EMPLOYMENT AGREE. OF STEWART ZIMMERMAN

Exhibit 10.2


EMPLOYMENT AGREEMENT


This Agreement made as of the 23rd day of October, 1997, by and between
AMERICA FIRST COMPANIES LLC, a Delaware limited liability company with its
office at 399 Park Avenue, New York, New York 10022 (the "LLC"), and STEWART
ZIMMERMAN, residing at 3063 Wynsum Avenue, Merrick, New York 11566 (the
"Employee") shall become effective October 23, 1997 (the "Effective Date").

W I T N E S S E T H:

WHEREAS, the LLC desires to employ the Employee and the Employee desires to
accept such employment with the LLC and represents that he is not restricted
from entering into and performing this Agreement, and the LLC and the Employee
desire to set forth in writing the terms and conditions under which the LLC
shall employ the Employee;

NOW, THEREFORE, the parties hereby covenant and agree as follows:

1. EMPLOYMENT.

(a) Effective as of the Effective Date hereof, the LLC hereby employs the
Employee as President of the mortgage division of the LLC to perform such duties
as are customarily performed by chief executive officers of similarly situated
mortgage entities and such other duties as may be mutually agreed upon between
the Employee and the Board of Directors. Employee's primary office shall be the
New York Metropolitan area. It is anticipated by both the LLC and the Employee
that the LLC will form a Mortgage Real Estate Investment Trust ("the Mortgage
REIT") which will be managed by an independent manager (the "Manager") which
will be majority owned by the LLC. The employer and the LLC agree that if the
Mortgage REIT and the Manager are successfully formed and established then the
Employee shall be President and chief executive officer of the Manager, and
shall report directly to the Board of Directors of the Manager; shall be in
charge of all of the employees of the Manager; and shall be in charge of setting
and implementing investment policy and asset/liability management and reporting
to the Board of Directors concerning the foregoing; and all of the duties,
obligations and benefits of the LLC set forth in this Agreement shall be
assigned to and assumed by to the Manager. All references to the LLC shall
apply to Manager as the context permits. If the Mortgage REIT and the Manager
are not successfully formed and established, then the LLC may subject to the
terms of Section 22 hereof, terminate this Agreement and pay to Employee upon
such termination all outstanding amounts due to Employee under this Agreement.




2. SUBSTANTIALLY FULL TIME EMPLOYMENT.

(a) The Employee agrees to devote substantially all of his business time
and effort to the performance of his duties as such President of the mortgage
division of the LLC and in turn, the Manager.

(b) The Employee shall be permitted to (i) perform charitable activities,
(ii) deliver lectures and participate as a member of business and professional
panels and (iii) perform services as a member of the Board of Directors or Board
of Trustees or similar body of any for-profit or non-profit entity, provided
that such activities do not interfere with the ability of the Employee to
perform the services and discharge the responsibilities required of him under
this Agreement.

3. TERM.

Except in the case of earlier termination for Cause, as hereinafter
defined, employee's employment pursuant to this Agreement shall terminate on the
first to occur of (i) the death of the Employee, (ii) the expiration of a
continuous period of one hundred and eighty (180) days during which the Employee
shall be Disabled, as hereinafter defined, (iii) Voluntary Termination (as
hereinafter defined) or Resignation for Good Reason (as hereinafter defined),
(iv) the failure of the LLC to successfully establish the Mortgage REIT and the
Manager by December 31, 1997 (subject to provisions of Section 22 hereof) and
(v) June 30, 2000. As used herein, the term "Disabled" shall mean the inability
of the Employee to perform his duties hereunder by reason of medical, emotional,
or mental injury, illness, disease or defect as determined under the terms of
the long-term disability insurance policy maintained by the LLC under which the
Employee is covered as in effect at the time of such determination.

4. BASE COMPENSATION.

For the services rendered by the Employee as President of the mortgage
division of the LLC and in turn as President of the Manager, the LLC or the
Manager, as the case may be, agrees to pay the Employee a base salary of Two
Hundred Sixty Nine Thousand Two Hundred Dollars ($269,200) per annum, payable in
equal semi-monthly installments in accordance with the standard payroll
practices of the LLC. The Employee's base annual salary payable pursuant to
this Section 4 (including any increases therein approved by the Compensation
Committee and ratified by the Board pursuant to this Section) is hereinafter
referred to as "Employee's Base Compensation." The Board shall, not less
frequently than annually, review the Employee's Base Compensation and may
increase such compensation by such amounts as the Board deems proper.

5. BONUS.

For each calendar year during the term of this Agreement, except the year
ended December 31, 1997, the Employee shall be eligible to receive a bonus in
such amount as the Compensation Committee of the Board of the LLC, or, in turn
the Manager may determine in its discretion, based on the attainment of the
LLC's or the Manager's business goals for such

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calendar year as set forth in the LLC's or the Manager's business plan for such
calendar year. Such bonus, if any, shall be paid by the LLC or the Manager to
the Employee in a lump sum within sixty (60) days of the end of the fiscal year
to which it relates.

6. EQUITY INTEREST IN MANAGER.

Employee will be entitled to purchase 10% of the issued and outstanding
equity interest of the Manager as of the date of organization of the Manager.
The purchase price for such interest will be equal to the original
capitalization price invested by the LLC in creation of the Manager multiplied
by the applicable percentage equity interest in the Manager and shall payable in
the same manner as the original capitalization price (ie. cash, note, or other
form of payment). The LLC and Manager covenant and agree that Manager's shares
shall be treated PARI PASU with those held by the LLC in the case of any sale,
merger or other transfer of its interest in the Manager.

7. STOCK OPTION.

Employee shall be entitled to participate in any stock option plan adopted
by the Mortgage REIT during his term of employment. Employee and the LLC agree
that Employee's participation in said stock option plan shall be subject to such
regulations and limitations as may be established by the Mortgage REIT stock
option plan as adopted by the Mortgage REIT Board of Directors. Employee's
level of participation shall be reasonably determined by the Board of Directors
of the Manager after the allocation of stock options has been made to the
Manager by the Mortgage REIT. It is understood by Employee that nothing
contained herein guarantees or grants him an award of stock options from the
Mortgage REIT.

8. EFFECT ON BENEFIT PLANS.

At all times during the term of this Agreement, the Employee shall be
entitled to participate in all executive compensation and employee benefit,
insurance and welfare plans or programs generally applicable to senior
executives of (i) the LLC, during his employment by the LLC, which plans or
programs shall not change prior to the assumption of the obligation under this
Agreement by the Manager, or (ii) the Manager after his employment by the
Manager, provided that the Manager's plans or programs shall be at least equal
to those provided by the LLC at the time of the transfer of the obligation to
the Manager.

9. VACATION.

(a) During each year the Employee is employed under this Agreement, the
Employee shall be entitled to five (5) weeks vacation in accordance with the
standard vacation practices and policies of the LLC, as the case may be.


10. TERMINATION FOR CAUSE.


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The LLC or the Manager shall have the right at any time, by written notice
to the Employee, to terminate this Agreement and to discharge the Employee for
"Cause." As used herein, the term "Cause" shall mean that the Employee has
materially breached the terms of this Agreement by engaging in dishonest or
fraudulent actions in connection with the performance of his duties hereunder
which results in material economic injury to the business of the LLC or the
Manager. Notwithstanding the foregoing, the Employee shall not be deemed to
have been terminated for Cause without (i) reasonable prior written notice to
the Employee setting forth the reasons for the decision to terminate the
Employee for Cause, (ii) an opportunity for the Employee, together with his
counsel, to be heard by the Board of the LLC or, in turn, the Manager and
(iii) delivery to the Employee of a notice of termination approved by said Board
stating its good faith opinion that the Employee has engaged in actions or
conduct described in the preceding sentence, which notice specifies the
particulars of such action or conduct in reasonable detail; provided, however,
that the LLC or the Manager, as the case may be, may suspend the Employee with
pay until such time as his appearance before the Board has been exercised so
long as such appearance is within two (2) weeks of the date of suspension.

11. RESIGNATION FOR GOOD REASON. Employee may resign his employment for
Good Reason. "Good Reason" shall include (a) a material diminution in
Employee's title, duties or responsibilities; (b) relocation of Employee's place
of employment without his consent outside the New York City metropolitan area;
or (c) the failure of the LLC or the Manager to pay within five (5) business
days any payment due from the LLC or the Manager; (d) the failure of the LLC or
Manager, as the case may be, to pay within a reasonable period after the date
when amounts are required to be paid to Employee under any benefit programs or
plans; or (e) the failure by the LLC or the Manager to honor any of its material
obligations herein.

12. VOLUNTARY TERMINATION.

Any termination of the employment of the Employee hereunder otherwise than
as a result of (i) termination by the LLC or the Manager in violation of the
terms of this Agreement, (ii) the Employee's death, (iii) the Employee's
becoming Disabled for a continuous period of one hundred and eighty (180) days
or (iv) the Employee's termination for Cause or Resignation for Good Reason
shall be a Voluntary Termination. A Voluntary Termination shall be deemed to be
effective immediately upon such termination.

13. CERTAIN EFFECTS OF TERMINATION OF EMPLOYMENT.

(a) Upon the termination of the Employee's employment hereunder pursuant
to a Voluntary Termination or a termination for Cause, neither the Employee nor
his estate or beneficiaries shall have any further rights or claims against the
LLC or, in turn, the Manager under this Agreement except to receive:

(i) the unpaid portion of the Employee's Base Compensation
computed on a pro rata basis to the date of termination;

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(ii) reimbursement for any reimbursable expenses for which the
Employee shall not have theretofore been reimbursed; and

(iii) any benefits provided under any plans maintained by the LLC
or, in turn, the Manager in which the Employee is a
participant which are generally provided to other
participants who have terminated employment under similar
circumstances.

(b) In addition to the rights granted to Employee pursuant to Section 6
hereof, upon the termination of the Employee's employment hereunder by reason of
Employee's becoming Disabled for a continuous period of 180 days, the LLC or the
Manager shall pay to the Employee or the Employee's personal representative or
custodian within ten (10) days of the date of the termination of the Employee's
employment hereunder, a lump sum cash payment equal to the amount of the
Employee's Base Compensation for six months as in effect on the date of
termination.

(c) Upon the termination of Employee's employment hereunder other than for
Cause, death, disability or Voluntary Termination, Employee shall receive the
then unpaid portion of the Employee's Base Compensation through June 30, 2000,
in accordance with the standard payroll practices of the LLC or the Manager, as
the case may be.

(d)(i) Upon the termination of the Employee's employment hereunder
pursuant to a termination for Cause, LLC shall be entitled, but not obligated,
to purchase from Employee any interest in the Manager purchased by Employee
pursuant to Section 6 of this Agreement for an amount equal to the book value of
such interests as determined by the latest monthly financial statements of
Manager with such amount to be paid within 60 days after the date of
termination.

(ii) Upon the termination of the Employee's employment hereunder for any
reason other than for Cause, LLC shall be entitled, but not obligated, to
purchase from Employee any interest in the Manager purchased by Employee or his
personal representative pursuant to Section 6 of this Agreement within 60 days
after the date valuation has been determined for an amount equal to the
appraised fair market value of such interests, provided, however, that LLC must
complete any purchase of equity interests within 180 days of the date of
termination. In turn, upon the termination of the Employee's employment
hereunder for any reason other than for cause, within 60 days from the date of
termination, Employee may but shall not be obligated to, sell his interest in
the Manager to the LLC for an amount equal to the book value of the Manager as
determined by the latest monthly financial statements of Manager.


(iii) For the purposes of this Section 12, the appraised fair market
value for such interests in Manager shall be determined in the following manner.
Employee and LLC shall attempt to agree upon an appraiser. If the parties agree
upon an appraiser, the appraiser so selected shall appraise the fair market
value of the applicable interests in Manager within 30 days after selection. If
the parties fail to so agree upon the selection of one such appraiser within
10 days after Employee's notice that he is entitled to such increased value of
such interests, Employee and LLC shall each designate, within 5 days from the
end of such 10-day period, one

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appraiser to determine such fair market value. In the event either party fails
to so select its own appraiser, the other party may obtain court appointment of
an appraiser. The two appraisers so selected shall attempt to agree upon such
fair market value of the applicable interests as at the date of said appraisal.
In the event the two appraisers fail to agree upon the fair market value of the
applicable interests within 30 days, the two appraisers shall meet and select a
third appraiser within 5 days after the expiration of such 30-day period. In
the event the two appraisers fail to so select a third appraiser, either party
may obtain court appointment of such third appraiser. Within 5 days after the
third appraiser is selected, the three appraisers so selected shall meet and
attempt to agree upon such fair market value of the applicable interests as at
the date of said appraisal. In the event the three appraisers fail to agree
upon the fair market value of the applicable interests within 5 days, the third
appraiser shall independently appraise the fair market value of the applicable
interests, and the arithmetic average of the three appraisals will be the fair
market value of the applicable interests. The parties shall equally split the
cost of all appraisals. The appraisers shall not discount the value of the
Employee's interest in the Manager merely because of the Employee's interest in
the Manager is that of a non-controlling minority interest holder or for lack of
marketability.

14. RESIGNATION AS BOARD MEMBER.

In any instance where the Employee ceases to be employed by the LLC or the
Manager, and if the Employee is then a member of the Board, the Employee hereby
agrees that, unless otherwise requested by the Board, he shall simultaneously
submit his resignation as a member of the Board in writing on or before the date
he ceases to be an employee of the LLC. If the Employee fails or neglects to
submit such resignation in writing, this Section 14 may be deemed by the LLC or
the Manager to constitute the Employee's written resignation as a member of the
Board effective on the same date that the Employee ceases to be an employee of
the LLC.

15. GOVERNING LAW.

This Agreement shall be governed by, construed and enforced in accordance
to the internal laws of the State of New York without reference to the
principles of conflicts of law thereof.

16. NOTICES.

All notices provided for or permitted to be given pursuant to this
Agreement must be in writing. All notices shall be personally delivered or sent
by registered or certified mail to the LLC, the Manager or the Employee at the
address set forth above or to such other address as the LLC, the Manager or the
Employee may notify the other in accordance with the provisions of this Section
16 and shall be effective upon receipt.


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17. ENTIRE AGREEMENT.

This Agreement contains the sole and entire agreement of the parties with
respect to the subject matter hereof and supersedes all prior agreements and
understandings between the Employee and the LLC with respect to the subject
matter hereof, whether written or oral. This Agreement cannot be amended,
modified or changed orally. To be effective any amendment, modification or
change shall be in writing and signed on behalf of the LLC or the Manager and by
the Employee.

18. WAIVER, CONSENT TO BREACH.

In the event any term or condition contained in this Agreement should be
breached by any party and thereafter waived or consented to by the other party,
such waiver or consent shall be limited to the particular breach so waived or
consented to and shall not be deemed to constitute a waiver of or consent to any
other breach occurring prior or subsequent to the breach so waived or consented
to.

19. SEVERABILITY.

If any provision of this Agreement or the application thereof to any person
or circumstance shall be invalid or unenforceable to any extent, the remainder
of this Agreement and the application of such provisions to other persons or
circumstances shall not be affected thereby and the remaining provisions of this
Agreement shall be enforced to the fullest extent permitted by law.

20. BENEFIT.

This Agreement shall inure to the benefit of and be binding upon the LLC,
the Manager, the Employee and their successors, including, in the case of the
Employee, his executor, custodian and beneficiaries; provided, however, that (a)
the obligations of the Employee hereunder shall be personal obligations of the
Employee and may not be delegated or assigned, and (b) except for an assignment
by LLC to Manager, LLC may not assign this Agreement without Employee's prior
written consent.

21. NON-ALIENATION OF BENEFITS.

Except insofar as applicable law may otherwise require, no amount payable
to or in respect of the Employee at any time under this Agreement shall be
subject in any manner to alienation by anticipation, sale, transfer, assignment,
bankruptcy, pledge, attachment, charge or encumbrance of any kind, and any
attempt to so alienate, sell, transfer, assign, pledge, attach, charge or
otherwise encumber any such amount, whether presently or hereafter payable,
shall be void; provided, however, that nothing in this Section 21 shall preclude
the Employee from designating a beneficiary or beneficiaries to receive any
benefit hereunder on his death.

22. VOTE FAILURE.

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Notwithstanding the above, if the LLC shall fail to establish the Mortgage
REIT on or before December 31, 1997 or such later date as set forth below (the
"Decision Date") or if it is acknowledged by the LLC prior to the Decision Date
that it will be unable to establish the Mortgage REIT then the LLC shall offer
Employee another position within the LLC of equal stature and compensation to
the position that Employee would have held as President of the Manager if the
Mortgage REIT had been established, and if the LLC fails to do so then the
Employee shall be entitled to his Base Compensation for fifteen months from the
date that Employee is notified of his termination by the LLC as a result of the
failure to establish the Mortgage REIT (which amount shall be received by him as
severance pay regardless of whether he is otherwise employed and without any
obligation to mitigate damages) and the Employee may seek other full time
employment provided, however, that the Employee shall be entitled to receive
severance pay equal to an additional 3 months of Base Compensation if he is not
otherwise employed on a full-time basis at the end of such 15-month period. At
the option of the LLC the Decision Date may be extended by one month increments
which shall simultaneously extend the term of guaranteed payment provided by
this Section 22 by a similar one month period, thus providing the Employee with
guaranteed payments of Base Compensation for at least twelve months after the
Decision Date. The extensions may be for no more than six months extending the
Decision Date no later than June 30, 1998.

23. INDEMNIFICATION.

(a) The LLC, during Employee's employment with the LLC, and the Manager
after Employee's employment by the Manager, shall indemnify the Employee to the
fullest extent permitted by New York law in effect as of the date hereof against
all costs, expenses, liabilities and losses (including, without limitation,
attorneys' fees, judgments, fines, penalties, ERISA excise taxes and amounts
paid in settlement) reasonably incurred by the Employee in connection with a
Proceeding. For purposes of this Section 23, a "Proceeding" shall mean any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, in which the Employee is made, or threatened to be made, a party
to, or a witness in, such action, suit or proceeding by reason of the fact that
he is or was an officer, director or employee of the Manager, as the case may
be, or is or was serving as an officer, director, member, employee, trustee or
agent of any other entity at the request of the Manager. During his employment
by the LLC, Employee shall be covered by the LLC's directors and officers
insurance policy.

(b) The Manager shall use its best efforts to obtain directors and
officers liability insurance, which shall provide insurance coverage to the
Employee at a reasonable cost to the Manager or the Mortgage REIT as the case
may be.





24. SURVIVORSHIP.

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The respective rights and obligations of the parties hereunder shall
survive any termination of the Agreement to the extent necessary to the intended
preservation of such rights and obligations.

25. GUARANTEE.

IN THE EVENT THAT THIS AGREEMENT IS ASSIGNED TO AND ASSUMED BY THE MANAGER,
THE LLC SHALL REMAIN LIABLE FOR ALL OF THE OBLIGATIONS ASSIGNED AND ASSUMED BY
THE MANAGER PURSUANT TO SUCH ASSIGNMENT AND ASSUMPTION, AND THE LLC SHALL NOT BE
RELEASED FROM ANY OF ITS OBLIGATIONS HEREUNDER UNTIL THE DATE THE LLC NO LONGER
CONTROLS 50% OR MORE OF THE VOTING STOCK OF THE MANAGER, AT WHICH TIME THIS
GUARANTEE SHALL TERMINATE AND BE OF NO FURTHER FORCE AND EFFECT.

IN WITNESS WHEREOF, the LLC has caused this Agreement to be executed on its
behalf and the Employee has hereunto set his hand as of the day and year first
above written.


AMERICA FIRST COMPANIES LLC


By: /S/ MICHAEL B. YANNEY
---------------------------
Name: Michael B. Yanney
Title: President


By: /S/ STEWART ZIMMERMAN
---------------------------
Name: Stewart Zimmerman
Title:


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