EMPLOYMENT AGREEMENT



         THIS AGREEMENT is made as of April 1, 2001, by and between iStar

Financial Inc., a Maryland corporation (the "Company"), and Spencer Haber (the

"Executive").





                          W I T N E S S E T H  T H A T:



         WHEREAS, the Company wishes to provide for the employment by the

Company of Executive, and Executive wishes to serve the Company, in the

capacities and on the terms and conditions set forth in this Agreement;



         NOW, THEREFORE, it is hereby agreed as follows:



         1. EMPLOYMENT PERIOD. The Company shall continue to employ Executive,

and Executive shall continue to serve the Company, on the terms and conditions

set forth in this Agreement. The term of Executive's employment under this

Agreement shall be deemed to have commenced on April 1, 2001 (the "Effective

Date") and, unless earlier terminated in accordance with Section 4 hereof, shall

continue through April 1, 2004; provided that Executive may elect on or before

March 29, 2004 to extend this Agreement for one additional year if the

"Determination Date" (as defined in the restricted stock agreement attached

hereto as Exhibit A (the "Restricted Stock Agreement")) has not occurred by

March 29, 2004 (such period of employment being referred to hereunder as the

"Employment Period").



         2. POSITION AND DUTIES.



         (a) During the Employment Period, Executive shall serve as President

and Chief Financial Officer ("CFO") and, subject to Executive's election to the

Board of Directors of the Company (the "Board") by the Company's shareholders, a

member of the Board. Executive shall have such duties and responsibilities as

are customarily assigned to the president and chief financial officer of a

company of the size and nature of the Company, and such other duties and

responsibilities not inconsistent therewith as may from time to time be assigned

to him by the Board and the Chief Executive Officer of the Company ("CEO");

provided that any CEO or the Board may assign all or a portion of Executive's

duties related to the CFO function to other personnel from time to time,

provided that any such personnel will report to Executive. The Company shall use

all reasonable efforts to maintain Executive as a member of the Board throughout

the Employment Period. Executive agrees that upon the termination of his

employment hereunder for any reason his membership on the Board shall

immediately and automatically terminate, and Executive shall execute such

documents as may be reasonably necessary in order to accomplish such termination

from the Board.



         (b) In his capacity as President and CFO, Executive shall report

directly to the CEO.





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         (c) During the Employment Period, and excluding any periods of vacation

and sick leave to which Executive is entitled, Executive shall devote

substantially all of his business time and attention to the business and affairs

of the Company and perform, faithfully and diligently, his duties and

responsibilities hereunder. It shall not be considered a violation of the

foregoing for Executive to: (i) serve on the board of directors, or board

committees, of Capital Thinking, Inc. and Juice Software, Inc. (ii) serve on

other corporate, industry, civic, social or charitable boards or committees or

engage in charitable activities and community affairs provided that the CEO

approves Executive's service on such corporate or industry boards or committees

which consent shall not be unreasonably withheld; or (iii) manage his own

personal investments and affairs; provided that the foregoing activities do not

materially interfere with the performance of Executive's responsibilities

hereunder. To the extent that Executive receives remuneration for his service on

a board on which his membership is not related to an investment made by the

Company, he may retain such remuneration. Executive shall remit all other board

membership remuneration to the Company.



         3. COMPENSATION.



         (a) RESTRICTED STOCK. On the effective date of this Agreement,

Executive shall receive a restricted stock grant of 500,000 shares of Company

common stock (the "Restricted Stock Grant"). The Restricted Stock Grant will be

granted in accordance with, and subject to, the terms of the Restricted Stock

Agreement. The terms of the Restricted Stock Agreement are hereby incorporated

by reference into this Agreement.



         (b) FRINGE BENEFITS.



            (i) REIMBURSEMENT OF EXPENSES AND ADMINISTRATIVE SUPPORT. The

Company shall pay or reimburse Executive, upon the presentation of appropriate

documentation of such expenses, for all reasonable travel and other expenses

incurred by Executive in the ordinary course of performing his obligations under

this Agreement. The Company further agrees to furnish Executive with office

space, administrative support and other assistance and accommodations as shall

be reasonably required by Executive in the performance of his duties hereunder.



            (ii) PARTICIPATION IN BENEFIT PLANS. Executive shall be entitled to

participate, during the Employment Period, in the Company's benefit plans,

programs and arrangements, including but not limited to qualified and

non-qualified pensions and retirement plans, supplemental pension and retirement

plans, group hospitalization, health, medical, vision, dental care, death

benefit, disability, post-retirement welfare plans, and other present and future

employee benefit plans, programs and arrangements of the Company for which key

executives are or shall become eligible (collectively, the "Benefit Plans"), on

no less favorable terms than other key executives of the Company other than the

CEO. This will confirm that Executive's service with the Company, for purposes

of determining his entitlements and benefits under the Benefit Plans, commenced

on June 15, 1998. The foregoing shall not be construed as a guaranty of, or as

an obligation on the part of the Company to provide, any future awards





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including, but not limited to, stock options, restricted stock or other

performance awards under any Company incentive plans from time to time in effect

for its executives and other employees.



            (iii) VACATION. During the Employment Period, Executive shall be

entitled to four weeks paid vacation per annum. Executive shall not be entitled

to any cash payment in respect of any unused vacation time.



         (c) OTHER COMPENSATION. Executive shall not be entitled to any base

salary or bonus during the Employment Period.



      4. TERMINATION OF EMPLOYMENT.



         (a) DEATH OR DISABILITY. Executive's employment hereunder shall

terminate automatically upon Executive's death. The Company shall be entitled to

terminate Executive's employment hereunder because of Executive's "Disability."

For this purpose, "Disability" means that Executive has been unable, for a

period of not less than (x) 120 consecutive days, or (y) 180 days within any 12

month period, to perform Executive's duties under this Agreement, as a result of

physical or mental illness, injury or impairment. A termination of Executive's

employment by the Company due to Disability shall be communicated to Executive

by written notice, and shall be effective on the 30th day after receipt of such

notice by Executive (the "Disability Effective Date"), unless Executive returns

to full-time performance of his duties hereunder before the Disability Effective

Date.



         (b) BY THE COMPANY.



            (i) The Company may terminate Executive's employment hereunder for

Cause or without Cause. "Cause" means (w) the conviction of Executive (including

a guilty plea) for the commission of any felony, (x) Executive commits a fraud

on the Company which results in material damage to the Company, or (y) willful

and complete abandonment by Executive of his duties hereunder.



            (ii) A termination of Executive's employment hereunder for Cause or

without Cause may only be effected in accordance with the following procedures.

The Company shall give Executive written notice of its intention to terminate

Executive's employment for Cause or without Cause, and, if for Cause, setting

forth in reasonable detail the specific circumstances that it considers

constitute Cause and the specific provision(s) of this Agreement on which it

relies, and stating the date, time and place of the Special Members Meeting

("Notice of Termination"). "Special Members Meeting" means a meeting of the

Board, called and held specifically for the purpose of considering Executive's

termination, that takes place not less than ten, and not more than twenty,

business days after Executive receives the Notice of Termination. Executive

shall be given an opportunity, together with his counsel, to be heard at the

Special Members Meeting if the termination is for Cause. Executive's termination

shall be effective when and if a resolution is duly adopted at the Special

Members Meeting terminating his employment with the affirmative vote of 75% or

more





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of the members of the Board excluding Executive, subject to, if applicable,

DE NOVO review of the question whether Cause existed through arbitration in

accordance with Section 11.



            (iii) A termination of Executive's employment hereunder by the

Company without Cause in accordance with subparagraph (ii) above shall not

constitute a breach of this Agreement.



         (c) BY EXECUTIVE.



            (i) Executive may terminate his employment hereunder for Good Reason

or without Good Reason. "Good Reason" means any of the following that is not

cured within 30 calendar days following written notice thereof from Executive to

the Company in accordance with Section 4(c)(ii) hereof:



                  (A) failure by the Company to maintain Executive as President

and CFO of the Company with such duties as are described in Section 2(a)

(subject to the allowable delegation of Executive's duties as described in

Section 2(a)) or failure of the Executive to be elected or reelected as a member

of the Board (other than in respect of Executive's voluntary resignation from,

or failure to stand for reelection to, the Board);



                  (B) the assignment to Executive of any duties or

responsibilities inconsistent in any respect with those customarily associated

with the positions to be held by Executive pursuant to this Agreement or any

diminution in Executive's position, authority, duties or responsibilities in a

manner inconsistent with the terms and provisions of this Agreement (subject to

the allowable delegation of Executive's duties as described in Section 2(a));



                  (C) any requirement that Executive's services hereunder be

rendered primarily at a location or locations other than Executive offices of

the Company in the borough of Manhattan in New York City; provided, however,

that Executive offices may be relocated within the borough of Manhattan in New

York City;



                  (D) any purported termination of Executive's employment

hereunder by the Company for a reason or in a manner not expressly permitted by

this Agreement;



                  (E) the failure of any successor to all or substantially all

of the assets or business of the Company to promptly assume in writing all of

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