) to a trust, the
beneficiary of which is a member of the Purchaser’s immediate family, (v) by
virtue of the laws of descent and distribution upon death of the Purchaser, (vi) to
officers or directors of the Company, (vii) to current and former
officers, directors and employees of the Purchaser, (vii) pursuant to a
qualified domestic relations order, or (viii) in the event of a merger,
capital stock exchange, stock purchase, asset acquisition or other similar
transaction which results in all the Company’s stockholders having the right to
exchange their shares of Common Stock for cash, securities or other property
subsequent to the Company’s consummating a Business Combination (as such term
is defined in the Amended and Restated Certificate of Incorporation of the
Company); provided, however,
that the permissive transfers pursuant to clauses (i) — (vii) may
be implemented only upon the respective transferee’s written agreement to be
bound by the terms and conditions of this Agreement.

 

(b)           If (i) during
the last 17 days of the Lock-Up Period, the Company issues material news
or a material event relating to the company occurs or (ii) before the
expiration of the Lock-Up period, the Company announces that material news or a
material event relating to the Company will occur during the 16-day period
beginning on the last day of the Lock-Up Period, said Lock-Up Period will be
extended for up to 18 days beginning on the issuance of the material news
or the occurrence of the material event.

 

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(c)           The Purchaser agrees
that after the Lock-Up Period has elapsed, the Securities shall only be
transferable or saleable pursuant to a sale registered under the Securities Act
of 1933, as amended (the “Securities Act”),
or pursuant to an available exemption from registration, other than Regulations
S of the Securities Act.

 

(v)           Registration
Rights.  In connection with the
closing of the Initial Public Offering, the Company and the Purchaser shall
enter into an agreement (the “Registration Rights
Agreement”) granting the Purchaser registration rights with respect
to the Securities; provided however that such registration rights with respect
to the Securities shall not become effective prior to the end of the applicable
Lock-Up Period.

 

Section  2.  REPRESENTATIONS AND WARRANTIES OF THE
COMPANY.

 

As a material
inducement to the Purchaser to enter into this Agreement and purchase the Co-Investment
Units, the Company hereby represents and warrants to the Purchaser that:

 

A.            Organization
and Corporate Power.  The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware.  The
Company possesses all requisite corporate power and authority necessary to
carry out the transactions contemplated by this Agreement and the Warrant
Agreement.

 

B.            Authorization;
No Breach.

 

(i)            Due
Authorization.  The execution,
delivery and performance of this Agreement and the Warrant Agreement have been
duly authorized by the Company.  This
Agreement constitutes the valid and binding obligation of the Company,
enforceable in accordance with its terms. 
The Warrant Agreement, and upon issuance in accordance with, and payment
pursuant to, the terms of the Warrant Agreement and this Agreement, the Co-Investment
Warrants, constitute valid and binding obligations of the Company, enforceable
in accordance with their respective terms as of the Closing Date.

 

(ii)           Conflicts.  The execution and delivery by the Company of
this Agreement, the Warrant Agreement and the sale and issuance of each of the
Securities and the fulfillment of and compliance with the respective terms
hereof and thereof by the Company, do not and will not as of the Closing Date (i) conflict
with or result in a breach of the terms, conditions or provisions of, (ii) constitute
a default under, (iii) result in the creation of any lien, security
interest, charge or encumbrance upon the Company’s capital stock or assets, (iv) result
in a violation of, or (v) require any authorization, consent, approval,
exemption or other action by or notice or declaration to, or filing with, any
court or administrative or governmental body or agency pursuant to, the
certificate of incorporation or the bylaws of the Company, as amended, or any
material law, statute, rule or regulation to which the Company is subject,
or any agreement, order, judgment or decree to which the Company is subject,
except for any filings required after the date hereof under federal or state
securities laws.

 

C.            Title
to Securities.  Upon issuance in
accordance with, and payment pursuant to, the terms hereof and the Warrant
Agreement, as the case may be, each of the Securities will be duly and validly
issued, fully paid and nonassessable. 
Upon issuance in accordance with, and payment pursuant to, the terms
hereof and the Warrant Agreement, as the case may be, the Purchaser will have
or receive good title to the Securities, free and clear of all liens, claims
and encumbrances of any kind, other than (a) transfer restrictions
hereunder and under the other agreements contemplated hereby, (b) transfer
restrictions under federal and state securities laws, and (c) liens,
claims or encumbrances imposed due to the actions of the Purchaser.

 

3

 

D.            Governmental
Consents.  No permit, consent,
approval or authorization of, or declaration to or filing with, any
governmental authority is required in connection with the execution, delivery
and performance by the Company of this Agreement or the Warrant Agreement, or
the consummation by the Company of any other transactions contemplated hereby.

 

Section  3.  REPRESENTATIONS AND WARRANTIES OF THE
PURCHASER.

 

As a material
inducement to the Company to enter into this Agreement and issue and sell the
Co-Investment Units, the Purchaser hereby represents and warrants to the
Company that:

 

A.            Capacity
and State Law Compliance.  The
Purchaser will engage in the transactions contemplated by this Agreement within
a state in which the offer and sale of the Securities is permitted under
applicable securities laws.

 

B.            Authorization;
No Breach.

 

(i)            This
Agreement constitutes a valid and binding obligation of the Purchaser,
enforceable in accordance with its terms.

 

(ii)           The
execution and delivery by the Purchaser of this Agreement and the fulfillment
of and compliance with the respective terms hereof by the Purchaser does not
conflict with or result in a breach of the terms, conditions or provisions of
the organizational documents of the Purchaser or any other agreement,
instrument, order, judgment or decree to which the Purchaser is subject.

 

C.            Investment
Representations.

 

(i)            The
Purchaser understands that no Co-Investment Warrants will be exercisable unless
at the time of exercise (a) a registration statement relating to the
shares of Common Stock issuable upon exercise of the Co-Investment Warrants is
effective, (b) a prospectus relating to the shares of Common Stock
issuable upon exercise of the Co-Investment Warrants is available for use, and (c) the
Common Stock has been registered or qualified or deemed to be exempt under the
securities laws of the state of residence of the holder of the Co-Investment
Warrants.

 

(ii)           The
Purchaser understands that the Securities will be offered and sold in reliance
on specific exemptions from the registration requirements of the United States
federal and state securities laws and that the Company is relying upon the
truth and accuracy of, and the Purchaser’s compliance with, the representations
and warranties of the Purchaser set forth herein in order to determine the availability
of such exemptions and the eligibility of the Purchaser to acquire such
Securities.

 

(iii)          The
Purchaser did not decide to enter into this Agreement as a result of any
general solicitation or general advertising within the meaning of Rule 502(c) under
the Securities Act.

 

(iv)          The
Purchaser understands that no United States federal or state agency or any
other government or governmental agency has passed on or made any
recommendation or endorsement of the Securities or the fairness or suitability
of the investment in the Securities by the Purchaser nor have such authorities
passed upon or endorsed the merits of the offering of the Securities.

 

(v)           The
Purchaser understands that:  (a) the
Securities have not been and are not being registered under the Securities Act
or any state securities laws, and may not be offered for sale, sold, assigned
or transferred unless (A) subsequently registered thereunder or (B) sold
in reliance on an exemption therefrom; and (b) except as specifically set
forth in the Registration Rights Agreement, 

 

4

 

neither the Company nor any other person is under any obligation to
register the Securities under the Securities Act or any state securities laws
or to comply with the terms and conditions of any exemption thereunder.  In this regard, the Purchaser understands
that the SEC has taken the position that promoters or affiliates of a blank
check company and their transferees, both before and after a Business
Combination, are deemed to be “underwriters” under the Securities Act when
reselling the securities of a blank check company.  Based on that position, Rule 144 adopted
pursuant to the Securities Act would not be available for resale transactions
of the Securities despite technical compliance with the requirements of such
Rule, and the Securities can be resold only through a registered offering or in
reliance upon another exemption from the registration requirements of the
Securities Act.  The Purchaser is able to
bear the economic risk of its investment in the Securities for an indefinite
period of time.

 

(vi)          The
Purchaser has such knowledge and expertise in financial and business matters,
knows of the high degree of risk associated with investments generally and
particularly investments in the securities of companies in the development
stage such as the Company, is capable of evaluating the merits and risks of an
investment in the Securities and is able to bear the economic risk of an
investment in the Securities in the amount contemplated hereunder.  The Purchaser can afford a complete loss of
its investment in the Securities.

 

Section  4.  CONDITIONS OF THE OBLIGATIONS OF THE
PURCHASER AND THE COMPANY.

 

Each of the
Purchaser’s and the Company’s obligation to consummate the transactions
contemplated hereby is subject to:

 

A.            The
Company having entered into a definitive agreement relating to a Business
Combination.

 

B.            The
Business Combination having been approved by a majority of the votes cast by
the Company’s public stockholders at a duly held stockholders meeting.

 

C.            An
amendment of the Company’s certificate of incorporation to provide for the
Company’s perpetual existence having been approved by the holders of a majority
of the Company’s outstanding shares of Common Stock.

 

D.            Public
stockholders of the Company owning fewer than 30% of the Company’s shares of
Common Stock sold in the Initial Public Offering having both voted against the
Company’s initial Business Combination and exercised their conversion rights.

 

Section  5.  MISCELLANEOUS.

 

A.            Further
Assurances.

 

The parties
hereto shall execute and deliver such additional documents and take such
additional actions as any party reasonably may deem to be practical and
necessary in order to consummate the transactions contemplated by this
Agreement.

 

B.            Legends.

 

(i)            The
certificates evidencing the Co-Investment Units and the Co-Investment Common
Stock will include the legend set forth on EXHIBITS A and B hereto,
respectively, which the Purchaser has read and understood.  The Co-Investment Warrants and shares of
Common Stock issued upon exercise of the Co-Investment Warrants will include
the legend set forth in EXHIBIT A to the 

 

5

 

Warrant Agreement in the case of the Warrants and in the Warrant
Agreement in the case of the Common Stock, which the Purchaser has read and
understood.

 

(ii)           By
accepting the Securities, the Purchaser agrees, prior to any transfer of the
Securities, to give written notice to the Company expressing its desire to
effect such transfer and describing briefly the proposed transfer.  Upon receiving such notice, the Company shall
present copies thereof to its counsel and the Purchaser agrees not to make any
disposition of all or any portion of the Securities unless and until:

 

(a)           there is then in
effect a registration statement under the Securities Act covering such proposed
disposition and such disposition is made in accordance with such registration
statement, in which case the legends set forth above with respect to the
Securities sold pursuant to such registration statement shall be removed; or

 

(b)           if reasonably
requested by the Company, (A) the Purchaser shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company,
that such disposition will not require registration of such Securities under
the Securities Act, (B) the Company shall have received customary
representations and warranties regarding the transferee that are reasonably
satisfactory to the Company signed by the proposed transferee and (C) the
Company shall have received an agreement by such transferee to the restrictions
contained in the legends referred to in (i) hereof.

 

Notwithstanding
the foregoing, the Purchaser also understands and acknowledges that the
transfer of the Co-Investment Securities and exercise of the Co-Investment
Warrants are subject to the specific conditions to such transfer or exercise as
outlined herein and in the Warrant Agreement as to which the Purchaser
specifically assents by its execution hereof.

 

(iii)          The
Company may, from time to time, make stop transfer notations in its records and
deliver stop transfer instructions to its transfer agent to the extent its
counsel considers it necessary to ensure compliance with federal and state
securities laws and the transfer restrictions contained elsewhere in this
Agreement and the Warrant Agreement.

 

C.            Successors
and Assigns.  Except as otherwise
expressly provided herein, all covenants and agreements contained in this
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective successors of the parties hereto whether so
expressed or not.  Notwithstanding the
foregoing or anything to the contrary herein, the parties may not assign this
Agreement or their obligations hereunder.

 

D.            Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.

 

E.             Counterparts.  This Agreement may be executed simultaneously
in two or more counterparts, none of which need contain the signatures of more
than one party, but all such counterparts taken together shall constitute one
and the same agreement.

 

F.             Descriptive
Headings; Interpretation.  The
descriptive headings of this Agreement are inserted for convenience only and do
not constitute a substantive part of this Agreement.  The use of the word “including” in this
Agreement shall be by way of example rather than by limitation.

 

6

 

G.            Governing
Law.  This Agreement shall for all
purposes be deemed to be made under and shall be construed in accordance with
the laws of the State of New York.  The
parties hereby agree that any action, proceeding or claim against it arising
out of or relating in any way to this Agreement shall be brought and enforced in
the United States District Court for the Southern District of New York or in a
New York State Court in the County of New York, and irrevocably submit to such
jurisdiction, which jurisdiction shall be exclusive.  The parties hereby waive any objection to
such exclusive jurisdiction and agree not to plead or claim that such courts
represent an inconvenient forum.

 

H.            Notices.  All notices, demands or other communications
to be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient, sent to the recipient by reputable overnight
courier service (charges prepaid) or mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid.  Such notices, demands and other
communications shall be sent:

 

	
  If to the Company:

  	
   

  	
  iStar Acquisition Corp.

  1114 Avenue of the Americas

  39th Floor

  New York, New York 10036

  Tel. No.: (212) 930-9400

  
	
   

  	
   

  	
   

  
	
  If to the Purchaser:

  	
   

  	
  iStar Financial Inc.

  1114 Avenue of the Americas

  New York, New York 10036

  Tel. No.: (212) 930-9400

  
	
   

  	
   

  	
   

  
	
  In each case, with a copy to:

  	
   

  	
  Clifford Chance US LLP

  31 West 52nd Street

  New York, NY 10019

  Tel. No.: (212) 878-8000

  Fax No.: (212) 878-8375

  

 

or to such
other address or to the attention of such other person as the recipient party
has specified by prior written notice to the sending party.

 

I.              No
Strict Construction.  The parties
hereto have participated jointly in the negotiation and drafting of this
Agreement.  In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto, and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of
any of the provisions of this Agreement.

 

J.             Costs
and Expenses.  Each party shall bear
its own costs and expenses in connection with the preparation of this Agreement
and the transaction contemplated hereby, and neither party shall be obligated
to reimburse the other party for any expenses incurred in connection with the
performance of this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

7

 

IN WITNESS
WHEREOF, the parties hereto have executed this Co-Investment Agreement on the
date first written above.

 

	
   

  	
  iSTAR ACQUISITION CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Jay S. Nydick

  
	
   

  	
  Title:

  	
  Chief Executive Officer and President

  
	
   

  	
   

  	
   

  
	
   

  	
  iSTAR FINANCIAL INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Jay Sugarman

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  

 

8

 

Exhibit A

 

SPECIMEN OF CO-INVESTMENT UNIT CERTIFICATE

 

	
  No. U-             

  	
                UNITS

  
	
  CUSIP
  No.                

  	
   

  

 

iSTAR ACQUISITION CORP.

 

UNITS CONSISTING OF ONE SHARE OF COMMON STOCK
AND

ONE WARRANT TO PURCHASE ONE SHARE OF COMMON STOCK

SEE REVERSE FOR CERTAIN DEFINITIONS

 

THIS CERTIFIES
THAT                               
is the owner of             
Units.

 

Each Unit (“Unit”)
consists of one (1) share of common stock, par value $0.0001 per share (“Common
Stock”), of iStar Acquisition Corp., a Delaware corporation (the “Corporation”),
and one (1) warrant (the “Warrant”) of the Corporation.  The Warrant entitles the holder to purchase one
(1) share of Common Stock for $7.50 per share (subject to adjustment as
set forth in the Warrant Agreement (defined below)).  The Warrant will become exercisable only
after the consummation of the Corporation’s initial business combination.  The terms of the Warrants are governed by a
Warrant Agreement, dated as of                       ,
2008 (the “Warrant Agreement”), between the Corporation and Continental
Stock Transfer & Trust Company, as Warrant Agent, and are subject to
the terms and provisions contained therein, all of which terms and provisions
the holder of this certificate consents to by acceptance hereof.  Copies of the Warrant Agreement are on file
at the office of the Warrant Agent at 17 Battery Place, New York, NY 10004, and
are available to any Warrant holder on written request and without cost.

 

THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE. 
THESE SECURITIES ARE ALSO SUBJECT TO RESTRICTIONS ON TRANSFER OR SALE
PURSUANT TO A CO-INVESTMENT AGREEMENT DATED [·], 2008, A COPY OF
WHICH CAN BE OBTAINED FROM THE CORPORATION AT ITS EXECUTIVE OFFICES.

 

This
certificate is not valid unless countersigned by the Transfer Agent and
Registrar of the Corporation.

 

A-1

 

Witness the
facsimile seal of the Corporation and the facsimile signature of its duly
authorized officers.

 

iSTAR ACQUISITION CORP.

CORPORATE

DELAWARE

SEAL

2007

 

	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Chairman

  	
   

  	
  Chief Executive Officer, President and 

  
	
   

  	
   

  	
   

  	
  Secretary

  
	
  Countersigned By:

  	
   

  	
   

  	
   

  
	
   

  	
  Transfer Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

A-2

 

iSTAR ACQUISITION CORP.

 

The
Corporation will furnish without charge to each securityholder who so requests,
a statement of the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock or
series thereof of the Corporation and the qualifications, limitations, or
restrictions of such preferences and/or rights.

 

The following
abbreviations, when used in the inscription on the face of this certificate,
shall be construed as though they were written out in full according to
applicable laws or regulations:

 

	
  TEN COM

  	
  -

  	
  as tenants in common

  	
  UNIF GIFT MIN ACT

  	
  -

  	
  Custodian

  
	
  TEN ENT

  	
  -

  	
  as tenants by the entireties 

  	
   

  	
   

  	
  (Cust)                   (Minor)
  

  
	
  JT TEN

  	
  -

  	
  as joint tenants with right

  of survivorship and not as

  tenants in common

  	
   

  	
   

  	
  under   Uniform    Gifts   to

  Minors Act

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (State)

  

 

Additional
abbreviations may also be used though not in the above list.

 

	
  FOR VALUE
  RECEIVED,
                          
  HEREBY SELL, ASSIGN AND TRANSFER UNTO

  
	
   

  
	
  PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  
	
  (PLEASE PRINT OR TYPEWRITE NAME AND
  ADDRESS,

  
	
  INCLUDING ZIP CODE, OF ASSIGNEE)

  
	
   

  
	
   

  
	
   

  
	
                                      
  UNITS REPRESENTED BY THE WITHIN CERTIFICATE, AND DO HEREBY IRREVOCABLY
  CONSTITUTE AND APPOINT
                                                
  ATTORNEY TO TRANSFER THE SAID UNITS ON THE BOOKS OF THE WITHIN NAMED
  CORPORATION WITH FULL POWER OF SUBSTITUTION IN THE PREMISES.

  

 

A-3

 

	
  DATED:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTICE: The signature to this assignment

  must correspond with the name as written

  upon the face of the certificate in every

  particular, without alteration or

  enlargement or any change whatsoever.

  
	
   

  	
   

  	
   

  
	
  Signature(s) Guaranteed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  THE SIGNATURE(S) MUST BE GUARANTEED

  BY AN ELIGIBLE GUARANTOR INSTITUTION

  (BANKS, STOCKBROKERS, SAVINGS AND

  LOAN ASSOCIATIONS AND CREDIT UNIONS

  WITH MEMBERSHIP IN AN APPROVED

  SIGNATURE GUARANTEE MEDALLION

  PROGRAM, PURSUANT TO S.E.C.

  RULE 17Ad-15).

  	
   

  	
   

  

 

A-4

 

Exhibit B

 

SPECIMEN CO-INVESTMENT COMMON STOCK
CERTIFICATE

 

	
  No. U-                 

  	
                   UNITS

  
	
  CUSIP No.                        

  	
   

  

 

iSTAR ACQUISITION CORP.

INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

COMMON STOCK

 

SEE REVERSE FOR CERTAIN DEFINITIONS

 

THIS CERTIFIES
THAT

 

IS THE OWNER
OF

 

FULLY PAID AND NON-ASSESSABLE SHARES OF THE
PAR VALUE OF $0.0001 EACH OF THE

COMMON STOCK OF

 

iSTAR ACQUISITION CORP.

 

TRANSFERABLE
ON THE BOOKS OF THE CORPORATION IN PERSON OR BY DULY AUTHORIZED ATTORNEY UPON
SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED.  THIS CERTIFICATE IS NOT VALID UNLESS
COUNTERSIGNED BY THE TRANSFER AGENT AND REGISTERED BY THE REGISTRAR.  WITNESS THE SEAL OF THE CORPORATION AND THE
FACSIMILE SIGNATURES OF ITS DULY AUTHORIZED OFFICERS.

 

DATED:

 

iSTAR ACQUISITION CORP.

CORPORATE

DELAWARE

SEAL

2007

 

	
  By:

  	
   

  	
   

  	
   

  
	
  Chairman

  	
   

  	
   

  	
  Chief Executive Officer, President and

  
	
   

  	
   

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
  Countersigned By:

  	
   

  	
   

  	
   

  
	
   

  	
  Transfer Agent

  	
   

  	
   

  
						

 

B-1

 

The following
abbreviations, when used in the inscription on the face of this certificate,
shall be construed as though they were written out in full according to
applicable laws or regulations:

 

	
  TEN COM

  	
  -

  	
  as tenants in common

  	
  UNIF GIFT MIN ACT

  	
  -

  	
  Custodian

  
	
  TEN ENT

  	
  -

  	
  as tenants by the entireties

  	
   

  	
   

  	
  (Cust)        (Minor)

  
	
  JT TEN

  	
  -

  	
  as joint tenants with right

  of survivorship and not as

  tenants in common

  	
   

  	
   

  	
  under    Uniform   Gifts    to
  Minors Act 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (State)

  

 

Additional
abbreviations may also be used though not in the above list.

 

B-2

 

iSTAR ACQUISITION CORP.

 

iSTAR
Acquisition Corp. (the “Corporation”) will furnish without charge to each
securityholder who so requests the powers, designations, preferences and
relative, participating, optional or other special rights of each class of
stock or series thereof of the Corporation and the qualifications, limitations,
or restrictions of such preferences and/or rights.  This certificate and the shares represented
thereby are issued and shall be held subject to all the provisions of the
Corporation’s amended and restated certificate of incorporation and all
amendments thereto and resolutions of the Board of Directors providing for the
issue of shares of the Corporation’s Common Stock (copies of which may be
obtained from the Corporation), to all of which the holder of this certificate
by acceptance hereof assents.

 

THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE. 
THESE SECURITIES ARE ALSO SUBJECT TO RESTRICTIONS ON TRANSFER OR SALE
PURSUANT TO A CO-INVESTMENT AGREEMENT DATED [ · ], 2008, A
COPY OF WHICH CAN BE OBTAINED FROM THE CORPORATION AT ITS EXECUTIVE OFFICES.

 

	
  FOR VALUE
  RECEIVED,
                          
  HEREBY SELL, ASSIGN AND TRANSFER UNTO

  
	
   

  
	
  PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  
	
  (PLEASE PRINT OR TYPEWRITE NAME AND
  ADDRESS,

  
	
  INCLUDING ZIP CODE, OF ASSIGNEE)

  
	
   

  
	
   

  
	
   

  
	
                              
  SHARES OF THE CAPITAL STOCK REPRESENTED BY THE WITHIN CERTIFICATE, AND DO
  HEREBY IRREVOCABLY CONSTITUTE AND APPOINT
                      
  ATTORNEY TO TRANSFER THE SAID STOCK ON THE BOOKS OF THE WITHIN NAMED
  CORPORATION WITH FULL POWER OF SUBSTITUTION IN THE PREMISES.

  
	
   

  

 

B-3

 

	
  DATED:                        

  	
   

  	
   

  
	
   

  	
   

  	
  NOTICE: The signature to this assignment

  must correspond with the name as written

  upon the face of the certificate in every

  particular, without alteration or

  enlargement or any change whatsoever.

  
	
   

  	
   

  	
   

  
	
  Signature(s) Guaranteed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  THE SIGNATURE(S) MUST BE GUARANTEED

  BY AN ELIGIBLE GUARANTOR INSTITUTION

  (BANKS, STOCKBROKERS, SAVINGS AND

  LOAN ASSOCIATIONS AND CREDIT UNIONS

  WITH MEMBERSHIP IN AN APPROVED

  SIGNATURE GUARANTEE MEDALLION

  PROGRAM, PURSUANT TO S.E.C.

  RULE 17Ad-15).

  	
   

  	
   

  

 

B-4

 

Exhibit C

 

WARRANT CERTIFICATE AND

WARRANT AGREEMENT

 

C-1

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