Document:

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                                                                     Exhibit 4.5

REGISTERED                                                      PRINCIPAL AMOUNT
No.:                                                           $

CUSIP No.: _________

                        FBR Asset Investment Corporation
                     [Designation of Subordinated Security]

         FBR Asset Investment Corporation, a Virginia corporation (hereinafter
called the "Corporation," which term shall include any successor corporation
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to , or registered assigns, upon presentation, the principal sum
of DOLLARS on _____________, and to pay interest on the outstanding principal
amount thereon from _____________, or from the most recent Interest Payment Date
to which interest has been paid or duly provided for, semi-annually in arrears
on _______ and _________ in each year, commencing _______________, at the rate
of __% per annum, until the entire principal amount hereof is paid or made
available for payment. The interest so payable, and punctually paid or duly
provided for on any Interest Payment Date will, as provided in the Indenture, be
paid to the Person in whose name this Subordinated Security (or one or more
Predecessor Subordinated Securities) is registered at the close of business on
the Regular Record Date for such interest which shall be the ________ or
________ (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may either be paid to the Person in whose name this
Subordinated Security (or one or more Predecessor Subordinated Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Subordinated Securities of this series not more than 15 days
and not less than 10 days prior to such Special Record Date, or may be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Subordinated Securities may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
<PAGE>

in the Indenture. Payment of the principal of, Make-Whole Amount, if any, on,
and interest on this Subordinated Security will be made at the office or agency
of the Corporation maintained for that purpose in the City of Arlington, State
of Virginia, or elsewhere as provided in the Indenture, in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that at the option of
the Corporation payment of interest may be made by (i) check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register kept for the Subordinated Securities pursuant to Section 305
of the Indenture (the "Security Register") or (ii) transfer to an account of the
Person entitled thereto located inside the United States.

         This Subordinated Security is one of a duly authorized issue of
securities of the Corporation (herein called the "Subordinated Securities"),
issued and to be issued in one or more series under an Indenture, dated as of
_________, 200_ (herein called the "Indenture"), between the Corporation and
____________ (herein called the "Trustee," which term includes any successor
trustee under the Indenture with respect to the Subordinated Securities), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Corporation, the Trustee and the Holders of the
Subordinated Securities and of the terms upon which the Subordinated Securities
are, and are to be, authenticated and delivered. This Subordinated Security is
one of the series designated as the "[designation of Subordinated Securities],"
limited in aggregate principal amount to $__________.

         The Subordinated Securities may be redeemed at any time at the option
of the Corporation, in whole or in part, upon notice of not more than 60 nor
less than 30 days prior to the Redemption Date, at a redemption price equal to
the sum of (i) the principal amount of the Subordinated Securities being
redeemed plus accrued interest thereon to the Redemption Date and (ii) the
Make-Whole Amount, if any, with respect to such Subordinated Securities.

         The following definitions apply with respect to any redemption of the
Subordinated Securities of this series at the option of the Corporation:

         "Make-Whole Amount" means, in connection with any optional redemption
or
<PAGE>

accelerated payment of any Subordinated Security, the excess, if any, of (i)
the aggregate present value as of the date of such redemption or accelerated
payment of each dollar of principal being redeemed or paid and the amount of
interest (exclusive of any interest accrued to the date of redemption or
accelerated payment) that would have been payable in respect of such dollar if
such redemption or accelerated payment had not been made, determined by
discounting, on a semiannual basis, such principal and interest at the
Reinvestment Rate (determined on the third Business Day preceding the date such
notice of redemption is given or declaration of acceleration is made) from the
respective dates on which such principal and interest would have been payable if
such redemption or accelerated payment had not been made, over (ii) the
aggregate principal amount of the Subordinated Securities being redeemed or
paid.

         "Reinvestment Rate" means .25% (one-fourth of one percent) plus the
arithmetic mean of the yields under the respective headings "This Week" and
"Last Week" published in the Statistical Release under the caption "Treasury
Constant Maturities" for the maturity (rounded to the nearest month)
corresponding to the remaining life to maturity, as of the payment date of the
principal being redeemed or paid. If no maturity exactly corresponds to such
maturity, yields for the two published maturities most closely corresponding to
such maturity shall be calculated pursuant to the immediately preceding sentence
and the Reinvestment Rate shall be interpolated or extrapolated from such yields
on a straight-line basis, rounding in each of such relevant periods to the
nearest month. For the purposes of calculating the Reinvestment Rate, the most
recent Statistical Release published prior to the date of determination of the
Make- Whole Amount shall be used.

         "Statistical Release" means the statistical release designated "H.15
(519)" or any successor publication which is published weekly by the Federal
Reserve System and which establishes yields on actively traded United States
government
securities adjusted to constant maturities or, if such statistical release is
not published at the time of any determination under the Indenture, then such
other reasonably comparable index which shall be designated by the Corporation.

         The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Corporation on this Subordinated Security and (b)
certain restrictive covenants and the related defaults and Events of Default
applicable
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to the Corporation, in each case, upon compliance by the Corporation
with certain conditions set forth in the Indenture, which provisions apply to
this Subordinated Security.

         If an Event of Default with respect to the Subordinated Securities
shall occur and be continuing, the principal of, and the Make-Whole Amount, if
any, on, the Subordinated Securities may be declared due and payable in the
manner and with the effect provided in the Indenture.

         As provided in and subject to the provisions of the Indenture, the
Holder of this Subordinated Security shall not have the right to institute any
proceeding with respect to the Indenture or for the appointment of a receiver or
trustee or for any other remedy thereunder, unless such Holder shall have
previously given the Trustee written notice of a continuing Event of Default
with respect to the Subordinated Securities, the Holders of not less than 25% in
principal amount of the Subordinated Securities at the time Outstanding shall
have made written request to the Trustee to institute proceedings in respect of
such Event of Default as Trustee and offered the Trustee reasonable indemnity
and the Trustee shall not have received from the Holders of a majority in
principal amount of the Subordinated Securities at the time Outstanding a
direction inconsistent with such request, and shall have failed to institute any
such proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of
this Subordinated Security for the enforcement of any payment of principal
hereof or any interest on or after the respective due dates expressed herein.

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Corporation and the rights of the Holders of the Subordinated Securities under
the Indenture at any time by the Corporation and the Trustee with the consent of
the Holders of not less than a majority in principal amount of the Outstanding
Subordinated Securities. The Indenture also contains provisions permitting the
Holders of specified percentages in principal amount of the Subordinated
Securities at the time Outstanding, on behalf of the Holders of all Subordinated
Securities, to waive compliance by the Corporation with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Subordinated
Security shall be
<PAGE>

conclusive and binding upon such Holder and upon all future Holders of this
Subordinated Security and of any Subordinated Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Subordinated
Security.

         No reference herein to the Indenture and no provision of this
Subordinated Security or of the Indenture shall alter or impair the obligation
of the Corporation, which is absolute and unconditional, to pay the principal
of, Make-Whole Amount, if any, on, and interest on this Subordinated Security at
the times, place and rate, and in the coin or currency, herein prescribed.

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Subordinated Security is registrable in the
Security Register, upon surrender of this Subordinated Security for registration
of transfer at the office or agency of the Corporation in any Place of Payment
where the principal of, Make-Whole Amount, if any, on, and interest on this
Subordinated Security are payable, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Corporation and the Security
Registrar for the Subordinated Securities (the "Security Registrar") duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Subordinated Securities of this series, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.

         The Subordinated Securities of this series are issuable only in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Subordinated Securities of this series are
exchangeable for a like aggregate principal amount of Subordinated Securities of
this series of a different authorized denomination, as requested by the Holder
surrendering the same.

         No service charge shall be made for any such registration of transfer
or exchange, but the Corporation may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
<PAGE>

         Prior to due presentment of this Subordinated Security for registration
of transfer, the Corporation, the Trustee and any agent of the Corporation or
the Trustee may treat the Person in whose name this Subordinated Security is
registered as the owner hereof for all purposes, whether or not this
Subordinated Security be overdue, and neither the Corporation, the Trustee nor
any such agent shall be affected by notice to the contrary.

         The Holder of this Subordinated Security by the acceptance thereof
agrees that the indebtedness evidenced by this Subordinated Security is
subordinated in right of payment, to the extent and in the manner provided in
Article Sixteen of the Indenture, to the prior payment in full of all Senior
Debt and that the subordination is for the benefit of the holders of Senior
Debt. The Holder hereof authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effect such subordination as
provided in the Indenture and appoints the Trustee his attorney-in-fact for such
purpose. "Senior Debt" is defined in the Indenture as the principal of and
interest on, or substantially similar payments to be made by the Corporation in
respect of, the following, whether outstanding at the date of execution of this
Indenture or thereafter incurred, created or assumed: (a) indebtedness of the
Corporation for money borrowed or represented by purchase-money obligations, (b)
indebtedness of the Corporation evidenced by notes, debentures, or bonds, or
other securities issued under the provisions of an indenture, fiscal agency
agreement or other instrument, (c) obligations of the Corporation as lessee
under leases of property either made as part of any sale and lease-back
transaction to which the Corporation is a party or otherwise, (d) indebtedness
of partnerships and joint ventures which is included in the Corporation's
consolidated financial statements, (e) indebtedness, obligations and liabilities
of others in respect of which the Corporation is liable contingently or
otherwise to pay or advance money or property or as guarantor, endorser or
otherwise or which the Corporation has agreed to purchase or otherwise acquire,
and (f) any binding commitment of the Corporation to fund any real estate
investment or to fund any investment in any entity making such real estate
investment; but excluding, however, (1) any such indebtedness, obligation or
liability referred to in clauses (a) through (f) above as to which, in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is provided that such indebtedness, obligation or liability is
not superior in right of payment to the Subordinated Securities, or ranks pari
passu with the Subordinated Securities, (2) any such indebtedness, obligation or
liability
<PAGE>

which is subordinated to indebtedness of the Corporation to substantially the
same extent as or to a greater extent than the Subordinated Securities are
subordinated and (3) the Subordinated Securities. As used in the preceding
sentence the term "purchase-money obligations" shall mean indebtedness or
obligations evidenced by a note, debenture, bond or other instrument (whether or
not secured by any lien or other security interest but excluding indebtedness or
obligations for which recourse is limited to the property purchased) issued or
assumed as all or a part of the consideration for the acquisition of property,
whether by purchase, merger, consolidation or otherwise, but shall not include
any trade accounts payable. A distribution may consist of cash, securities or
other property.

         No recourse under or upon any obligation, covenant or agreement
contained in the Indenture or in this Subordinated Security, or because of any
indebtedness evidenced thereby, shall be had against any promoter, as such or,
against any past, present or future shareholder, officer or director, as such,
of the Corporation or of any successor, either directly or through the
Corporation or any successor, under any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or equitable
proceeding or otherwise, all such liability being expressly waived and released
by the acceptance of this Subordinated Security by the Holder thereof and as
part of the consideration for the issue of the Subordinated Securities.

         All terms used in this Subordinated Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.

         THE INDENTURE AND THE SUBORDINATED SECURITIES, INCLUDING THIS
SUBORDINATED SECURITY, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAW OF THE COMMONWEALTH OF VIRGINIA.

         Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Corporation has caused "CUSIP" numbers
to be printed on the Subordinated Securities as a convenience to the Holders of
the Subordinated Securities. No representation is made as to the correctness or
accuracy of such CUSIP numbers as printed on the Subordinated Securities, and
<PAGE>

reliance may be placed only on the other identification numbers printed hereon.

         Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee by manual signature, this Subordinated Security shall
not be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.

         IN WITNESS WHEREOF, the Corporation has caused this instrument to be
duly executed under its corporate seal this day of , .

                        FBR Asset Investment Corporation

                        By:_________________________________
                           Name:____________________________
                           Title:___________________________

Attest:

By:__________________________
   Name:_____________________
   Title:____________________

[SEAL]

TRUSTEE'S CERTIFICATE OF AUTHENTICATION:

         This is one of the Subordinated Securities of the series designated
"[designation of Subordinated Securities]" pursuant to the within-mentioned
Indenture.
<PAGE>

______________, as Trustee

By:________________________
   Authorized Signatory

--------------------------------------------------------------------------------

                                 ASSIGNMENT FORM

                   FOR VALUE RECEIVED, the undersigned hereby
                        sells, assigns and transfers unto

PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE

_____________________________________________________________

_____________________________________________________________
             (Please Print or Typewrite Name and Address including
                             Zip Code of Assignee)

_____________________________________________________________
the within Subordinated Security of FBR Asset Investment Corporation and hereby
does irrevocably constitute and appoint

_____________________________________________________________
Attorney to transfer said Subordinated Security on the books of the within-named
Corporation with full power of substitution in the premises.
<PAGE>

Dated: _________________________________________

________________________________________________

NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within Subordinated Security in every
particular, without alteration or enlargement or any change whatever.<PAGE>

                                                                    Exhibit 10.4

                    AGREEMENT TO EXTEND MANAGEMENT AGREEMENT

         This Agreement to Extend Management Agreement (the "Extension
Agreement") is made as of December 17, 2001, by and between FBR Asset Investment
Corporation (the "Company") and Friedman, Billings, Ramsey Investment
Management, Inc. (the "Manager").

         WHEREAS, the Company and the Manager are parties to that certain
Management Agreement, dated as of December 17, 1997, as extended and amended by
that certain Agreement to Extend and Amend Management Agreement, dated as of
December 17, 1999, as further extended and amended by that certain Agreement to
Extend and Amend Management Agreement, dated as of December 17, 2000 (the
"Management Agreement");

         WHEREAS, the Management Agreement provides in Section 12 thereof that
the parties may extend the term of the Management Agreement for up to 12 months
by executing a written extension; and

         WHEREAS, the parties have determined to extend the term of the
Management Agreement by 12 months, from December 17, 2001 to December 17, 2002,
in accordance with Section 12 of the Management Agreement.

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

         SECTION 1. Extension. The parties hereby agree to extend the term of
the Management Agreement by 12 months, from December 17, 2001 to December 17,
2002.

         SECTION 2. Other terms. Other than as expressly extended hereby, all
other terms, conditions and provisions of the Management Agreement shall remain
in effect during the 12 month extension provided for hereby, unless the
Management Agreement is amended in writing by the parties or is sooner
terminated in accordance with the provisions thereof.

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

FBR ASSET INVESTMENT                        FRIEDMAN, BILLINGS, RAMSEY
CORPORATION                                 INVESTMENT MANAGEMENT, INC.

By: /s/ RICHARD HENDRIX                     By: /s/ KURT R. HARRINGTON
   ---------------------------------           ---------------------------------
Name:   Richard Hendrix                     Name:  Kurt R. Harrington
Tittle: Chief Operating Officer             Title: Chief Financial Officer and
                                                   Treasurer

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