<PAGE>
                                                                    Exhibit 10.6


                             PARTICIPATION AGREEMENT

     THIS PARTICIPATION AGREEMENT, dated May 13th, 2004 is made by and between
Vestin Fund I, LLC, Vestin Fund II, LLC and Vestin Fund III, LLC (collectively,
"Lead Lender"), and Royal Bank of America ("Participant").

                                   Background

     Vestin Mortgage, Inc., a Nevada corporation (the "Initial Lender") made a
loan to Lexi Development, LLC, a Colorado limited liability company and Lexi
Golf, LLC, a Colorado limited liability company (collectively, the "Borrower"),
in the principal amount of $16,300,000 (the "Loan") evidenced and secured by
those certain Loan Documents (as hereinafter defined).


     Initial Lender assigned its interest in the Loan Documents to Lead Lender
pursuant to that certain Assignment of Deed of Trust from Lexi Golf, LLC to
Vestin Fund I, LLC, a Nevada limited liability company, as to an undivided
3,000,000/16,300,000th interest, Vestin Fund III, LLC, a Nevada limited
liability company as to an undivided 2,197,906.02/16,300,000th interest and
Vestin Fund II, LLC, a Nevada limited liability company as to an undivided
11,102,093.98/16,300,000th interest, dated March 31, 2004 and acknowledged
May 5, 2004, to be recorded on even date herewith between Initial Lender and
Lead Lender (the "Golf Assignment") and that certain Assignment of Deed of Trust
from Lexi Development LLC to Vestin Fund I, LLC, a Nevada limited liability
company as to an undivided 3,000,000/16,300,000th interest and Vestin Fund III,
LLC, a Nevada limited liability company as to an undivided 2,197,906.02/
16,300,000th interest and Vest Fund II, LLC, a Nevada limited liability company
as to an undivided 11,102,093.98/16,300,000th interest, dated March 31, 2004 and
acknowledged May 5, 2004 to be recorded on even date herewith between Initial
Lender and Lead Lender (the ("Development Assignment").

     Participant desires to purchase and accept from Lead Lender, and Lead
Lender desires to sell and grant to Participant, a participation interest in the
Note and the other Loan Documents (as hereinafter defined), and in certain
additional rights conferred upon Lead Lender as security for Borrower's
obligations under the Loan Documents, and upon the terms and conditions set
forth herein.

                                   Agreement

     NOW, THEREFORE, in consideration of the mutual agreements contained herein,
and intending to be legally bound, the parties hereto agree as follows:


                                   ARTICLE I
                                  DEFINITIONS

     For purposes hereof, each of the following terms shall have the meaning
specified with respect thereto:

     "Additional Loan Documents" shall have the meaning set forth in Section
2.1(d).

<PAGE>

          "Agreement" or "Participation Agreement" shall mean this Participation
Agreement between Lead Lender and Participant, together with all exhibits
attached hereto.

          "Borrower" shall mean Lexi Development, LLC, a Colorado limited
liability company ("Lexi Development") and Lexi Golf, LLC, a Colorado limited
liability company ("Lexi Golf'), collectively.

          "Business Day" shall mean any day on which banks are not required or
authorized to close in the State of Colorado.

          "Collections" shall mean any payments received by Lead Lender in
connection with the Loan including, without limitation: (i) principal on account
of the Loan; (ii) interest on account of the loan; (iii) proceeds of or revenues
under insurance policies; (iv) amounts payable by reason of total or partial
condemnation or taking by public agency or governmental authority; (v) amounts
paid by Borrower to reimburse a Lender for expenses incurred; and (vi) the Lead
Lender Fees.

          "Guarantor" shall mean Greg C. Mosher.

          "Improvements" shall mean the Golf Course Property and Personal
Property as described in that certain Deed of Trust, Assignment of Rents and
Leases, Security Agreement and Fixture Filing (Acquisition Loan) [Lexi Golf,
LLC] (the "Golf Properties") and the Development Properties and Personal
Property as described in that certain Deed of Trust, Assignment of Rents and
Leases, Security Agreement and Fixture Filing (Acquisition Loan) [Lexi
Development, LLC] (the "Development Properties").

          "Initial Lender" shall mean Vestin Mortgage, Inc., a Nevada
corporation.

          "Lead Lender" shall mean Vestin Fund I, LLC, Vestin Fund II, LLC and
Vestin Fund, III, LLC collectively.

          "Lead Lender Fees" means any origination fees, extensions fees, late
charges, penalties, liquidated damages, and other payments made by Borrower
pursuant to the Loan Documents.

          "Lender" shall mean either Lead Lender or Participant; and "Lenders"
shall mean the Lead Lender and the Participant, collectively.

          "Loan" shall mean the $16,300,000.00 loan from Initial Lender to
Borrower and assigned from Initial Lender to Lead Lender, made pursuant to the
terms of the Loan Documents.

          "Loan Documents" shall mean the documents relating to and evidencing
or securing the Loan, consisting of, inter alia, (i) a Loan Agreement dated
March 31, 2004 by and among Borrower and Initial Lender; (ii) a Promissory Note
Secured by Deed of Trust dated Much 31, 2004 in the stated principal amount of
the Loan executed by Borrower and made payable to the order of Initial Lender
("Note"); (iii) a Deed of Trust, Assignment of Rents and Leases, Security
Agreement and Fixture Filing (Acquisition Loan) dated March 31, 2004


                                       2

<PAGE>
executed by Lexi Golf in favor of Initial Lender and covering the Golf
Properties as security for the payment of the Note (the "Golf Mortgage"); (iv) a
Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture
Filing (Acquisition Loan) dated March 31, 2004 executed by Lexi Development in
favor of Initial Lender and covering the Development Properties as security for
the payment of the Note (the "Development Mortgage" and together with the Golf
Mortgage, the "Mortgage"); (v) a Collateral Assignment of Golf Course Lease
dated March 31, 2004 by Lexi Golf to Initial Lender; (vi) a Collateral
Assignment of Declarant's Rights dated March 31, 2004 by Lexi Development to
Initial Lender; (vii) a Collateral Assignment of Fidelity Purchase and Sale
Agreement dated March 31, 2004 by Borrower and The Renaissance Group LLC, a
Colorado limited liability company d/b/a Castle Hawk Development and Designs
("Borrower Parent") to Initial Lender; (viii) a Collateral Assignment of
Contracts, Licenses, Permits and Approvals dated March 31, 2004 by Borrower to
Initial Lender; (ix) a Collateral Assignment of Heritage Purchase-and-Sale
Agreement dated March 31, 2004 by Borrower Parent and Lexi Golf to Initial
Lender; (x) a Collateral Assignment of Country Club Rights dated March 31, 2004
by Lexi Golf to Initial Lender; (xi) a Collateral Assignment of Water and Sewer
Taps dated March 31, 2004 by Lexi Development to Initial Lender; (xii) UCC-1
Financing Statements in favor of Initial Lender; (xiii) a Payment Guaranty dated
March 31, 2004 by Guarantor in favor of Initial Lender, (xiv) the Golf
Assignment; (xv) the Development Assignment; and (xvi) a Promissory Note
Secured by Deed of Trust Endorsement dated March 31, 2004 from Initial Lender to
Lead Lender.

     "Non-Performing" as to the Loan, shall mean a condition in which either (a)
the Loan has been accelerated (whether by election of the Lead Lender,
automatically or otherwise) or has matured, or (b) the Participant has not
received its full pro rata share of the amounts due in connection with any
two (2) payments then owing by Borrower under the Loan or any Loan Document.

     "Participant" shall mean Royal Bank America, its successors and permitted
assigns.

     "Participant's Share" means the Participant's Participation Share.

     "Participation Certificate" shall mean a certificate in the form of Exhibit
"A" hereto that evidences Participant's interest in the Loan.

     "Participation Share" shalt have the meaning set forth in Section 2.1
hereof.

     "Performing" as to the Loan or any other loan held by the Lead Lender, as
applicable, shall mean a condition in which no (a) event of default exists under
any Loan Document, and (b) event or circumstance or absence of any event or
circumstance exists, which with the passage of time, the giving of notice or any
other condition, would constitute an event of default under any Loan Document.

     "Property" shall mean, collectively, the Real Property and Improvements.

     "Purchase Price" shall have the meaning set forth in Section 6.1.


                                        3
<PAGE>
          "Real Property" shall mean, collectively, those certain parcels of
real property located in Douglas County, Colorado as more particularly described
in the Mortgage.

          "Substitution Loan" shall have the meaning set forth in Section 2.3
hereof.

          "Substitution Right" shall have the meaning set forth in Section 2.3
hereof.

                                   ARTICLE II
                                 PARTICIPATION


      2.1.   Purchase of Participation.

                 (a)    The respective participation shares of the Lenders
under this Participation Agreement shall be as follows:

<Table>
<Caption>
Lender                   Participation Share      pro rata share
------                   -------------------      --------------
<S>                          <C>                     <C>
Lead Lender                  $ 1,300,000               7.98%
Participant                  $15,000,000              92.02%
</Table>

The dollar amount of each Lender's participation assumes full disbursement of
the principal amount of the Loan, shall hereinafter be referred to as its
"Participation Share," and shall be adjusted in amount from time to time as the
Lenders make advances or accept payments on the Loan. The proportion which each
Lender's Participation Share bears to the total principal amount of the Loan
shall be referred to as its "pro rata" share.

                 (b)  In consideration for the payment by Participant of its
Participation Share to Lead Lender, Lead Lender hereby grants and assigns to
Participant, and Participant hereby purchases and accepts from Lead Lender, (i)
the undivided pro rata percent interest set forth in subsection (a) above next
to Participant's name in the Loan, (ii) a right to all interest collected on
the Loan not in excess of the amount of interest accrued and outstanding on the
Participant's Share from time to time at a rate of ten percent (10%) per annum,
and (iii) a pro rata share of any other rights and obligations of Lead Lender
under or in connection with the Note and the other Loan Documents subject to
the limitations and order of distributions set forth in Section 3.1.

                 (c)  On the date hereof, Participant is delivering or has
delivered to Lead Lender in immediately available funds Participant's pro rata
share of the proceeds of the Loan being advanced by Lead Lender on the date
hereof. Lead Lender shall execute and deliver to Participant a Participation
Certificate evidencing Participant's purchase of such pro rata share. If the
Loan provides for future advances, five (5) calendar days prior to each
subsequent advance of the proceeds of the Loan, Lead Lender will provide
Participant with a copy of the Borrower's application for such advance together
with an acknowledgment that the work and/or materials in place have been
inspected by Lead Lender's inspector as required by the Loan Documents. The
inspection report that evidences the work or materials in place covered by such
advance will be provided to Participant within five (5) Business Days following
the date of such advance. No later than 12:00 p.m. on the date such advance is
to be made, Participant shall deliver to Lead



                                       4
<PAGE>
Lender in immediately available funds Participant's pro rata share of such
advance. Lead Lender shall execute and deliver to Participant a Participation
Certificate evidencing Participant's purchase of its pro rata share of each
additional advance.

          (d)  Lead Lender hereby agrees to execute and deliver any and all
documents required by law or requested by Participant, on even date herewith or
at any time that this Agreement is in effect if requested by Participant after
the execution date of this Agreement, to further evidence this Agreement and
Participant's rights hereunder, including but not limited to an Assignment of
Deed of Trust reflecting Participant's pro rata share and an endorsement to the
Note Secured by Deed of Trust (the "Additional Loan Documents").

     Section 2.2.  Third Party Beneficiaries. Lead Lender and Participant agree
that the provisions of this Agreement shall inure to the benefit of the parties
hereto only and not to any third parties except as otherwise expressly provided
herein.

     Section 2.3.  Performance of Loan. If the Loan becomes Non-Performing:

          (a)  Participant shall have the right (the "Substitution Right"), in
its sole discretion, to require the substitution in full of its interest in the
Loan with a participation interest in any Performing loan or loans in the loan
portfolio of the Lead Lender (individually or collectively, the "Substitution
Loan") in a participation amount equal to the amount of the Participant's Share
outstanding. In connection with the Substitution Right, Lead Lender shall
provide Participant access, within two (2) business days of Participant's
request, to Lead Lender's loan portfolio and any documents requested by
Participant in connection with its review of loans.

          (b)  To the extent that (i) Participant does not elect to exercise its
Substitution Right pursuant to subsection (a) above, and (ii) Lead Lender's pro
rata share of the Loan is less than fifty percent (50%), Lead Lender shall,
immediately upon request of Participant, purchase (in accordance with the
formula for Purchase Price set forth in Section 6.1) a portion of Participant's
Share outstanding under the Loan such that after such purchase Lead Lender holds
at least a fifty percent (50%) pro rata share of the total remaining principal
due under the loan.

          (c)  If Participant, in its sole discretion, chooses to exercise its
Substitution Right pursuant to subsection (a) above, Lead Lender shall enter
into a new participation agreement with Participant substantially in the form of
this Agreement and take all steps necessary thereunder to effectuate the
Participant's participation in the Substitution Loan. Upon such effective
substitution the rights and responsibilities of the parties hereunder shall
terminate as to the Loan.

          (d)  Lead Lender shall at all times, until such time that Participant
no longer retains any interest in the Loan, continue to exercise its rights and
remedies under the Loan Documents regarding the Loan subject to Lead Lender's
rights, duties and limitations contained in this Agreement and the Loan
Documents.


                                       5
<PAGE>
                                  ARTICLE III
                    DISTRIBUTION OF PAYMENTS; REIMBURSEMENT

     Section 3.1.  Distribution of Payments. All Collections shall be
distributed by Lead Lender in the order of priority set forth below.

          (a)  Prior to the date on which the Loan becomes Non-Performing, the
Lead Lender shall distribute each Collection, other than any Lead Lender Fee
(each of which shall be distributed directly to the Lead Lender), in the
following order of priority, to the extent available:

               (i) first, to each Lender, any costs or expenses of such Lender
entitled to reimbursement (provided that if such Collection is not sufficient to
reimburse all such expenses, then to each Lender in proportion to such expenses
outstanding);

               (ii) second, to the Participant, an amount equal to interest
accrued (and not previously paid to the Participant) on the Participant's Share
at a rate to ten percent (10%) per annum;

               (iii) third, to the Lead Lender, an amount equal to interest
accrued (and not previously paid) on the Loan, to the extent in excess of the
amount paid to Participant pursuant to (ii) above; and

               (iv) fourth, to each Lender, its pro rata share of any remaining
amounts for application against their Participation Shares.

          (b)  Notwithstanding anything set forth above, if on any date the Loan
becomes Non-Performing, Lead Lender shall, immediately upon receipt, transfer to
Participant all Collections thereafter made in connection with the Loan for
application to payment in full in cash of all of its Participation Share,
interest thereon, and all other amounts due to Participant hereunder, from such
date and until the earlier of the date that:

               (i) the Participant has received payment in full in cash of (A)
all its Participation Share, (B) interest thereon, accrued at the rate of ten
percent (10%) per annum, (C) all reimbursable expenses of the Participant, and
(D) any other amounts due Participant hereunder, or

               (ii) such Non-Performing Loan has been replaced, in accordance
with Section 2.3(a) hereof, by a Performing Substitution Loan.

Following such payment in full or replacement this Agreement shall terminate,
together with the Participant's interest in any rights and obligations under the



                                       6
<PAGE>
Loan and the Loan Documents (other than any rights to indemnification which
specifically survive).

     Section 3.2. Interest in Loan Documents.

     (a) Subject to Section 2.1(b), Participant shall, without the necessity of
any written instrument of assignment or other document, become vested with an
undivided equitable ownership interest (equal to its pro rata share) in (i) the
Note and other Loan Documents, and (ii) the other rights and claims of Lead
Lender with respect to the Loan. The respective interests of Lead Lender and
Participant in the Loan Documents and the other rights and claims of Lead Lender
under the Loan Documents with respect to the Loan shall be of equal priority
with one another, subject to the provisions of Sections 2.1(b) and 3.1. If Lead
Lender intends to acquire an ownership interest in any of the property given as
security for the Note, including the Property, due to the foreclosure or other
realization of any security interest in or lien granted by any of the Loan
Documents, Lead Lender shall, prior to such acquisition, enter into an agreement
with Participant stating, inter alia, that Lead Lender holds title solely as
nominee of Participant and Lead Lender or, at Participant's sole option, form an
entity owned by the Lenders (the "Ownership Entity") which shall acquire title.
Participant shall have an undivided interest in such ownership interest equal to
its pro rata share, whether title is held by the Ownership Entity or Lead Lender
as nominee.

     (b) All documents executed and delivered in connection with the Loan shall
be held by Lead Lender for the benefit of Lead Lender and Participant. Lead
Lender is authorized to retain the Note and the other Loan Documents and
Additional Loan Documents in Lead Lender's own name (provided, however, that the
Participant's interest in the Loan Documents shall be duly noted in Lead
Lender's loan files and Lead Lender shall have complied with, and shall continue
to comply with the requirements outlined in Section 2.1 (d)) and to deal with
parties other than Participant with respect to the servicing and administration
of the Loan as though an absolute owner of the Note and the other Loan
Documents. Notwithstanding the foregoing, Participant, or any authorized agents
or representatives of Participant, shall have the right, at Participant's
expense and at any reasonable time during normal business hours, to request and
have access to and examine any and all books, records and documents relating to
the Loan or relating to any matters covered by this Agreement. In addition, Lead
Lender shall deliver promptly to Participant copies of written information which
it receives from Borrower in satisfaction of the reporting requirements of
Borrower under the loan Documents. Any person, firm or corporation may deal with
Lead Lender concerning the Loan in the same manner as if Participant's Share
were not outstanding and Lead Lender were the sole owner of the Loan. Lead
Lender may perform and of its obligations hereunder by or through its agents,
employees or attorneys.

     Section 3.3. Sharing of Payments Etc. If either Lender shall receive any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off or otherwise) on account of any obligation of Borrower in connection
with the Loan, such Lender shall pay over to the other Lender any such portion
of such payment necessary to effectuate the distribution rights provided in
Section 3.1.

     Section 3.4. Excess Interest. Notwithstanding any provisions contained in
the Loan Documents, neither Lead Lender nor Participant shall ever be entitled
to receive, collect or


                                       7
<PAGE>

apply, as interest on the Loan, any amount in excess of the maximum rate of
interest permitted to be charged by applicable law, and, in the event either
Lender ever receives, collects, or applies as interest any such excess, such
amount which would be excess interest shall be applied to the reduction of the
unpaid principal balance of the Loan and, if the Loan is paid in full, any
remaining excess shall forthwith be paid to Borrower.


                                   ARTICLE IV
                                  LEAD LENDER

     Section 4.1  Collections by Lead Lender.

          (a)  Lead Lender shall have the right to collect from Borrower all
installments of principal and interest due and owing on the Loan, together with
fees, premiums and any and all other amounts due on or in connection with the
Loan, as more fully set forth in the Note and other Loan Documents.

          (b)  Lead Lender agrees that all amounts received by it from or on
behalf of Borrower in connection with the payment of interest, principal or
other amounts due under the Note and other Loan Documents shall be held by Lead
Lender on behalf of itself and Participant for disbursement in accordance with
this Participation Agreement.

     Section 4.2  Timing of Payments.

          (a)  Whenever Lead Lender receives, from or on behalf of Borrower or
anyone else, a payment of principal, interest or any other amount in connection
with the Loan with respect to any of which Participant is entitled to receive a
share, Lead Lender shall promptly pay to Participant via wire transfer of
federal funds within such time period after Lead Lender's receipt of the same as
Lead Lender customarily funds its participation relationships, but in no event
later than three (3) Business Days following receipt by Lead Lender of any such
payment, in lawful money of the United States of America, the amount due
Participant as determined pursuant to this Participation Agreement. Lead Lender
shall not be required to remit to Participant any amount not actually collected
by Lead Lender, whether or not the Loan is then in default.

          (b)  If all or part of any such payment to Lead Lender is rescinded or
must otherwise be returned for any reason and if Lead Lender has paid to
Participant its pro rata share thereof, Participant shall, within three (3)
Business Days after receiving written notice from Lead Lender, pay to Lead
Lender an amount equal to that portion of the amount which had previously been
paid to such Participant and which now was rescinded or which now must be
returned by Lead Lender.

     Section 4.3.  Powers Granted to Lead Lender. Participant hereby appoints
Lead Lender as an independent contractor (and not as an agent, employee or
fiduciary, except as otherwise specifically stated herein) to act on behalf of
Participant in the normal course of making, servicing and administering the
Loan, subject to the limitations contained in this Participation Agreement, if
any: (a) to negotiate, control, manage and service the Loan; (b) to enforce the
Note and the other Loan Documents; (c) to give consents, approvals or waivers in
connection with the Note and the other Loan Documents; (d) to agree to any
amendments or


                                       8
<PAGE>



modifications of the Note and the other Loan Documents; (e) to acquire
additional security for the Loan; (f) to take or refrain from taking any action
and make any determination provided for herein or in the Note and the other Loan
Documents; and (g) to exercise all such powers incidental to the foregoing.

          Section 4.4. Limitation on Lead Lender's Actions. Lead Lender shall
not, without the prior written consent of Participant:

                    (a) consent to or accept any cancellation or termination of
the Note or any of the other Loan Documents or agree to any transfer or
termination of any instrument now or hereafter assigned to it as security for
the Loan except in accordance with the terms of the Loan Documents;

                    (b) extend the maturity date of the Loan or the date of any
interest payment thereunder, except as may be provided in the Note;

                    (c) reduce the interest rate payable under the Note or
otherwise reduce the amount of any payment of principal or interest due
thereunder except as specifically provided in the Note;

                    (d) release, either partially or fully, any collateral given
as security for the Loan, or any party liable on a guaranty or any surety
including any obligor under any performance bond, or materially amend any
guaranty, except as specifically provided in the Loan Documents;

                    (e) refrain from enforcing the Note and the other Loan
Documents once an event of default has occurred thereunder and has continued
beyond the expiration of applicable notice and/or grace periods set forth
therein; or

                    (f) increase the amount of the Loan or Participant's
obligations pursuant to the Note or any other Loan Document.

          Section 4.5. Breach by Lender. In the event that Lead Lender:

                    (a) shall breach the terms of this Agreement and shall fail
to cure such default within sixty (60) days after written notice from
Participant to Lead Lender;

                    (b) shall make an assignment for the benefit of creditors;

                    (c) shall admit in writing its inability to pay its debts as
they become due;

                    (d) shall file a voluntary petition for an arrangement or
reorganization pursuant to the Federal Bankruptcy Code or any similar law now or
hereafter existing ("Bankruptcy Proceeding");

                    (e) shall become "insolvent" as defined in the Federal
Bankruptcy Code;


                                       9
<PAGE>
     (f) shall file an answer admitting insolvency or inability to pay its debts
as they become due, or shall fail to obtain a vacation or stay of any
involuntary Bankruptcy Proceeding within one hundred twenty (120) days after the
institution of the same;

     (g) shall be adjudicated a bankrupt or declared insolvent in any Bankruptcy
Proceeding;

     (h) shall have a custodian, trustee, or receiver appointed for, or have any
court take jurisdiction over, its property or any part thereof, in any voluntary
proceeding for the purpose of reorganization, arrangement, dissolution, or
liquidation, and such custodian, trustee or receiver shall not be discharged or
such jurisdiction not be relinquished, vacated, or stayed within one hundred
twenty (120) days; or

     (i) shall be dissolved, wound up, or fail to maintain its existence other
than pursuant to a plan of consolidation or merger into, with, or as part of,
Lead Lender's affiliates, or any entity currently owning Lead Lender or an
affiliate thereof, pursuant to the acquisition by another of the majority of the
assets of Lead Lender or Lead Lender's acquisition of a majority of the assets
of another; or

     (j) any material representation or warranty by Lead Lender hereunder shall
be false or misstated;

     Then, in such event, upon the written demand of Participant, Lead Lender
shall turn over to, and shall assign, endorse, and transfer the Loan to the
Participant, and if Lead Lender retains a Participation Interest in the Loan,
shall become solely a participant with the rights of a Participant and with no
right or obligation to administer the Loan.

     Section 4.6. Retention of Counsel. In the event of actual or threatened
litigation affecting the Loan or the security for the Loan with respect to which
litigation Lead Lender is of the opinion that the services of an attorney should
be retained for the mutual protection of the interests of Lead Lender and
Participant, Lead Lender may employ counsel to represent Lead Lender and the
interests of Participant with Participant's prior consent, unless employment of
the same is an emergency, in which event Lead Lender will attempt to obtain
Participant's prior consent but will be entitled to employ such counsel whether
or not Participant has given Lead Lender its consent. Lead Lender shall seek to
cause Borrower to pay the fees and expenses of such counsel in accordance with
the terms and conditions of the Loan Documents, but if Borrower fails to pay
such fees and expenses, Participant and Lead Lender shall pay their pro rata
share thereof. If Lead Lender later receives reimbursement therefor from
Borrower, Lead Lender shall return to Participant its pro rata share of the
amount so repaid, without interest, unless such amount is received by Lead
Lender with interest, in which case Participant would also receive its pro rata
share of the amount of interest. Participant shall not have the right in
connection with the same litigation to retain other counsel, except at the sole
cost and expense of Participant. In the event of litigation by and between Lead
Lender and Participant arising out of this Participation Agreement, Lead Lender
and Participant shall each bear its own costs in retaining counsel for the same.


                                        10
<PAGE>


          Section 4.7. Default. Upon the occurrences of a default under any of
the Loan Documents, the Lender which first acquires knowledge thereof shall,
within five (5) Business Days of acquiring such knowledge, notify the other of
the existence and nature thereof, but failure to give any such notice shall not
result in any liability nor affect the duties and obligations of either Lender.

          Section 4.8. Reliance on Lead Lender. Neither Lead Lender nor any of
its directors, officers, shareholders, members, managers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with this Participation Agreement, the Note or the other Loan
Documents; provided, however, that Lead Lender shall be liable to Participant
for failure to administer the Loan with the same care as it would exercise if
it were administering the Loan for its own account in the absence of
participants. Without limiting the generality of the foregoing, Lead Lender:
(a) may consult with legal counsel, independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken by it in accordance with the advice of such counsel, accountants or
experts; and (b) shall incur no liability under or in respect of this
Participation Agreement, the Note or any other Loan Document by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telegram, telecopy, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.

          Section 4.9. Lead Lender and Affiliates. Lead Lender and its
affiliates may accept deposits from, lend money to, act as trustee under
indentures of trust of, and generally engage in any kind of business with
Borrower, either Guarantor and any individual, corporation, partnership,
association, joint stock company, trust, unincorporated organization or joint
venture who may do business with Borrower or either Guarantor without any duty
to account therefor to Participant.

                                   ARTICLE V
                        REPRESENTATIONS AND WARRANTIES;
                                INDEMNIFICATION

          Section 5.1. Mutual Representations and Warranties. Lead Lender and
Participant represent and warrant to one another that their entering into this
Participation Agreement and their purchase or sale, as the case may be, of
their pro rata share of the Loan and the Loan Documents are in accordance with
all applicable laws, rules and regulations.

          Section 5.2. Representations and Warranties by Lead Lender. Lead
Lender hereby represents and warrants to Participant as follows:

               (a) It is the legal owner of the Loan, and has not heretofore
sold or transferred or otherwise disposed of the interest in the Loan conveyed
to Participant pursuant hereto, and has no obligation to so sell or transfer
such interest in the Loan to anyone except Participant as herein provided;

               (b) It has in its dominion, possession and control each of the
Loan Documents;

                                       11
<PAGE>
                    (c)  It has the right, power and authority to sell to
Participant its Participation Share;

                    (d)  It has provided to Participant true and correct copies
of all of the Loan Documents and any other material agreements between Lead
Lender and Borrower relating to the Loan and all financial statements concerning
Borrower as was provided by Borrower to Lead Lender; and

                    (e)  It closed the Loan in accordance with the underwriting
approvals obtained from Lead Lender's loan committee or committees.

                    (f)  It has not granted any other participation interest in
the Loan which contains either a substitution or a repurchase right similar to
that set forth in Section 2.3 or a first loss provision similar to that set
forth in Section 3.1(b).

          Section 5.3.   Representations and Warranties by Participant.

                    (a)  Participant represents and warrants to Lead Lender that
(i) it is aware of and is able to bear the economic risks involved in its
entering into this Participation Agreement and its purchase of its Participation
Share in the Note and other Loan Documents and does not anticipate the
occurrence of any event which would alter such ability; and (ii) it has had
adequate opportunity to review and has reviewed all financial and other data and
information relating to Borrower as it deems necessary for it to make a
determination to enter into this Participation Agreement;

                    (b)  Participant hereby acknowledges receipt of copies of
the Note, all other Loan Documents and all other documents necessary to make its
credit decision, and acknowledges its understanding and acceptance of the terms
thereof. Participant further acknowledges that it has, based upon its review of
such documents and information as it has deemed appropriate, made its own credit
and legal analysis and decision whether to enter into this Participation
Agreement, relying upon the Lead Lender only to the extent that Lead Lender has
made certain representations and warranties, and assumed certain obligations, as
specifically set forth in this Agreement. Participant also acknowledges that it
will continue to make its own credit decisions in taking or not taking any
action pursuant to this Participation Agreement, independently and without
reliance on Lead Lender except as indicated above; and

                    (c)  Participant has the right, power and authority to
acquire its Participation Share.

          Section 5.4.   Disclaimer of Other Representations or Warranties. Lead
Lender does not make any representations or warranties with respect to matters
not specifically set forth herein, including without limitation, the following
matters: (a) the truthfulness and accuracy of any of the representations by
Borrower contained in the Loan Documents; (b) the collectability of any amount
payable under the Note and the other Loan Documents; (c) the enforceability,
sufficiency or value of any rights conferred upon either of the Lenders under
any of the Loan Documents or hereunder by way of security or collateral for
obligations owed under the Note and the other Loan Documents; or (d) the
financial condition of Borrower or Guarantor(s).



                                       12
<PAGE>


     Section 5.5.  Indemnification. Lead Lender and Participant agree to
indemnify each other in accordance with their respective pro rata shares of the
Loan (to the extent not reimbursed by Borrower) from and against any and all
claims, liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against Lead Lender
or Participant in any way relating to or arising out of the Note or any other
Loan Document, or any action taken or omitted to be taken by Lead Lender or
Participant under the Note or any other Loan Document; provided, however, that
the indemnifying party shall not be liable for any portion of such claims,
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the other party's willful
misconduct or gross negligence, nor shall Participant be liable for any portion
of such claims, liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from Lead Lender's
failure to administer the Loan with the same care as it would exercise if it
were administering the Loan for its own account in the absence of participants.
The obligations of Lead Lender and Participant under this Section shall survive
the termination of this Participation Agreement, the payment of the Note, the
Loan and the payment of all other obligations of Borrower under the Loan
Documents.

                                   ARTICLE VI
                        PURCHASE OF PARTICIPANT'S SHARE

     Section 6.1.  Purchase Upon Request for Consent. In the event that
Participant notifies Lead Lender that it will not give its consent to any of the
proposed actions to be taken by Lead Lender described in Section 4.4 above or
that it will not give its consent and approval for the services of the attorney
chosen by Lead Lender pursuant to Section 4.5 above, Lead Lender shall have the
option (but not the obligation) to purchase or cause to be purchased,
Participant's pro rata share of the Loan within thirty (30) Business Days after
notifying Participant in writing of Lead Lender's intent to exercise such
option. Any such purchase shall be at a price equal to Participant's pro rata
share of the then outstanding principal balance of the Loan plus accrued
interest as of the date of purchase plus the Participant's pro rata share of any
other monies paid by Borrower to Lead Lender pursuant to the Loan Documents and
not yet distributed pursuant to the terms of this Agreement, plus the
Participant's pro rata share of any other advances authorized by the Loan
Documents (e.g. payment of real estate taxes) and actually made by Lead Lender
and Participant, through the date of purchase (the "Purchase Price").

     Section 6.2.  Purchase in the Event of Participant's Default. In the event
Participant fails or refuses to make any payment required to be made to Lead
Lender under this Agreement, including, without limitation, its pro rata share
of any Loan advance, then, in addition to any of its rights at law or in equity,
Lead Lender shall be entitled, but in no event shall have the obligation to (a)
fund Participant's pro rata share of any such payment and offset Purchaser's pro
rata share of any payments to be made by Lead Lender to Purchaser hereunder
and/or (b) purchase or cause to be purchased Participant's pro rata share of the
Loan within thirty (30) Business Days after notifying Participant in writing of
Lead Lender's intent to exercise such purchase option. Any such purchase shall
be for the Purchase Price.

     Section 6.3.  Consummation of Purchase. Any purchase pursuant to Section
6.1 or Section 6.2 above shall occur on a date selected by Lead Lender as
specified in its notice as required thereby. The applicable Purchase Price shall
be paid on such date in immediately

                                       13

<PAGE>


available funds and, concurrently therewith, Participant shall execute and
deliver to Lead Lender documents assigning its pro rata share to the other
Lender. Each Lender agrees to be responsible for any expenses incurred by or on
behalf of it, including, without limitation, legal fees and recording costs, in
connection with the aforesaid purchase.

                                  ARTICLE VII
                                 MISCELLANEOUS

     Section 7.1.  Transfer. Participant agrees not to sell, assign, transfer,
subparticipate or otherwise divide its Participation Share or any of its rights
in this Participation Agreement, except upon prior written notice to and consent
of Lead Lender. Lead Lender may sell other participations in the Note and other
Loan Documents without the consent of Participant so long as a result of such
sale, assignment or transfer (in whole or in part); (i) Lead Lender shall remain
Lead Lender under this Participation Agreement and retain control of the
administration of the Loan and all powers granted to Lead Lender under Section
4.3 hereof; (ii) Lead Lender shall not grant another participant an interest in
the Loan or in any loan collateral which would be prior or superior to the
rights of the Participant regarding the distribution and application of payment;
and (iii) Participant's distribution rights pursuant to Section 3.1 shall not be
adversely affected.

     Section 7.2.  Notices. Unless otherwise specified herein, all notices and
other communications provided for hereunder (each a "Notice" and collectively,
"Notices") shall be in writing and shall be given (a) by hand, (b) by United
States registered or certified mail, postage prepaid, return receipt requested,
(c) by overnight courier service guaranteeing next business day delivery, or (d)
via telecopier or facsimile transmission to the facsimile number listed below,
followed by delivery by United States first class mail, addressed to the party
for whom intended as follows:

          Lead Lender:
          Vestin Fund I, LLC, Vestin Fund II, LLC and Vestin Fund III, LLC
          c/o Vestin Mortgage, Inc.
          2901 El Camino Avenue
          Las Vegas, NV 89102
          Attn: Daniel B. Stubbs, Sr. V.P.
          Phone: (702) 227-0965
          Fax: (702) 921-5590

          Participant:
          Royal Bank America
          732 Montgomery Avenue
          Narberth, PA 19072
          Attn: Joseph P. Campbell, President
          Phone: (610) 668-4700
          Fax: (610) 668-1185

     Either party may designate by Notice given to the other party a new address
to which Notices hereunder shall thereafter be sent. All Notices hereunder shall
be deemed to have been delivered (i) upon actual receipt or refusal by the party
to whom intended, )ii) three (3) days after deposit thereof at any main or
branch United States post office if sent in accordance with (b) above, (iii)



                                       14

<PAGE>



upon deposit thereof with an overnight courier service in accordance with (c)
above, or (iv) upon actual receipt or confirmation of receipt if transmitted in
accordance with (d) above.

          Section 7.3. Governing Law. This Participation Agreement shall be
governed by, and construed in accordance with, the laws of the State of Nevada.

          Section 7.4. Severability of Provisions. The invalidity or
unenforceability of any term or provision of this Participation Agreement shall
not affect the validity or enforceability of the remaining terms or provisions
hereof, which shall remain in full force and effect.

          Section 7.5. Entire Agreement. This Participation Agreement
constitutes the entire agreement between the parties as of the date hereof with
respect to the subject matter hereof and may not be amended or terminated
orally. No modification hereof shall be valid unless in writing and signed on
behalf of Lead Lender and Participant by duly authorized officers thereof. All
previous agreements between the parties hereto with respect to the subject
matter hereof, whether written or oral, are superseded by this Participation
Agreement and are hereby rendered null and void and of no effect.

          Section 7.6. Participation An Undivided Sale. Except as limited by the
terms and conditions of this Participation Agreement, it is the intent and
purpose of the parties hereto that this Participation Agreement represents a
sale of an undivided interest in the Loan and the Loan Documents (as such
interest is set forth herein), and the rights, benefits and obligations arising
therefrom. This Participation Agreement shall not be deemed to represent a
pledge of any interest in the Loan or a loan between Lead Lender and
Participant.

          Section 7.7. Counterparts. This Participation Agreement may be
executed in any number of counterparts with each of such counterparts for all
purposes deemed to be an original; and all such counterparts shall together
constitute but one and the same Participation Agreement by each party in
counterpart, each executed part together representing the entire agreement.


                                       15
<PAGE>

          IN WITNESS WHEREOF, each of the parties hereto has caused this
Participation Agreement to be executed by having its duly authorized officer
sign below.


VESTIN FUND I, LLC,                     ROYAL BANK AMERICA
a Nevada limited liability company

By: VESTIN MORTGAGE, INC.,              By: /s/
a Nevada corporation, its Manager           -----------------------------------
                                            Name:
                                            Title: Executive Vice President
     By:  /s/ Daniel B. Stubbs
          -------------------------
          Name:  Daniel B. Stubbs           /s/ George McDonough
          Title: Senior V.P.                -----------------------------------
                                            George McDonough
                                            Vice President
VESTIN FUND II, LLC,
a Nevada limited liability company

By: VESTIN MORTGAGE, INC.,
a Nevada corporation, its Manager


     By:  /s/ Daniel B. Stubbs
          -------------------------
          Name:  Daniel B. Stubbs
          Title: Senior V.P.


VESTIN FUND III, LLC,
a Nevada limited liability company

By: VESTIN MORTGAGE, INC.,
a Nevada corporation, its Manager


     By:  /s/ Daniel B. Stubbs
          -------------------------
          Name:  Daniel B. Stubbs
          Title: Senior V.P.


                                       16
<PAGE>

                                   EXHIBIT A

                                    FORM OF
                           PARTICIPATION CERTIFICATE

     This Participation Certificate is delivered pursuant to the Participation
Agreement dated May ___, 2004 by and between Vestin Fund I, LLC, a Nevada
limited liability company, Vestin Fund II, LLC, a Nevada limited liability
company, Vestin Fund III, LLC, a Nevada limited liability company and Royal Bank
America (the "Participation Agreement") to evidence payment by the named
Participant of its pro rata share in the Loan. The terms and conditions of the
participation evidenced hereby are set forth in the Participation Agreement. All
capitalized terms used herein shall have the same meanings as set forth in the
Participation Agreement.

NAME OF PARTICIPANT:                               Royal Bank America

DATE OF LOAN CLOSING:                              March 15, 2004

PRINCIPAL AMOUNT OF LOAN:                          $16,300,000.00

AMOUNT OF PARTICIPANT'S SHARE:                     $15,000,000

PARTICIPANT'S PRO RATA SHARE:                      92.02%


                                          VESTIN FUND I, LLC,
                                          a Nevada limited liability company

                                          By: VESTIN MORTGAGE, INC.,
                                          a Nevada corporation, its Manager

                                               By: /s/ Daniel B. Stubbs
                                                   -------------------------
                                                   Name:  Daniel B. Stubbs
                                                   Title: Senior V.P.


                                          VESTIN FUND II, LLC,
                                          a Nevada limited liability company

                                          By: VESTIN MORTGAGE, INC.,
                                          a Nevada corporation, its Manager

                                               By: /s/ Daniel B. Stubbs
                                                   -------------------------
                                                   Name:  Daniel B. Stubbs
                                                   Title: Senior V.P.


                                          VESTIN FUND III, LLC,
                                          a Nevada limited liability company

                                          By: VESTIN MORTGAGE, INC.,
                                          a Nevada corporation, its Manager

                                               By: /s/ Daniel B. Stubbs
                                                   -------------------------
                                                   Name:  Daniel B. Stubbs
                                                   Title: Senior V.P.