FORM OF ADVISORY AGREE. BY & BETWEEN CO. & AFM

Exhibit 10.1


FORM OF
ADVISORY AGREEMENT

THIS AGREEMENT is entered into as of , 1998 by and between
AMERICA FIRST MORTGAGE INVESTMENTS INC., a Maryland corporation (the "COMPANY"),
and AMERICA FIRST MORTGAGE ADVISORY CORPORATION, a Maryland corporation (the
"ADVISOR").

W I T N E S S E T H:

WHEREAS, the Company is a newly-formed corporation that intends to qualify
as a real estate investment trust (a "REIT") under Sections 856 through 860 of
the Internal Revenue Code of 1986, as amended (the "CODE");

WHEREAS, the Company, directly or through its Subsidiaries, invests in
adjustable-rate Mortgage Securities, Mortgage Loans and other real estate
related investments meeting the investment criteria established from time to
time by its Board of Directors (collectively, "MORTGAGE ASSETS"); and

WHEREAS, the Company desires to retain the Advisor to manage the operations
and investments of the Company and its Subsidiaries and to perform
administrative services for the Company and its Subsidiaries, each in the manner
and on the terms set forth in this Agreement.

NOW THEREFORE, in consideration of the mutual agreements herein set forth,
the parties hereto agree as follows:

SECTION 1. DEFINITIONS. Capitalized terms used herein shall have the
respective meanings assigned them in this Section 1:


(a) "Agreement" means this Advisory Agreement between the Company and the
Advisor, as amended from time to time.

(b) "Closing Date" means _____________, 1998.

(c) "Common Stock" means the common stock, par value $0.01 per share, of
the Company.

(d) "Governing Instruments" means the articles of incorporation and
bylaws, in the case of a corporation, the limited liability company agreement,
in the case of a limited liability company and the partnership agreement, in the
case of a partnership.

(e) "Independent Directors" means those members of the Board of Directors
of the Company who are neither executive officers of the Company nor executive
officers or directors of the Advisor.





(f) "Mortgage Loans" means mortgage loans that are eligible for inclusion
in a pool that would collateralize Mortgage Securities.

(g) "Mortgage Securities" means mortgaged-backed securities, including
adjustable- rate securities and private-issue securities.

(h) "Net Income" means the net income of the Company determined in
accordance with GAAP before the Advisor's incentive compensation, the deduction
for dividends paid and any net operating loss deductions arising from losses in
prior periods. The Company's interest expenses for borrowed money shall be
deducted in calculating Net Income.

(i) "Qualified REIT Subsidiary" means a corporation 100% of the stock of
which is held by the Company at all times during the existence of the
corporation, consistent with the definition of Qualified REIT Subsidiary in
Section 856(i)(2) of the Code.

(j) "Return on Equity" for any period means that amount produced by
dividing the Company's Net Income for such period by its Stockholder's Equity
for such period. For purposes of calculating the incentive compensation payable
to the Advisor, Return on Equity is not related to the actual distributions
received by stockholders.

(k) "Stockholders' Equity" means the excess of total assets of the Company
minus its total liabilities as determined in accordance with GAAP.

(l) "Subsidiary" shall mean any corporation, whether now existing or in
the future established, of which the Company, directly or indirectly, owns more
than 50% of the outstanding voting securities of any class or classes, any
business trust, partnership or similar non-corporate form in which the Company,
directly or indirectly, owns more than 50% of the beneficial interests.

(m) "Ten-Year US Treasury Rate" means the average of the weekly average
yield to maturity for U.S. Treasury securities (adjusted to a constant maturity
of ten years) as published weekly by the Federal Reserve Board during a quarter.

SECTION 2. GENERAL DUTIES OF THE ADVISOR. Subject to the supervision of
the Board of Directors, the Advisor shall provide services to the Company, and
to the extent directed by the Board of Directors, shall provide similar services
to any Subsidiary of the Company as follows:

(a) administer the day-to-day operations of the Company and its
Subsidiaries and perform or supervise the performance of such administrative
functions necessary in the management of the Company and its Subsidiaries as may
be agreed upon by the Advisor and the Board of Directors including, without
limitation, collection of revenues and payment of expenses, debts and
obligations and maintenance of appropriate computer services to provide such
administrative functions;

(b) serve as the Company's consultant with respect to formulation of
investment criteria and preparation of policy guidelines by the Board of
Directors ("GUIDELINES");


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(c) represent the Company in connection with the purchase, accumulation,
financing and securitization of Mortgage Assets;

(d) furnish reports and statistical and economic research to the Company
regarding the investments, activities and results of operations of the Company
and its Subsidiaries and the services performed for the Company and its
Subsidiaries by the Advisor;

(e) monitor and provide to the Board of Directors on an on-going basis
price information and other data regarding the market maintained by certain
nationally recognized dealers in Mortgage Assets identified by the Board of
Directors from time to time, and provide data and advice to the Board of
Directors in connection with the selection and identification of such dealers;

(f) communicate on behalf of the Company with the holders of equity and
debt securities of the Company as required to satisfy the continuous reporting
and other requirements of any governmental or regulatory bodies or agencies and
maintain effective relations with such holders of the Company's securities;

(g) to the extent not otherwise subject to an agreement executed by the
Company, designate a servicer for those Mortgage Loans sold to the Company by
originators or sellers that have elected not to service such loans and arrange
for the monitoring and administering of such servicers;

(h) counsel the Company in connection with policy decisions to be made by
the Board of Directors;

(i) upon request by, and in accordance with the directions of, the Board
of Directors, invest or reinvest any money of the Company;

(j) engage in hedging activities on behalf of the Company or any of its
Subsidiaries consistent with the Company's qualification as a REIT and any other
directions of the Board of Directors;

(k) arrange for the issuance of Mortgage Securities from pools of Mortgage
Loans acquired by the Company and its Subsidiaries, and provide to the Company
directly or through another appropriate party all services in connection with
the creation of Mortgage Securities including:

(i) serving as consultant with respect to the structuring
of each series of Mortgage Securities;

(ii) negotiating the rating requirements with rating
agencies with respect to the rating of each series of Mortgage
Securities;

(iii) accumulating and reviewing all Mortgage Loans
which may secure or constitute the mortgage pool for each series
of Mortgage Securities;


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(iv) negotiating all agreements and credit enhancements with
respect to each series of Mortgage Securities;

(v) issuing commitments on behalf of the Company and its
Subsidiaries to purchase Mortgage Loans to be used to secure or
constitute the mortgage pool for each series of Mortgage
Securities;

(vi) organizing and administering all activities in
connection with the closing of each series of Mortgage
Securities, including all negotiations and agreements with
underwriters, trustees, servicers, master servicers and other
parties; and

(vii) performing such other services as may be required
from time to time for completing the creation of each series of
Mortgage Securities;

(l) provide to the Company directly or through another appropriate party
all services in connection with the administration of each series of Mortgage
Securities created by the Company;

(m) provide the executive and administrative personnel and services
required in rendering the foregoing services to the Company and its
Subsidiaries;

(n) supervise compliance with REIT provisions of the Code and maintain
exemption from the Investment Company Act of 1940, as amended;

(o) qualify and cause the Company to qualify to do business in all
applicable jurisdictions;

(p) cause the Company to retain qualified accountants and tax experts for
at least a two year period to assist in developing appropriate accounting
procedures and testing systems and conducting quarterly compliance reviews;

(q) comply with and use its best efforts to cause the Company to comply
with all applicable laws; and

(r) as approved and directed by the Board of Directors, perform such other
services as may be required from time to time for management and other
activities relating to the assets of the Company and its Subsidiaries as the
Advisor shall deem appropriate under the particular circumstances.

SECTION 3. ADDITIONAL ACTIVITIES OF ADVISOR. Nothing herein shall prevent
the Advisor or any of its affiliates from engaging in other businesses or from
rendering services of any kind to any other person or entity, including
investment in or advisory service to others investing in any type of real estate
investment, including investments which meet the principal investment objectives
of the Company and its Subsidiaries. Directors, officers, employees and agents
of the Advisor or affiliates of the Advisor may serve as directors, officers,
employees, agents, nominees or signatories for the Company or any of its
Subsidiaries, to the extent

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permitted by its Governing Instruments, as from time to time amended, or by any
resolutions duly adopted by the Board of Directors pursuant to the Company's
Governing Instruments. When executing documents or otherwise acting in such
capacities for the Company, such persons shall use their respective titles in
the Company.

SECTION 4. BANK ACCOUNTS. At the direction of the Board of Directors, the
Advisor may establish and maintain one or more bank accounts in the name of the
Company or any of its Subsidiaries, and may collect and deposit into any such
account or accounts, and disburse funds from any such account or accounts, under
such terms and conditions as the Board of Directors may approve; and the Advisor
shall from time to time render appropriate accounting of such collections and
payments to the Board of Directors and, upon request, to the auditors of the
Company or any of its Subsidiaries.

SECTION 5. RECORDS; CONFIDENTIALITY. The Advisor shall maintain
appropriate books of account and records relating to services performed
hereunder, and such books of account and records shall be accessible for
inspection by representatives of the Company or any of its Subsidiaries at any
time during normal business hours. The Advisor shall keep confidential any and
all information it obtains from time to time in connection with the services it
renders under this Agreement and shall not disclose any portion thereof to
non-affiliated third parties except with the prior written consent of the
Company or any of its Subsidiaries.

SECTION 6. OBLIGATIONS OF ADVISOR.

(a) The Advisor shall require each seller or transferor of Mortgage Assets
to the Company to make such representations and warranties regarding such
Mortgage Assets as may, in the judgment of the Advisor, be necessary and
appropriate. In addition, the Advisor shall take such other action as it deems
necessary or appropriate with regard to the protection of the Company's Mortgage
Assets and other investments.

(b) The Advisor shall refrain from any action which, in its sole judgment
made in good faith, would adversely affect the status of the Company as a REIT
or, if applicable, any of its Subsidiaries as either a Qualified REIT Subsidiary
or a partnership for federal income tax purposes or which, in its sole judgment
made in good faith, would violate any law, rule or regulation of any
governmental or regulatory body or agency having jurisdiction over the Company
or any such Subsidiary or which would otherwise not be permitted by the
Company's or any such Subsidiary's Governing Instruments. If the Advisor is
ordered to take any such action by the Board of Directors, the Advisor shall
promptly notify the Board of Directors of the Advisor's judgment that such
action would adversely affect the status of the Company or any of its
Subsidiaries under the Code or violate any such law, rule or regulation or the
Governing Instruments. Notwithstanding the foregoing, the Advisor, its
directors, officers, stockholders and employees shall not be liable to the
Company, any Subsidiary of the Company, the Independent Directors or the
Company's or any Subsidiary's stockholders for any act or omission by the
Advisor, its directors, officers, stockholders or employees except as provided
in Section 11 of this Agreement.


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SECTION 7. COMPENSATION.

(a) The Company shall pay to the Advisor, for services rendered under this
Agreement, an annual base management fee in an amount equal to 1.10% of the
first $300 million of Stockholders' Equity of the Company, plus .80% of the
portion of Stockholders' Equity of the Company above $300 million, payable each
month (pro rated based on the number of days elapsed during any partial month)
in arrears, commencing with the month in which the Closing Date occurs. The
base management fee shall be calculated by the Advisor within 15 days after the
end of each month, and such calculation shall be promptly delivered to the
Company. The Company shall pay the base management fee payable pursuant to this
Section 7(a) for each month within 30 days after the end of each month.

(b) If the Company's annualized Return on Equity for any fiscal quarter
(computed by multiplying the Return on Equity for such fiscal quarter by four)
is in excess of the Ten-Year U.S. Treasury Rate plus 1%, the Company shall pay
the Advisor as incentive compensation for such quarter an amount equal to 20% of
the dollar amount by which the annualized Return on Equity of the Company for
such fiscal quarter exceeds the amount necessary to provide an annualized Return
on Equity equal to the Ten-Year U.S. Treasury Rate plus 1%. The Advisor shall
compute the incentive compensation payable under this Section 7(b) within 45
days after the end of each fiscal quarter. The Company shall pay the incentive
compensation with respect to each fiscal quarter within 15 days following the
delivery to the Company of the Advisor's written statement setting forth the
computation of the incentive fee for such quarter.

(c) If loans are made to the Company by an affiliate of the Advisor, the
maximum amount of interest that may be charged by such affiliate shall be the
prime rate publicly announced by Citibank, N.A. from time to time plus 1% per
year.

SECTION 8. EXPENSES OF THE COMPANY. The Company or any of its
Subsidiaries shall pay all of its expenses and shall reimburse the Advisor for
documented expenses of the Advisor incurred on its behalf. Notwithstanding the
foregoing, the Advisor shall be responsible for paying the compensation of the
Company's officers and other personnel required for the Company's day-to-day
operations.

SECTION 9. REIMBURSEMENT OF EXPENSES INCURRED BY THE ADVISOR.

Expenses incurred by the Advisor on behalf of the Company shall be
reimbursed monthly to the Advisor within 30 days after the end of each month.
The Advisor shall prepare a statement documenting the expenses of the Company
and those incurred by the Advisor on behalf of the Company during each month,
and shall deliver such statement to the Company within 15 days after the end of
each month.

SECTION 10. MONITORING SERVICING. The Advisor will monitor and administer
the servicing of the Company's Mortgage Loans, other than those Mortgage Loans
pooled to back Mortgage Securities. Such monitoring and administrative services
will include, but not be limited to, the following activities: serving as the
Company's consultant with respect to the servicing of Mortgage Loans; collection
of information and submission of reports pertaining to the Mortgage Loans and to
moneys remitted to the Advisor or the Company by servicers;

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periodic review and evaluation of the performance of each servicer to determine
its compliance with the terms and conditions of the Servicing Agreement and, if
deemed appropriate, recommending to the Company the termination of such
Servicing Agreement; acting as a liaison between servicers and the Company and
working with servicers to the extent necessary to improve their servicing
performance; review of and recommendations as to fire losses, easement problems
and condemnation, delinquency and foreclosure procedures with regard to the
Mortgage Loans; review of servicers' delinquency, foreclosing and other reports
on Mortgage Loans; supervising claims filed under any mortgage insurance
policies; and enforcing the obligation of any servicer to repurchase Mortgage
Loans from the Company. The Advisor may enter into subcontracts with other
parties, including its affiliates, to provide any such services for the Advisor.

SECTION 11. LIMITS OF ADVISOR RESPONSIBILITY.

(a) The Advisor assumes no responsibility under this Agreement other than
to render the services called for hereunder in good faith and shall not be
responsible for any action of the Board of Directors in following or declining
to follow any advice or recommendations of the Advisor, including as set forth
in Section 6(b) of this Agreement. The Advisor and its directors, officers,
stockholders and employees will not be liable to the Company, any of its
Subsidiaries, the Independent Directors or the Company's or its Subsidiary's
stockholders for any acts or omissions by the Advisor, its directors, officers,
stockholders or employees under or in connection with this Agreement, except by
reason of acts or omissions constituting bad faith, willful misconduct, gross
negligence or reckless disregard of their duties. The Company or its Subsidiary
shall reimburse, indemnify and hold harmless the Advisor and its stockholders,
directors, officers and employees of and from any and all expenses, losses,
damages, liabilities, demands, charges and claims of any nature whatsoever
(including, without limitation, reasonable attorneys' fees) in respect of or
arising from any acts or omissions of the Advisor or its stockholders,
directors, officers and employees made in good faith in the performance of the
Advisor's duties under this Agreement and not constituting bad faith, willful
misconduct, gross negligence or reckless disregard of its duties.

(b) The Advisor shall reimburse, indemnify and hold harmless the Company,
any Subsidiary, or any of their stockholders, directors, officers and employees
from any and all expenses, losses, damages, liabilities, demands, charges and
claims (including, without limitation, reasonable attorneys' fees) arising out
of any intentional misstatements of fact made by the Advisor in connection with
this Agreement and the services to be rendered hereunder.

SECTION 12. NO JOINT VENTURE. The Company and the Advisor are not
partners or joint venturers with each other and nothing herein shall be
construed to make them such partners or joint venturers or impose any liability
as such on either of them.

SECTION 13. TERM. This Agreement shall commence on the Closing Date and
shall continue in force for a period of five years and thereafter it may be
extended only with the consent of the Advisor and by the affirmative vote of a
majority of the Board of Directors, including a majority of the Independent
Directors. Each extension shall be executed in writing by the parties hereto
before the expiration of this Agreement or any extension thereof. Each

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such extension shall be effective for a period corresponding to the fiscal year
of the Company, but in no case exceeding one year.

SECTION 14. TERMINATION BY COMPANY FOR CAUSE. At the option of the
Company, this Agreement or any extension hereof shall be and become terminated
upon 60 days' written notice of termination from the Board of Directors to the
Advisor if any of the following events shall occur:

(a) if the Advisor shall materially breach any provision of this Agreement
and, after notice of such breach, shall not cure such breach within 30 days; or

(b) there is entered an order for relief or similar decree or order with
respect to the Advisor by a court having competent jurisdiction in an
involuntary case under the federal bankruptcy laws as now or hereafter
constituted or under any applicable federal or state bankruptcy, insolvency or
other similar laws; or the Advisor (i) ceases or admits in writing its inability
to pay its debts as they become due and payable, or makes a general assignment
for the benefit of, or enters into any composition or arrangement with,
creditors, (ii) applies for or consents (by admission of material allegations of
a petition or otherwise) to the appointment of a receiver, trustee, assignee,
custodian, liquidator or sequestrator (or other similar official) for itself or
for any substantial part of its assets or authorizes such an application or
consent, (iii) authorizes or files a voluntary petition in bankruptcy, or
applies for or consents (by admission of material allegations of a petition or
otherwise) to the application of any bankruptcy, reorganization, arrangement,
readjustment of debt, insolvency, dissolution, liquidation or other similar law
of any jurisdiction, or authorizes such application or consent, or (iv) permits
or suffers all or any substantial part of its assets to be sequestered or
attached by court order and the order remains undismissed for 30 days; or
proceedings seeking the appointment of a receiver, trustee, assignee, custodian,
liquidator or sequestrator (or other similar official) for the Advisor or for
any substantial part of its assets are commenced without authorization, consent
or application against the Advisor and continue undismissed for 30 days; or
proceedings to sequester or attach all or any substantial part of the Advisor's
assets are instituted against the Advisor without authorization, consent and
application and are approved as properly instituted and remain undismissed for
30 days or result in adjudication of bankruptcy or insolvency.

If any of the events specified in this Section 14 shall occur, the Advisor shall
give prompt written notice thereof to the Board of Directors upon the happening
of such event.

SECTION 15. TERMINATION WITHOUT CAUSE. Either party may terminate this
Agreement without cause upon 60 days prior written notice, by (i) in the case of
termination by the Company, a majority vote of the Independent Directors or by a
vote of the holders of a majority of the outstanding shares of the Company's
Common Stock, and (ii), in the case of termination by the Advisor, by a majority
vote of the Board of Directors of the Advisor. In the event this Agreement is
terminated by the Company without cause, or in the event this Agreement is not
renewed by the Company without cause, the Company, in addition to its
obligations under Section 17, shall pay the Advisor a termination or non-renewal
fee determined by an independent appraisal. Such appraisal shall be conducted
by a nationally-recognized appraisal firm mutually agreed upon by the parties
and the costs of such appraisal shall be borne equally by the parties. If the
parties are unable to agree upon such appraisal firm within 30 days

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following notice of termination or, in the event of non-renewal, the termination
date, then each party shall as soon as reasonably practicable, but in no event
more than 45 days following notice of termination or, in the event of
non-renewal, the termination date, choose a nationally-recognized independent
appraisal firm to conduct an appraisal. In such event, (i) the termination fee
shall be deemed to be the average of the appraisals as conducted by each party's
chosen appraiser and (ii) each party shall pay the costs of its appraiser so
chosen. Any appraisal conducted hereunder shall be performed no later than 45
days following selection of the appraiser or appraisers.

SECTION 16. ASSIGNMENTS.

(a) Except as set forth in Section 16(b) of this Agreement, this Agreement
shall terminate automatically in the event of its assignment, in whole or in
part, by the Advisor, unless such assignment is consented to in writing by the
Company with the approval of a majority of the Independent Directors. Any such
assignment shall bind the assignee hereunder in the same manner as the Advisor
is bound. In addition, the assignee shall execute and deliver to the Company a
joinder agreement to this Agreement naming such assignee as Advisor. This
Agreement shall not be assigned by the Company without the prior written consent
of the Advisor, except in the case of assignment by the Company to a REIT or
other organization which is a successor (by merger, consolidation or purchase of
assets) to the Company, in which case such successor organization shall be bound
hereunder and by the terms of such assignment in the same manner as the Company
is bound hereunder.

(b) Notwithstanding any provision of this Agreement, the Advisor may
subcontract and assign any or all of its responsibilities under Sections 2(k),
2(l) and 10 of this Agreement to any of its affiliates, and the Company hereby
consents to any such assignment and subcontracting.

SECTION 17. ACTION UPON TERMINATION. From and after the effective date of
termination of this Agreement, pursuant to Sections 14, 15 or 16 of this
Agreement, the Advisor shall not be entitled to compensation for further
services hereunder, but shall be paid all compensation accruing to the date of
termination, including deferred incentive compensation which is recoverable in
accordance with Section 7(c) of this Agreement. Upon such termination, the
Advisor shall forthwith:

(a) after deducting any accrued compensation and reimbursement for its
expenses to which it is then entitled, pay over to the Company or any of its
Subsidiaries all money collected and held for the account of the Company or any
of its Subsidiaries pursuant to this Agreement;

(b) deliver to the Board of Directors a full accounting, including a
statement showing all payments collected by it and a statement of all money held
by it, covering the period following the date of the last accounting furnished
to the Board of Directors with respect to the Company or any of its
Subsidiaries; and

(c) deliver to the Board of Directors all property and documents of the
Company or any of its Subsidiaries then in the custody of the Advisor.


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SECTION 18. RELEASE OF MONEY OR OTHER PROPERTY UPON WRITTEN REQUEST. The
Advisor agrees that any money or other property of the Company or any of its
Subsidiaries held by the Advisor under this Agreement shall be held by the
Advisor as custodian for the Company or any such Subsidiary, and the Advisor's
records shall be appropriately marked clearly to reflect the ownership of such
money or other property by the Company or any such Subsidiary. Upon the receipt
by the Advisor of a written request signed by a duly authorized officer of the
Company requesting the Advisor to release to the Company or any of its
Subsidiaries any money or other property then held by the Advisor for the
account of the Company or any of its Subsidiaries under this Agreement, the
Advisor shall release such money or other property to the Company or any of its
Subsidiaries within a reasonable period of time, but in no event later than 60
days following such request. The Advisor shall not be liable to the Company,
any Subsidiary of the Company, the Independent Directors, or the Company's or
its Subsidiary's stockholders for any acts performed or omissions to act by the
Company or any of its Subsidiaries in connection with the money or other
property released to the Company or any of its Subsidiaries in accordance with
this Section 18. The Company and any of its Subsidiaries shall indemnify the
Advisor, its directors, officers, stockholders and employees against any and all
expenses, losses, damages, liabilities, demands, charges and claims of any
nature whatsoever, which arise in connection with the Advisor's release of such
money or other property to the Company or any of its Subsidiaries in accordance
with the terms of this Section 18. Indemnification pursuant to this provision
shall be in addition to any right of the Advisor to indemnification under
Section 11 of this Agreement.

SECTION 19. REPRESENTATIONS AND WARRANTIES.

(a) The Company hereby represents and warrants to the Advisor as follows:

(i) The Company is duly incorporated, validly existing and in good
standing under the laws of Maryland, has full corporate power and authority to
own its assets and to transact the business in which it is now engaged and is
duly qualified or registered as a foreign corporation and in good standing under
the laws of each jurisdiction where its ownership or lease of property or the
conduct of its business requires such qualification or registration, except
where the failure to be so qualified or registered would not in the aggregate
have a material adverse effect on the business, operations, assets or financial
condition of the Company and its Subsidiaries, taken as a whole. The Company
does not do business under any fictitious business name.

(ii) The Company has the corporate power and authority to execute,
deliver and perform this Agreement and all obligations required hereunder and
has taken all necessary corporate action to authorize this Agreement on the
terms and conditions hereof and the execution, delivery and performance of this
Agreement and all obligations required hereunder. No consent of any other
person including, without limitation, stockholders and creditors of the Company,
and no license, permit, approval or authorization of, exemption by, notice or
report to, or registration, filing or declaration with, any governmental or
regulatory authority or agency is required by the Company in connection with
this Agreement or the execution, delivery, performance, validity or
enforceability of this Agreement and all obligations required hereunder. This
Agreement has been, and each instrument or document required hereunder will be,
executed and delivered by a duly authorized officer of the Company, and this
Agreement constitutes, and



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each instrument or document required hereunder when executed and delivered
hereunder will constitute, the legally valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
such enforcement may be limited by bankruptcy, insolvency, moratorium or similar
laws now or hereafter in effect relating to the rights and remedies of creditors
generally, and general principles of equity.

(iii) The execution, delivery and performance of this Agreement
and the documents or instruments required hereunder, will not violate any
provision of any existing law or regulation binding on the Company, or any
order, judgment, award or decree of any court, arbitrator or governmental or
regulatory authority or agency binding on the Company, or the Governing
Instruments of, or any securities issued by, the Company or any of its
subsidiaries, or any mortgage, indenture, lease, contract or other agreement,
instrument or undertaking to which the Company or any of its Subsidiaries is a
party or by which the Company, any Subsidiary of the Company or any of their
assets may be bound, the violation of which would have a material adverse effect
on the business operations, assets or financial condition of the Company and its
Subsidiaries, taken as a whole, and will not result in, or require, the creation
or imposition of any lien on any of their property, assets or revenues pursuant
to the provisions of any such mortgage, indenture, lease, contract or other
agreement, instrument or undertaking.

(b) The Advisor hereby represents and warrants to the Company as follows:

(i) The Advisor is duly incorporated, validly existing and in good
standing under the laws of Maryland, has full corporate power and authority to
own its assets and to transact the business in which it is now engaged and is
duly qualified or registered to do business and is in good standing under the
laws of each jurisdiction where its ownership or lease of property or the
conduct of its business requires such qualification or registration, except
where the failure to be so qualified or registered would not in the aggregate
have a material adverse effect on the business, operations, assets or financial
condition of the Advisor and its Subsidiaries, taken as a whole. The Advisor
does not do business under any fictitious business name.

(ii) The Advisor has the corporate power and authority to execute,
deliver and perform this Agreement and all obligations required hereunder and
has taken all necessary partnership action to authorize this Agreement on the
terms and conditions hereof and the execution, delivery and performance of this
Agreement and all obligations required hereunder. No consent of any other
person including, without limitation, partners and creditors of the Advisor, and
no license, permit, approval or authorization of, exemption by, notice or report
to, or registration, filing or declaration with, any governmental or regulatory
authority or agency is required by the Advisor in connection with this Agreement
or the execution, delivery, performance, validity or enforceability of this
Agreement and all obligations required hereunder. This Agreement has been and
each instrument or document required hereunder will be executed and delivered by
a duly authorized agent of the Advisor, and this Agreement constitutes, and each
instrument or document required hereunder when executed and delivered hereunder
will constitute, the legally valid and binding obligation of the Advisor
enforceable against the Advisor in accordance with its terms.


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(iii) The execution, delivery and performance of this Agreement
and the documents or instruments required hereunder, will not violate any
provision of any existing law or regulation binding on the Advisor, or any
order, judgment, award or decree of any court, arbitrator, or governmental or
regulatory authority or agency binding on the Advisor, or the partnership
agreement of, or any securities issued by, the Advisor or any of its
Subsidiaries, or any mortgage, indenture, lease, contract or other agreement,
instrument or undertaking to which the Advisor or any of its Subsidiaries is a
party or by which the Advisor or any Subsidiary of the Advisor or any of its
assets may be bound, the violation of which would have a material adverse effect
on the business operations, assets or financial condition of the Advisor and its
Subsidiaries, taken as a whole, and will not result in, or require, the creation
or imposition of any lien on any of their property, assets or revenues pursuant
to the provisions of any such mortgage indenture, lease, contract or other
agreement, instrument or undertaking.

SECTION 20. NOTICES. Unless expressly provided otherwise herein, all
notices, request, demands and other communications required or permitted under
this Agreement shall be in writing and shall be deemed to have been duly given,
made and received when delivered against receipt or upon actual receipt of
registered or certified mail, postage prepaid, return receipt requested. The
parties may deliver to each other notice by electronically transmitted facsimile
copies provided that such facsimile notice is followed within 24 hours by any
type of notice otherwise provided for in this paragraph. Any notice shall be
duly addressed to the parties as follows:


(a) If to the Company:

1004 Farnam Street
Omaha, Nebraska 68102
Attention: _______________________
Telephone: ______________________

with a copy given in the manner prescribed above, to:

Rogers & Wells
200 Park Avenue
New York, New York 10166
Attention: Jay L. Bernstein, Esq.
Telephone: (212) 878-8223

(b) If to the Advisor:

1004 Farnam Street
Omaha, Nebraska 68102
Attention: _______________________
Telephone: ______________________

with a copy given in the manner prescribed above, to:


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Rogers & Wells
200 Park Avenue
New York, New York 10166
Attention: Jay L. Bernstein, Esq.
Telephone: (212) 878-8223

Either party may alter the address to which communications or copies are to
be sent by giving notice of such change of address in conformity with the
provisions of this Section 20 for the giving of notice.

SECTION 21. BINDING NATURE OF AGREEMENT: SUCCESSORS AND ASSIGNS. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, personal representatives, successors and assigns as
provided herein.

SECTION 22. ENTIRE AGREEMENT. This Agreement contains the entire
agreement and understanding among the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter hereof. The express
terms hereof control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms hereof. This Agreement may not be
modified or amended other than by an agreement in writing.

SECTION 23. CONTROLLING LAW. This Agreement and all questions relating
to its validity, interpretation, performance and enforcement shall be governed
by and construed, interpreted and enforced in accordance with the laws of the
State of Maryland, notwithstanding any Maryland or other conflict of law
provisions to the contrary.

SECTION 24. SCHEDULES AND EXHIBITS. All Schedules and Exhibits referred
to herein or attached hereto are hereby incorporated by reference into, and made
a part of, this Agreement.

SECTION 25. NO WAIVER. Neither the failure nor any delay on the part of
a party to exercise any right, remedy, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege preclude any other or further exercise of
the same or of any other right, remedy, power or privilege, nor shall any waiver
of any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence. No waiver shall be effective unless it is in writing and
is signed by the party asserted to have granted such waiver.

SECTION 26. TITLES NOT TO AFFECT INTERPRETATION. The titles of
paragraphs and subparagraphs contained in this Agreement are for convenience
only, and they neither form a part of this Agreement nor are they to be used in
the construction or interpretation hereof.

SECTION 27. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original
as against any party whose signature appears thereon, and all of which shall
together constitute one and the

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same instrument. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the signatures
of all of the parties reflected hereon as the signatories.

SECTION 28. PROVISIONS SEPARABLE. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others or them may be invalid or unenforceable in whole or in part.

SECTION 29. GENDER. Words used herein regardless of the number and
gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context requires.

SECTION 30. COMPUTATION OF INTEREST. Interest will be computed on the
basis of a 360-day year consisting of twelve months of thirty days each.


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


Company:

AMERICA FIRST MORTGAGE INVESTMENTS, INC.
a Maryland corporation


By: ___________________________________

Name: _____________________________
Title: _____________________________


Advisor:

AMERICA FIRST MORTGAGE ADVISORY CORPORATION
a Maryland corporation


By: ____________________________________

Name: _______________________________
Title: ______________________________



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