Document:

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 45031UBD2

5.850% Senior
Notes due 2017

	
  No. 1

  	
   

  	
  $250,000,000   

  	
   

  

 

iSTAR FINANCIAL
INC.

promises to pay to
CEDE & CO., or registered assigns, the principal sum of TWO HUNDRED AND
FIFTY MILLION on March 15, 2017.

Interest Payment Dates:
March 15 and September 15

Record Dates:  March 1 and September 1

Dated:  March 9, 2007

	
   

  	
  iSTAR FINANCIAL INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

SEAL

This is one of the Notes
referred to

in the within-mentioned Supplemental Indenture:

US BANK TRUST NATIONAL
ASSOCIATION
   as Trustee

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  

 

[Back of Note]

5.850% Senior Notes due 2017

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 5.850% per annum from March 9, 2007 until
maturity.  The Company will pay interest
semi-annually in arrears on March 15 and September 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 March 9, 2007; 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 September 15, 2007. 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 March 1 or September 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 March 9, 2007
(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
$250.0 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 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 March 15, 2017 computed using a discount rate equal to the Treasury
Rate plus 25 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, 27th 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:   ̈

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

  CustodianExhibit 4.3

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 45031UBE0

Senior Floating
Rate Notes due 2010

	
  No. 1

  	
   

  	
  $500,000,000   

  	
   

  

 

iSTAR FINANCIAL
INC.

promises to pay to
CEDE & CO., or registered assigns, the principal sum of FIVE HUNDRED
MILLION Dollars on March 9, 2010.

Interest Payment Dates:  March 9, June 9, September 9
and December 9

Record Dates: February
15, May 15, August 15 and November 15

Dated:  March 9, 2007

	
   

  	
  iSTAR FINANCIAL INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

SEAL

This is one of the Notes
referred to

in the within-mentioned Supplemental Indenture: 

US BANK TRUST NATIONAL
ASSOCIATION
   as Trustee

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  

 

[Back of Note]

Senior Floating Rate Notes due 2010

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 quarterly in arrears on March 9,
June 9, September 9 and December 9 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”) at the rate per annum, reset
quarterly (the “interest reset period” and the
first date in such period, the “interest reset date”),
equal to three-month LIBOR (as defined below) plus 0.35% to be determined
by the calculation agent.  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 March 9, 2007; 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 9, 2007.  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 using the
actual number of days elapsed from and including an interest payment date to
but excluding the next succeeding interest payment date.  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, except that if such
Business Day falls in the next succeeding calendar month, such interest payment
date will be the immediately preceding 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.

The interest rate on the Notes applicable to each
interest reset period commencing on the related interest reset date, or the
original issue date in the case of the initial interest period, will be the
rate determined as of the applicable interest determination date.  The “interest determination date” will be the
second London business day immediately preceding the original issue date, in
the case of the initial interest reset period, or thereafter the applicable
interest reset date.

US Bank Trust National Association, or its successor
appointed by the Company, will act as calculation agent.  Three-month LIBOR will be determined by the
calculation agent as of the applicable interest determination date in
accordance with the following provisions:

(i)                   LIBOR
is the rate for deposits in U.S. dollars for the three-month period which
appears on Reuters on page LIBOR 01 at approximately 11:00 a.m., London
time.  If no rate appears on Reuters on
page LIBOR 01, LIBOR for such interest determination date will be determined in
accordance with the provisions of paragraph (ii) below.

(ii)                With
respect to an interest determination date on which no rate appears on Reuters
on page LIBOR 01 at approximately 11:00 a.m., London time, on such interest
determination date, the calculation agent shall request the principal London
offices of each of four major reference banks (which may include affiliates of
the underwriters) in the London interbank market selected by the
calculation agent (after consultation with us) to provide the calculation
agent with a quotation of the rate at which deposits of U.S. dollars having a

three-month maturity, commencing on the second London business day
immediately following such interest determination date, are offered by it to
prime banks in the London interbank market as of approximately 11:00 a.m.,
London time, on such interest determination date in a principal amount equal to
an amount of not less than U.S. $1,000,000 that is representative for a single
transaction in such market at such time. 
If at least two such quotations are provided, LIBOR for such interest
determination date will be the arithmetic mean of such quotations as calculated
by the calculation agent.  If fewer than
two quotations are provided, LIBOR for such interest determination date will be
the arithmetic mean of the rates quoted at approximately 11:00 a.m., New York
City time, on such interest determination date by three major banks (which may
include affiliates of the underwriters) selected by the calculation agent
(after consultation with us) for loans in U.S. dollars to leading European
banks having a three-month maturity commencing on the second London business
day immediately following such interest determination date and in a principal
amount equal to an amount of not less than U.S. $1,000,000 that is
representative for a single transaction in such market at such time; provided, however, that if the banks selected as aforesaid
by the calculation agent are not quoting such rates as mentioned in this
sentence, LIBOR for such interest determination date will be LIBOR determined
with respect to the immediately preceding interest determination date.

All percentages resulting from any calculation of any
interest rate for the Notes will be rounded, if necessary, to the nearest one hundred
thousandth of a percentage point, with five one-millionths of a percentage
point rounded upward and all dollar amounts will be rounded to the nearest
cent, with one-half cent being rounded upward.

Promptly upon such determination, the calculation agent
will notify us and the Trustee (if the calculation agent is not the
Trustee) of the interest rate for the new interest reset period.  Upon request of a holder of the Notes, the
calculation agent will provide to such holder the interest rate in effect on
the date of such request and, if determined, the interest rate for the next
interest reset period.

All calculations made by the calculation agent for the
purposes of calculating interest on the Notes shall be conclusive and binding
on the holders and the Company, absent manifest error.

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 February 15, May 15, August 15 and
November 15 immediately 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 March 9, 2007
(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 $225.0 million in aggregate principal amount on the Issue Date
and may issue Additional Notes in accordance with the terms of the Indenture.

5.  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.

6.  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.  Also, the Company need not exchange or
register the transfer of any Notes during the period between a record date and
the corresponding Interest Payment Date.

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

8.  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.

9.  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.

10.  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.

11.  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.

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

13.  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).

14.  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.  No representation is made as to the accuracy
of such numbers as printed on the Notes 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, 27th 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:   ̈

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

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