AMERICA FIRST APARTMENT INVESTORS, INC.

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is effective as of February 21,
2007, by and between AMERICA FIRST APARTMENT INVESTORS, INC., a Maryland
corporation with its principal place of business in Omaha, Nebraska
(the “Company”), and JAMES J. EGAN (“Employee”), a resident of the State of New
York.

WHEREAS, prior to December 30, 2005, the Company was an externally-advised real
estate investment trust and, as a result, its executive officers were employees
of The Burlington Capital Group, L.L.C. (f/k/a America First Companies L.L.C.)
(“Burlington”) which was the parent company of the Company’s external advisor;
and

WHEREAS, on December 30, 2005, the Company completed its transition from being
externally advised to being self advised through the merger of its external
advisor into the Company and, as a result, persons acting as the executive
officers of the Company became direct employees of the Company and the Company
assumed the employment agreements of these individuals, including the employment
agreement between Burlington and Employee dated October 1, 2005 (the “Original
Agreement”); and

WHEREAS, the Company continues to desire to employ Employee as its Executive
Vice President and Chief Investment Officer and Employee desires to be employed
by the Company in such capacity; and

WHEREAS, the Company and the Employee desire to amend and restate the Original
Agreement to reflect the transition of the Company to an self-advised real
estate investment trust and to incorporate various amendments adopted and
approved by the compensation committee of the Company’s Board of Directors (the
“Committee”) subsequent thereto;

NOW THEREFORE, the Company and Employee, each intending to be legally bound,
agree to the following terms and conditions:

Section 1. EMPLOYMENT.

(a) The Company hereby agrees to continue to employ Employee on a full time
basis as its Executive Vice President and Chief Investment Officer.

(b) Employee hereby represents and warrants to the Company that (i) the
execution, delivery and performance of this Agreement by Employee does not and
will not conflict with, breach, violate or cause a default under any contract,
agreement, instrument, order, judgment or decree to which Employee is a party or
by which he is bound, (ii) Employee is not a party to or bound by any employment
agreement, noncompete agreement or confidentiality agreement with any other
person or entity and (iii) upon the execution and delivery of this Agreement by
the Company, this Agreement shall be the valid and binding obligation of
Employee, enforceable in accordance with its terms.

Section 2. TERM. The term of this Agreement will be indefinite; provided,
however, that the Employee’s employment with the Company will terminate (i) upon
the death of Employee, (ii) upon the expiration of a continuous period of one
hundred eighty (180) days during which Employee is disabled (as defined in the
long-term disability plan of the Company) (hereinafter “Disabled”), (iii) upon
termination by Employee pursuant to Section 9(b) hereof, or (iv) termination by
the Company pursuant to Section 9(a) hereof.

Section 3. DUTIES; REPORTING.

(a) During the term hereof, Employee shall have the normal responsibilities,
duties and authorities of Executive Vice President and Chief Investment Officer
of the Company described in its bylaws and such other reasonable duties as may
be assigned to him by the President, Chief Executive Officer or the Board of
Directors of the Company (the “Board”) from time to time.

(b) Employee shall perform faithfully the executive duties assigned to him to
the best of his ability in a diligent, trustworthy, businesslike and efficient
manner and will devote his full business time and attention to the business and
affairs assigned to him hereunder; provided, however, that Employee may serve as
a director of or a consultant to other corporations which do not compete with
the Company or its subsidiaries or affiliates, nonprofit corporations, civic
organizations, professional groups and similar entities.

(c) During the term hereof, Employee shall report to the Chief Executive
Officer.

Section 4. BASE SALARY. As compensation for his services hereunder, the Company
shall pay to Employee an annual base salary (the “Base Salary”) during the term
hereof. The amount of the Employee’s Base Salary shall be determined by the
Committee. Base Salary will be paid in equal installments on a bi-weekly basis
pursuant to the Company’s regular payroll practices.

Section 5. BONUS. In addition to the Base Salary, Employee shall be eligible to
receive an annual bonus based on Employee’s performance. The performance goals
and amount of the Employee’s bonus, if any, shall be determined by the Committee
pursuant to its then current compensation plan. Any bonuses awarded to Employee
will be paid pursuant to the Company’s regular payroll practices.

Section 6. PARTICIPATION IN EMPLOYEE BENEFIT PLANS. Employee will be entitled to
participate in all Company salaried employee benefit plans and programs, subject
to the terms and conditions of each such employee benefit plan or program and to
the extent commensurate with the position.

Section 7. OTHER BENEFITS.

(a) VACATION. Employee shall initially be entitled to paid vacation in
accordance with the Company’s vacation policies.

(b) INSURANCE. The Company shall make available to Employee health and dental
insurance (including dependent coverage), and other benefits which the Company
may provide to all employees from time to time.

Section 8. BUSINESS EXPENSES. The Company shall reimburse Employee for all
reasonable expenses incurred by him in the course of performing his duties under
this Agreement which are consistent with the Company’s policies in effect from
time to time with respect to travel, entertainment and other business expenses,
subject to the Company’s requirements with respect to report and documentation
of such expenses.

Section 9. TERMINATION OF EMPLOYMENT.

(a) TERMINATION BY THE COMPANY. The Company may terminate this Agreement and
discharge Employee either with or without “Cause” at any time. As used herein,
the term “Cause” shall mean any material and uncured breach of this Agreement by
Employee, including a failure to perform his duties in a manner consistent with
the terms of this Agreement or the persistent failure or refusal to comply with
any lawful direction of the Board or the President or Chief Executive Officer of
the Company, or any action taken by Employee in connection with his duties
hereunder which is fraudulent or illegal, violates his duty of loyalty or
constitutes gross negligence. A termination of employment by the Company shall
be deemed to be effective immediately upon notification thereof to Employee.

(b) TERMINATION BY THE EMPLOYEE. Any termination of employment by Employee shall
be a “Voluntary Termination” unless it is the result of (i) Employee’s death,
(ii) Employee being Disabled or (iii) resignation due to a material and uncured
breach by the Company of this Agreement. A Voluntary Termination shall be deemed
to be effective immediately upon notification thereof to the Company.

(c) CERTAIN EFFECTS OF TERMINATION OF EMPLOYMENT.

(i) Subject to Section 9(d) hereof, upon the termination of Employee’s
employment hereunder pursuant to a Voluntary Termination or a termination for
Cause, Employee shall have no further rights or claims against the Company under
this Agreement except to receive a lump sum payment within thirty (30) days of
the date of termination of (A) the unpaid portion of Employee’s Base Salary and
any unpaid Bonus relating to the year prior to the year in which the date of
termination occurs, and (B) reimbursement of any reimbursable expenses for which
Employee shall not have theretofore been reimbursed.

(ii) Upon the termination of Employee’s employment hereunder by reason of
Employee’s death or Employee becoming Disabled, the Company shall pay to
Employee or Employee’s personal representative or custodian within thirty
(30) days of the date of the termination of Employee’s employment a lump sum
equal to (A) an amount equal to six months of Employee’s Base Salary at the date
of termination, (B) the unpaid portion of Employee’s Base Salary, any unpaid
Bonus relating to the year prior to the year in which the date of termination
occurs, and any current year Bonus based on year-to-date performance results
through the date of termination (as determined by the Committee but in no event
less than 20% of the threshold Bonus established for Employee for such current
year), and (C) reimbursement of any reimbursable expenses for which Employee
shall not have theretofore been reimbursed. In addition, Employee or Employee’s
personal representative or custodian will be entitled to any benefits provided
under any plans maintained by the Company in which Employee is a participant on
the date of termination in accordance with the terms of such benefit plan;

(iii) Subject to Section 9(d) hereof, upon the termination of Employee’s
employment hereunder other than for Cause, death, Disability or Voluntary
Termination, the Company shall pay to Employee in accordance with the Company’s
regular payroll practices (A) severance payment equal to twelve months of
Employee’s Base Salary at the date of termination, (B) the unpaid portion of
Employee’s Base Salary, any unpaid Bonus relating to the year prior to the year
in which the date of termination occurs, and any current year Bonus based on
year-to-date performance results through the date of termination (as determined
by the Committee but in no event less than 20% of the threshold Bonus
established for Employee for such current year), and (C) reimbursement of any
reimbursable expenses for which Employee shall not have theretofore been
reimbursed. In addition, Employee will be entitled to any benefits provided
under any plans maintained by the Company in which Employee is a participant on
the date of termination in accordance with the terms of such benefit plan.

(d) CHANGE IN CONTROL.

(i) Notwithstanding any other provision of this Section 9, in the event
Employee’s employment hereunder is terminated by the Company other than for
Cause, or there is a Voluntary Termination for “Good Reason” (defined below)
either in contemplation of, or within twelve months following, a “Change in
Control” (defined below), the Company shall pay Employee a lump sum cash payment
equal to:

(A) the total amount Employee would be entitled to receive upon a termination
described in Section 9(c)(iii) above; plus

(B) $375,000.

In addition, if any unvested awards of stock options or other equity-based
compensation made to Employee do not immediately vest by their terms upon a
Change in Control because they have been assumed by a successor entity or
converted into a right to receive securities of a successor entity, then such
unvested awards will become fully vested upon termination of employment under
this Section 9(d).

(ii) “Change in Control” shall mean any one of the following events: (A) a
dissolution or liquidation of the Company, (B) a sale of substantially all of
the assets of the Company, (C) a merger or combination involving the Company
after which the owners of Common Stock of the Company immediately prior to the
merger or combination own less than 50% of the outstanding shares of common
stock of the surviving corporation, or (D) the acquisition of more than 30% of
the outstanding shares of Common Stock of the Company, whether by tender offer
or otherwise, by any “person” (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934) other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company. The decision
of the Committee as to whether a Change in Control has occurred shall be
conclusive and binding.

(iii) “Good Reason” shall mean any one of the following events: (A) a material
reduction of Employee’s duties, titles or responsibilities or the assignment of
any duties, responsibilities or reporting requirements that are materially
inconsistent with his position as President and Chief Executive Officer, (B) a
reduction in Employee’s annual Base Salary or target Bonus; (C) a requirement
imposed by the Company that the principal place of business at which the
Employee performs his duties be changed to a location that is outside of the New
York City MSA, (D) a material and continuing breach by the Company of any
provision of this Agreement or (E) such other circumstances as the Committee
reasonably determines constitute Good Reason, provided Employee notifies the
Company of his determination that Good Reason exists within 30 days of such
event and the Company fails to cure or resolve the action or omission resulting
in Good Reason within 30 days after delivery of such notice.

(iv) A termination of employment shall be deemed to be made “in contemplation
of” a Change of Control if it occurs at anytime after execution by the Company
of any document setting forth the terms of a contemplated transaction which is
reasonably expected to result in a Change of Control, including but not limited
to a nonbinding letter of intent or term sheet.

(v) If any portion of a payment which would otherwise be made to the Employee
under this Section 9(d) is determined to be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended, then Employee
shall have no right to receive a payment under this Section 9(d) in excess of
the greatest amount which may be paid to the Employee without any amount thereof
being subject to the excise tax imposed under such Section 4999 (the “Payment
Limit”). The determination of the Payment Limit shall be made by a certified
public accounting firm designated by the Company (subject to any audit committee
approval required by law or stock exchange listing requirements)
(the “Accounting Firm”), which shall provide detailed supporting calculations of
the Payment Limit to both the Company and the Employee. The determination of the
Payment Limit made by the Accounting Firm shall be binding upon the Company and
the Employee; provided, however, that if a qualified tax advisor engaged by
Employee (“Employee’s Advisor”) determines that the Payment Limit established by
the Accounting Firm could, in its opinion, subject a portion of the payments
that would be made to Employee under this Section 9(d) to the excise tax imposed
by Section 4999, then Employee’s Advisor may determine a lower Payment Limit and
such Payment Limit as determined by Employee’s Advisor will be binding on the
Company and the Employee. The fees and expenses of the Accounting Firm and not
more than one Employee Advisor shall be borne solely by the Company.
Notwithstanding any limitation on such payment imposed in good faith under this
paragraph (v), if it is subsequently determined that a payment made to Employee
under this Section 9(d) is subject to an excise tax under Section 4999, then the
payment of such excise tax shall be to sole responsibility of the Employee.

(e) EFFECT OF BREACH OF CONFIDENTIALITY AND NONCOMPETITION PROVISIONS. In the
event Employee breaches or otherwise fails to comply with the provisions of
Sections 11 through 13 below, then, in addition to any other remedies provided
herein or at law or in equity, the Company shall have the right to require
return of any payment made to Employee pursuant to Section 9(c) or (d) above.
Return of such payment pursuant to the preceding sentence shall not relieve
Employee’s obligations pursuant to Sections 11 through 13 below.

Section 10. ASSIGNMENT AND SUCCESSION.

(a) The rights and obligations of the Company under this Agreement shall inure
to the benefit of and be binding upon its respective successors and assigns, and
Employee’s rights and obligations hereunder shall inure to the benefit of and be
binding upon his successors and permitted assigns, whether so expressed or not.

(b) Employee acknowledges that the services to be rendered by him hereunder are
unique and personal. Accordingly, Employee may not pledge or assign any of his
rights or delegate any of his duties or obligations under this Agreement without
the express prior written consent of the Company.

(c) The Company may assign its interest in or obligations under this Agreement
without the prior written consent of Employee.

Section 11. CONFIDENTIAL INFORMATION.

(a) Employee agrees at all times during the term of his relationship with the
Company and thereafter, to hold in strictest confidence, and not to use, except
for the benefit of the Company or its subsidiaries or affiliates, or to disclose
to any person, firm, corporation or other entity without written authorization
of the Board, any Confidential Information of the Company or its subsidiaries or
affiliates which Employee obtains or creates, by whatever means. Employee
further agrees not to make copies of such Confidential Information except as
authorized by the Company.

(b) For purposes of this Agreement, “Confidential Information” shall be
construed broadly and includes all Company (including its subsidiaries and
affiliates) proprietary information, technical data, trade secrets or know-how,
including, but not limited to, research, product plans, products, services,
suppliers, customer lists and customers, prices and costs, markets, software,
developments, inventions, notebooks, processes, technology, designs, drawings,
engineering, hardware configuration information, marketing, licenses, finances,
budgets or other business information disclosed to Employee by the Company or
its subsidiaries or affiliates either directly or indirectly in writing, orally
or by observation by Employee during the term hereof, whether or not during
working hours. Employee understands that Confidential Information includes, but
is not limited to, information pertaining to any aspects of the business of the
Company or its subsidiaries or affiliates which is either information not known
by actual or potential competitors of the Company or its subsidiaries or
affiliates or is proprietary information of the Company, its subsidiaries or
affiliates or their respective investors, customers or suppliers, of any nature
whatsoever. Confidential Information does not include any of the foregoing items
which have become publicly and widely known and made generally available through
no wrongful act of Employee’s or of others who were under confidentiality
obligations as to the item or items involved.

(c) Employee agrees that, at the time of termination of his relationship with
the Company, he will deliver to the Company (and will not keep in his
possession, recreate or deliver to anyone else) any and all devices, records,
data, notes, reports, proposals, lists, correspondence, specifications,
drawings, blueprints, sketches, notebooks, materials, flow charts, equipment,
other documents or property, or reproductions of any aforementioned items
developed by Employee pursuant to the relationship or otherwise belonging to the
Company, or its subsidiaries or affiliates. Employee further agrees that any
property situated on the Company’s premises and owned by the Company, or its
subsidiaries or affiliates, including disks and other storage media, filing
cabinets or other work areas, is subject to inspection by Company personnel at
any time with or without notice.

Section 12. FORMER EMPLOYER INFORMATION. Employee represents that as an employee
of the Company, he has not breached and will not breach any agreement to keep in
confidence proprietary information, knowledge or data acquired by Employee in
confidence or trust prior or subsequent to the commencement of Employee’s
relationship with the Company, and Employee will not disclose to the Company, or
induce the Company to use, any inventions, confidential or proprietary
information or material belonging to any previous employer or any other party.

Section 13. NONCOMPETITION; NONSOLICITATION.

(a) During the term hereof and for a period of one (1) year following the
termination of Employee’s employment relationship with the Company (whether or
not this Agreement is extended), Employee shall not:

(i) own, operate or manage any multi-family apartment property or other
commercial real estate, or hold any interest in such a property, which is or was
owned, operated or managed by the Company or its subsidiaries or affiliates
during the term of this Agreement, or serve as an employee or consultant to any
company or person owning, operating or managing any such property;

(ii) Induce or attempt to induce any employee, supplier or person or company
having a business relationship with the Company or its subsidiaries or
affiliates to terminate their employment or other such business relationship
with the Company or its subsidiaries or affiliates or to hire any person who had
been employed by the Company or its subsidiaries or affiliates during the
preceding six months; or

(iii) become a direct employee of, or serve as a consultant to, any company for
which the Company (or any subsidiary or affiliate of the Company) then provides
property management services or has provided property management services during
the preceeding twelve (12) months.

(b) Employee acknowledges that the foregoing restrictions are reasonable and
necessary in order to protect the Company’s legitimate interests.

Section 14. ARBITRATION AND EQUITABLE REMEDIES.

(a) Except as provide in Section 14(b) hereof, the parties agree that any
dispute or controversy arising out of, relating to, or concerning the
interpretation, construction, performance or breach of this Agreement, shall be
settled by arbitration to be held in Omaha, Nebraska, in accordance with the
Employment Dispute Resolution rules of the American Arbitration Association then
in effect. The arbitrator may grant injunctions or other relief in such dispute
or controversy and the decision of the arbitrator shall be final, conclusive and
binding on the parties to the arbitration. Judgment may be entered on the
arbitrator’s decision in any court having jurisdiction. The Company and Employee
shall each pay one-half of the costs and expenses of such arbitration, and each
shall separately pay the fees and expenses of their respective legal counsel.

THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EMPLOYEE’S RIGHT TO A JURY TRIAL
AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE
EMPLOYER/EMPLOYEE RELATIONSHIP.

(b) Notwithstanding paragraph (a) of this Section 14, the parties agree that, in
the event of the breach or threatened breach of Sections 11 through 13 of this
Agreement by Employee, monetary damages alone would not be an adequate remedy to
the Company and its affiliates for the injury that would result from such
breach, and that the Company and its affiliates shall be entitled to apply to
any court of competent jurisdiction for specific performance and/or injunctive
relief (without posting bond or other security) in order to enforce or prevent
any violation of such provisions of this Agreement. Employee further agrees that
any such injunctive relief obtained by the Company or any of its affiliates
shall be in addition to monetary damages.

Section 15. INDEMNIFICATION. The Company agrees to indemnify and hold harmless
Employee for any and all actions taken by Employee in carrying out his duties
under this Agreement to the extent provided in the Company’s Operating
Agreement, as it may be amended from time to time.

Section 16. ENTIRE AGREEMENT. This Agreement represents the entire agreement
between the parties relating to the subject matters covered hereby and shall
supersede any prior understandings, agreements or representations by or between
the parties, written or oral, which may have related to the subject matter
hereof in any way (including the Original Agreement).

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Section 17. NOTICES. Any notice or request required or permitted to be given
hereunder shall be in writing and will be deemed to have been given (i) when
delivered personally, sent by telecopy (with hard copy to follow) or overnight
express courier or (ii) five days following mailing by certified or registered
mail, postage prepaid and return receipt requested, to the addresses below
unless another address is specified by such party in writing:

     
To the Company:
1004 Farnam Street
Suite 100
Omaha, NE 68102
Attention: President
Telephone: (402) 557-6360
Telecopy: (402) 557-6399
To Employee:
  America First Apartment Investors, Inc.

At the Employee’s regular place of business

Section 18. HEADINGS. The article and section headings herein are for
convenience of reference only and shall not define or limit the provisions
hereof.

Section 19. APPLICABLE LAW. All other questions concerning the construction,
validity and interpretation of this Agreement shall be governed by the internal
laws of the State of New York.

Section 20. SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held prohibited by, invalid or
unenforceable in any respect under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.

Section 21. AMENDMENTS AND WAIVERS. Any provision of this Agreement may be
amended or waived only with the prior written consent of the Company and
Employee.

Section 22. NO STRICT CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against any party
hereto.

Section 23. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.

Section 24. SURVIVAL. Sections 11, 12, 13 and 15 shall survive and continue in
full force in accordance with their terms notwithstanding any termination of the
term hereof.

Section 25. CODE SECTION 409A SAVINGS CLAUSE. It is the intention of the Company
that amounts paid under this Agreement shall not constitute “deferred
compensation” subject to Section 409A of the Code, unless and to the extent that
the Company specifically determines otherwise. In the event the Company
determines that this Agreement or any section hereof is subject to Code
Section 409A, the Company may amend this Agreement in a manner that complies
with Code Section 409A as determined in the Company’s sole discretion.

IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by its
duly authorized officer and Employee has signed this Agreement.

AMERICA FIRST APARTMENT INVESTORS, INC.

By /s/ John H. Cassidy
John H. Cassidy, President and Chief Executive
Officer

EMPLOYEE

/s/ James J. Egan

    James J. Egan

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