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                                                                    EXHIBIT 10.1



                              EMPLOYMENT AGREEMENT


         THIS EMPLOYMENT AGREEMENT ("Agreement") made as of the 27th day of May,
1998 (the "Effective Date"), by and between First Sierra Financial, Inc., a
Delaware corporation (the "Employer"), and Michael A. Sabel (the "Employee").
Employer and Employee may be referred to herein collectively as the "Parties"
and individually as a "Party".

                                    ARTICLE I

                                      TERM

         Employer hereby employs Employee and Employee hereby accepts employment
with Employer for a period beginning on the Effective Date and ending on the
fifth anniversary of the Effective Date (the "Term"). This Agreement replaces
all prior agreements between the parties, oral or written, regarding employment
of Employee by Employer and all such prior agreements are void as of the
Effective Date of this Agreement.

                                   ARTICLE II

                               DUTIES OF EMPLOYEE

         2.01 Duties. Employee is engaged to be the Executive Vice President -
Mergers and Acquisitions and President of First Sierra International (a division
or subsidiary of Employer to be formed in the future). Employee's duties in such
capacities shall be determined from time to time by the Chief Executive Officer
of Employer. Employee shall perform and discharge his duties in a businesslike
manner and faithfully as an officer of Employer, and shall be subject to the
supervision and direction of the Chief Executive Officer of Employer and
Employer's Board of Directors.

         2.02 Full-Time Employment. Subject to the provisions set forth below,
Employee shall devote his productive time, ability, and attention to the
business of Employer during the Term. Employee shall not, directly or
indirectly, during the Term render any services of a business, commercial or
professional nature to any other person, corporation, firm or organization,
whether for compensation or otherwise, without the prior written consent of the
Chief Executive Officer of Employer.

         Notwithstanding the foregoing, Employee may continue to engage in
personal and family investing; provided, however, unless prior approval is given
by the Chief Executive Officer of Employer, such investments may not include
equipment leases or interests in non-publicly traded entities engaged in
equipment leasing.
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                                   ARTICLE III

                            COMPENSATION AND BENEFITS

         3.01 Base Salary. As compensation for services rendered and Employee's
covenants and agreements under this Agreement, Employee shall be entitled to
receive a base salary of two hundred forty-nine thousand nine hundred
ninety-nine dollars ($249,999) per year, payable in equal semi-monthly
installments. The base salary of Employee may be increased from time to time at
the sole discretion of Employer.

         3.02 Bonus. Employee will be eligible to participate in Employer's
incentive bonus plan for executive management.

         3.03 Benefit Plans. During the Term, and thereafter, to the extent
provided in the applicable plan or under applicable law, Employer agrees to
include Employee in any retirement, insurance and health benefit plans adopted
by Employer for the benefit of the senior employees of Employer. Employer may
enter into and revise these plans in its sole discretion. Employee will have
four weeks paid vacation each year.

         3.04 Expenses. Employer, in accordance with the rules and regulations
Employer shall issue and may revise from time to time, shall reimburse Employee
for business expenses directly and reasonably incurred in the performance of his
duties. Employer acknowledges that Employee will require a travel and
entertainment budget and reimbursement for reasonable travel and entertainment
expenses. Any amounts advanced or reimbursed by Employer to Employee for travel
and entertainment expenses shall be in addition to any other amounts payable to
Employee hereunder.

                                   ARTICLE IV

                                   TERMINATION

         This Agreement shall terminate prior to the expiration of its Term upon
the occurrence of any one of the following events:

         4.01 Disability. In the event that Employee is unable fully to perform
his duties and responsibilities with reasonable accommodation hereunder to the
full extent required by Employer due to illness, injury or incapacity for ninety
(90) consecutive days (during such ninety (90) day period Employee shall
continue to be compensated as provided in Section 3.01 hereof), this Agreement
may be terminated by Employer, and Employer and Employee shall have no further
liability or obligations hereunder; provided, however, that Employer shall
continue to pay Employee the base salary specified in Section 3.01 for the
duration of the Term at the same times specified in Section 3.01 (as reduced by
any payments received by Employee under any Employer-sponsored disability
benefits plan in which Employee was participating). In the event of any dispute
under this Section 4.01, Employee shall submit to a physical examination by a
licensed physician selected by Employer, and acceptable to Employee. If the
physician retained by Employer is not acceptable to Employee, then physicians
selected by Employer and Employee shall jointly select a third physician to
perform the examination. All costs related to the physical examination of
Employee shall be paid by Employer.


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         4.02 Death. In the event that Employee dies during the Term, Employer
shall pay to Employee's executors, legal representatives or administrators the
base salary specified in Section 3.01 for the remainder of the Term at the same
times specified in Section 3.01 (as reduced by any payments received by such
executors, legal representatives or administrators under any Employer-sponsored
death or disability benefits plan in which Employee was participating).

         4.03 Termination With Cause by Employer. Notwithstanding anything in
this Agreement to the contrary, Employer may terminate this Agreement at any
time for Cause by written notice to Employee. In the event of termination with
Cause, Employee's employment shall terminate immediately upon receipt of such
notice, and the Parties shall have no further duties or obligations to each
other, provided, however, that Employee shall remain subject to all of the
provisions of Article V and Employer shall pay to Employee all sums due to
Employee through the date of termination. For purposes of this Agreement, the
term "Cause" shall mean and be strictly limited to: (i) conviction of a crime
constituting a felony under federal or state law; (ii) determination by Employer
that Employee has committed any material act of dishonesty against Employer;
(iii) gross negligence by Employee in carrying out Employee's duties; (iv)
material breach of this Agreement by Employee; (v) gross misconduct by Employee,
such as intoxication on the job, insubordination, or other misconduct which
could have an adverse effect on the business or operations of Employer; or (vi)
Employee's breach of any of the provisions of Article V of this Agreement.

         4.04 Termination Without Cause by Employer. Employer may terminate this
Agreement in its discretion and for any reason at any time during the Term (a
"Termination Without Cause"), provided, however, that such Termination Without
Cause must be undertaken pursuant to a unanimous decision of a committee of the
Board of Directors of Employer consisting of Thomas J. Depping, Norman J.
Metcalfe and David L. Solomon, or if only one or two members of such committee
remain on the Board of Directors then pursuant to a decision of that one
remaining person or a unanimous decision of those two remaining persons,
respectively. Termination Without Cause shall be effected by delivering written
notice to Employee, which notice shall specify the effective date of the
termination (the "Termination Date"). In the event of Termination Without Cause,
Employee's employment shall terminate on the Termination Date and the Parties
shall have no further duties or obligations to each other, provided, however,
that for a period of one year following the Termination Date, Employer shall pay
to Employee (i) the base compensation specified and as scheduled in Section 3.01
and (ii) for each pay period during such one-year period following the
Termination Date, an amount equal to one twenty-fourth of the cash bonus
received by Employee for the year prior to the Termination Date.

         4.05 Termination by Employee. Employee may terminate this Agreement at
any time by delivering written notice to Employer of Employee's intent to
terminate at least thirty (30) days prior to such intended termination
("Departure Date"). This Agreement shall terminate on the Departure Date and the
Parties shall have no further duties or obligations to each other, provided,
however, that Employee shall remain subject to all of the provisions of Article
V and Employer shall pay to Employee all sums due to Employee through the
Departure Date.



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         4.06 Payments upon Change of Control.

         (a) Change in Control Payment. In the event of a Change of Control (as
hereinafter defined) of Employer, Employer shall pay Employee in one lump sum
payment, within thirty days following the Change of Control, an amount equal to
2.99 multiplied by the sum of the cash compensation paid to Employee for the
year prior to the Change of Control (the "Change of Control Payment"); provided,
however, that if a Change of Control occurs on or prior to December 31, 1999,
the Change of Control Payment shall be an amount equal to 2.99 multiplied by the
sum of (i) the base salary paid to Employee during 1998, as annualized, plus
(ii) the bonus paid to Employee for 1998. "Change of Control" shall mean any of
the following: (i) Employer shall not be the surviving entity in any merger,
consolidation or other reorganization (or survives only as a subsidiary of an
entity other than a previously wholly-owned subsidiary of Employer), (ii)
Employer sells, leases or exchanges all or substantially all of its assets to
any other person or entity (other than a wholly-owned subsidiary of Employer),
(iii) Employer is to be dissolved and liquidated, (iv) any person or entity,
including a "group" as contemplated by Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended, other than any person, entity or group which
owned shares of common stock of Employer immediately prior to the initial public
offering of Employer's common stock, acquires or gains ownership or control
(including, without limitation, power to vote) of more than 50% of the
outstanding shares of Employer's voting stock (based upon voting power), or (iv)
during any consecutive two-year period, individuals who constituted the Board of
Directors of Employer (together with any new directors whose election by the
Board of Directors or whose nomination for election by the shareholders of
Employer was approved by a vote of at least three-quarters of the directors
still in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the Board of Directors then in office.

         (b) Payment Limitation Provision. Notwithstanding the provisions of
Section 4.06(a) above, in the event that in the opinion of tax counsel selected
and compensated by the Company ("Tax Counsel"), the Change of Control Payment
would be subject to excise tax (in whole or part) as a result of Section 280G of
the Code, then the Change of Control Payment shall be reduced or eliminated
until no portion of the Change of Control Payment is subject to excise tax, or
the Change of Control Payment is reduced to zero. For purposes of this
limitation (i) no portion of the Change of Control Payment the receipt or
enjoyment of which Employee shall have waived in writing prior to the date of
payment following termination of the Change of Control Payment shall be taken
into account, (ii) no portion of the Change of Control Payment shall be taken
into account which in the opinion of Tax Counsel does not constitute a
"parachute payment" within the meaning of Section 280G(b)(2) of the Code, (iii)
the Change of Control Payment shall be reduced only to the extent necessary so
that the Change of Control Payment in its entirety constitutes reasonable
compensation for services actually rendered within the meaning of Section
280G(b)(4) of the Code or is otherwise not subject to excise tax, in the opinion
of Tax Counsel, and (iv) the value of any non-cash benefit and all deferred
payments and benefits included in the Change of Control Payment shall be
determined by the mutual agreement of the Employer and Employee in accordance
with the principles of Sections 280G(d)(3) and (4) of the Code.




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                                    ARTICLE V

                                 PROPERTY RIGHTS

         5.01 Non-Competition. During the Term of this Agreement and for a
period of one year after the termination of this Agreement or the expiration of
the Term, as the case may be (the "Non-Compete Period"), Employee shall not,
directly or indirectly, either as an employee, employer, consultant, agent,
lender, principal, partner, stockholder (other than ownership of not more than
five percent (5%) of the securities of a publicly held corporation purchased
through a broker on an established stock exchange or the Nasdaq system),
corporate officer, director, or in any other individual or representative
capacity, engage or participate in an operating capacity in any business in the
leasing sector that is in competition in any manner whatsoever with the business
engaged in by Employer or any of its subsidiaries or affiliates; provided,
however, that during the Non-Compete Period Employee may participate in the
leasing sector as an employee of an investment banking firm.

         5.02 Solicitation. During the Non-Compete Period, Employee agrees not
to, directly or indirectly, (i) call on or solicit, with respect to the
activities prohibited by Section 5.01 of this Agreement, any person, firm,
corporation or other entity who or which as of the date hereof, or within two
years prior hereto, is or was a customer, referral source or distributor of
Employer or any of its subsidiaries or affiliates, or (ii) solicit, influence or
recommend the employment of any person who was employed by Employer or any of
its subsidiaries or affiliates on a full or part-time basis during the Term;
provided, however, that if requested by any employee of Employer or any of its
subsidiaries or affiliates, Employee shall have the right to give a reference
with respect to such employee.

         5.03 Confidentiality. In return for Employee's promises under this
Article V, Employee shall receive and be entrusted with certain confidential
and/or secret information of a proprietary nature, including without limitation
names and addresses of customers of Employer and its subsidiaries and
affiliates, and business plans of Employer and its subsidiaries and affiliates.
Employee shall not directly or indirectly disclose or use, during the Term or at
any time thereafter, any such information which is not otherwise publicly
available.

         5.04 Reasonableness of Restrictions. Employee agrees that (i) the
covenants contained in Section 5.01, 5.02 and 5.03 hereof are necessary for the
protection of Employer's business goodwill, (ii) a portion of the compensation
paid to Employee under this Agreement is paid in consideration of the covenants
herein contained, the sufficiency of which consideration is hereby acknowledged,
(iii) Employee is not, and under this Agreement will not be, engaged in a common
calling, and (iv) if the scope of any restriction contained in Sections 5.01,
5.02 and 5.03 hereof is too broad to permit enforcement of such restriction to
its full extent, then such restriction shall be enforced to the maximum
permitted by law, and the Parties consent that such scope may be judicially
modified accordingly in any proceeding brought to enforce such restriction. The
existence of any claim or cause of action of Employee against Employer, whether
predicated on this Agreement or otherwise, shall not constitute a defense to the
enforcement by Employer of these covenants.





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         5.05 Copy of Covenants. Until the expiration of the applicable
restrictions, Employee will provide, and Employer similarly may provide, a copy
of the covenants contained in Sections 5.01, 5.02 and 5.03 of this Agreement to
any business or enterprise which Employee may (i) directly or indirectly own,
manage, operate, finance, join, control or participate in the ownership,
management, operation, financing, or control of, (ii) serve as an officer,
director, employee, partner, principal, agent, representative, consultant leader
or otherwise, or (iii) with which he may use or permit his name to be used.

                                   ARTICLE VI

                               GENERAL PROVISIONS

         6.01 Arbitration. Employee and Employer agree that all disputes
concerning the terms of this Agreement or Employee's employment with Employer
will be subject solely to binding arbitration. The arbitrator selection and
conduct of the arbitration will be pursuant to the Commercial Arbitration Rules
of the American Arbitration Association. The place of the arbitration shall be
Houston, Texas and shall be governed by the laws of the State of Texas.

         6.02 Notices. Any notices to be given hereunder by either party to the
other may be effected either by personal delivery in writing or by mail,
registered or certified, postage prepaid with return receipt requested:

         If to Employer:

                  First Sierra Financial, Inc.
                  Texas Commerce Tower
                  600 Travis Street, Suite 7050
                  Houston, Texas  77002
                  Attention:  Chief Executive Officer

         If to Employee:

                  Michael A. Sabel
                  3333 N Street, N.W., #5
                  Washington, D.C. 20007

Mailed notices shall be addressed to the parties at the addresses set forth
above, but each party may change his address by written notice in accordance
with this Section 6.02. Notices delivered personally shall be deemed
communicated as of actual receipt; mailed notices shall be deemed communicated
as of ten (10) days after mailing.



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         6.03 Entire Agreement. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with respect
to the employment of Employee by Employer and contains all of the covenants and
agreements between the Parties with respect to such employment in any manner
whatsoever.

         6.04 Certain Acknowledgements. Employee by his execution and delivery
of this Agreement represents to Employer as follows:

         (i)      Employee has been advised by Employer to have this Agreement
                  reviewed by an attorney representing Employee, and Employee
                  has either had this Agreement reviewed by such attorney or has
                  chosen not to have this Agreement reviewed because Employee,
                  after reading the entire Agreement, fully and completely
                  understands each provision and has decided not to obtain the
                  services of an attorney.

         (ii)     Employee either on his own or with the assistance and advice
                  of his attorney has in particular reviewed Article V and
                  understands and accepts (a) the restrictions imposed by
                  Article V and Sections 5.01, 5.02 and 5.03 and (b) the
                  restrictions imposed upon Employee pursuant to these sections
                  are reasonable and necessary for the protection of the
                  property rights of Employer and its affiliates.

         6.05 Headings. The headings or titles to Sections or Articles in this
Agreement are intended solely for convenience of the parties and no provision of
this Agreement is to be construed by reference to the heading or title of any
section.

         6.06 Amendment or Modification; Waiver. No provision of this Agreement
may be amended, modified or waived unless such amendment, modification or waiver
is authorized by Employer and is agreed to in writing, signed by Employee and by
the Chief Executive Officer of Employer. Except as otherwise specifically
provided in this Agreement, no waiver by any party hereto of any breach by any
other party hereto of any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of a similar or
dissimilar provision or condition at the same or at any prior or subsequent
time; nor shall the receipt or acceptance of Employee's employment be deemed a
waiver of any condition or provision hereof. Employee acknowledges that from
time to time Employer may establish, maintain and distribute employee manuals or
handbooks or personnel policy manuals, and officers or other representatives of
Employer may make written or oral statements relating to personnel policies and
procedures. Such manuals, handbooks, and statements are intended only for
general guidance. No policies, procedures, or statements of any nature by or on
behalf of Employer (whether written or oral, and whether or not contained in any
employee manual or handbook or personnel policy manual), and no acts or
practices of any nature shall be construed to modify this Agreement or to create
express or implied obligations of Employer.

         6.07 Assignability. Employee shall not assign, pledge or encumber any
interest in this Agreement or any part thereof without the express written
consent of Employer, this Agreement being personal to Employee. This Agreement
shall, however, inure to the benefit of Employee's 


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estate, dependents, beneficiaries and legal representatives. This Agreement
shall not be assignable by Employer to any entity that is not an affiliate of
Employer without the written consent of Employee.

         6.08 Governing Law. THIS AGREEMENT HAS BEEN NEGOTIATED, EXECUTED AND
DELIVERED IN THE STATE OF TEXAS, AND SHALL IN ALL RESPECTS BE INTERPRETED,
CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

         6.09 Severability. Each provision of this Agreement constitutes a
separate and distinct undertaking, covenant and/or provision hereof. In the
event that any provision of this Agreement shall finally be determined to be
unlawful, such provision shall be deemed severed from this Agreement, but every
other provision of this Agreement shall remain in full force and effect, and in
substitution for any such provision held unlawful, there shall be substituted a
provision of similar import reflecting the original intent of the parties hereto
to the maximum extent permissible under law.

         6.10 No Duress. Employee acknowledges that no force, fear or threats or
duress of any kind have been used to obtain the agreements and covenants
contained in this Agreement.




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         IN WITNESS WHEREOF, this Agreement is executed in Houston, Texas on the
day and year first above written.

                                          FIRST SIERRA FINANCIAL, INC.



                                          By: 
                                              ----------------------------------
                                              Name: Thomas J. Depping
                                              Title:   Chief Executive Officer




                                          --------------------------------------
                                          Name: Michael A. Sabel





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