<PAGE>
                                                                    EXHIBIT 10.3

                            INTERCREDITOR AGREEMENT

     THIS INTERCREDITOR AGREEMENT, dated as of January 17, 2003 (this
"AGREEMENT"), is entered into by and between VESTIN MORTGAGE, INC., a Nevada
corporation ("VESTIN MORTGAGE"), VESTIN FUND I, LLC., a Nevada limited
liability company ("VESTIN FUND I") and VESTIN FUND II, LLC, a Nevada limited
liability company ("VESTIN FUND II") whose principal place of business and post
office address is 2901 El Camino Avenue, Suite 206, Las Vegas, Nevada 89102,
(individually, "LEAD LENDER, or collectively, "LEAD LENDERS" and WESTERN UNITED
LIFE ASSURANCE COMPANY, a Washington corporation ("WESTERN") whose principal
place of business and post office address is W. 601 1st Avenue, Spokane, WA
99201, ("LENDER")

                                   RECITALS:

     A.   Vestin Fund I is an SEC registered direct participation program that
provides financing secured by deeds of trust or mortgages on real property.
Vestin Fund I contains loans in the approximate amount of $100,000,000.

     B.   Vestin Fund II is a SEC registered direct participation program that
provides financing secured by deeds of trust or mortgages on real property.
Vestin Fund II contains loans in the approximately amount of $210,000,000.

     C.   Vestin Mortgage is the Manager for Vestin Fund I and Vestin Fund II.

     D.   Western intends to purchase a portion of some of the loans held by
Vestin Fund I and Vestin Fund II as hereinafter set forth in Exhibit "A".

     G.   Vestin Mortgage wishes to sell by assignment a portion of some of the
loans held by Vestin Fund I and Vestin Fund II, as hereinafter set forth in
Exhibit "A".

     H.   The Lead Lenders and Lender enter into this Agreement to, among other
things, further define their respective rights, duties, authorities and
responsibilities regarding their proposed shared interests in the various loans
which make up the portfolio of Vestin I and Vestin II and to define the priority
of payment for all of the proceeds from the assigned participation in those
loans.

     NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and based upon the foregoing
Recitals which are an integral part of this Agreement, as well as the mutual
covenants and promises contained herein, Vestin Mortgage, Vestin Fund I, Vestin
Fund II, and Western hereby agree as follows:



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                             SECTION 1. DEFINITIONS

         Section 1.1. Definitions.  All capitalized terms used in this
Agreement shall have the meanings assigned to them below in this Section 1 or
in the provisions of this Agreement referred to below:

         "Agreement" shall mean this Intercreditor Agreement as amended,
modified or restated in accordance with the terms hereof.

         "Assignment" shall mean the actual recorded assignment of a specific
percentage interest in a "Loan".

         "Bankruptcy Proceeding" shall mean, with respect to any Person, a
general assignment by such Person for the benefit of its creditors, or the
institution by or against such Person of any proceeding seeking its relief as
debtor, or seeking to adjudicate such Person as bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment or composition of such Person
or its debts, under any law relating to bankruptcy, insolvency, reorganization
or relief of debtors, or seeking appointment of a receiver, trustee, custodian
or other similar official for such Person or for any substantial part of its
property.

         "Borrower" shall mean any person or entity that obligates itself or
its property as security for a "Loan".

         "Collateral" shall mean all the real and personal property collateral
under the "Loan Documents".

         "Default" shall mean any event or condition, the occurrence of which
would, with the lapse of time or the giving of notice, or both, pursuant to the
"Loan Documents" constitute an Event of Default.

         "Interest Rate" shall mean a fixed rate of interest equivalent to
twelve percent (12%) per annum to be paid to Lender in accordance with this
Agreement for its "Participation Interest" in the "Loans" assigned by Vestin
Mortgage and Vestin Fund I and Vestin Fund II.

         "Late Charges" shall mean the late charges and or default rate charged
to Borrower in the event of default or late payments under the "Loan Documents".

         "Lead Lender and Lead Lenders" shall mean Vestin Mortgage, Vestin Fund
I, Vestin Fund II or any successor lead lender.

         "Lender and Lenders" shall mean Western or their assignee.


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     "Loan Documents" shall mean of all the various notes, deeds of trusts,
guarantees, title policies, security agreements, loan agreements, assignment of
rents and profits, and whatever documents are in existence to protect and
secure the repayment of the Borrower's obligations under the "Loan".

     "Loan" shall mean the note, and all of the documents and agreements that
evidence and secure the debt of the "Borrower", owned by Vestin I and Vestin II.

     "Priority of Payment" shall mean the order in which payments are made to
the "Lead Lender" and to the "Lender".

     "Participation Interest" shall signify amount in dollars of the
"Assignment" owned by Lender in the "Loan".

     "Participation Pool" shall mean those "Loans" identified on Exhibit "A"
attached hereto in which "Lenders" shall acquire "Participation Interests", as
such Participation Pool may be periodically modified in accordance with this
Agreement.

     "Substitution of Security" shall mean the exchange of one "Participation
Interest" in a "Loan" for a "Participation Interest" in a different "Loan" of
an equal amount.

     1.2   Effectiveness of this Agreement.  The effectiveness of this
Agreement is conditioned upon (a) the execution and delivery of this Agreement
by the Lead Lenders and the Lenders, (b) the execution, delivery and
effectiveness of the Loan Assignments and the Loan Documents by the Lead
Lenders, and (c) the payment of the Participation Interest by Lenders to the
Lead Lenders, which payment shall be made by Lenders to Lead Lenders as Loans
are funded in the Participation Pool.


                     SECTION 2. RELATIONSHIP AMONG LENDERS

     2.1   Restrictions on Actions.  Lead Lenders agree that, so long as any
portion of a Loan is outstanding or unpaid they shall, for the benefit of
Lenders, except as permitted under this Agreement:

           (a)  Notify Lenders before taking or filing any action, judicial or
                otherwise, to enforce any rights or pursue any remedy under the
                Loan Documents, except for delivering notices hereunder.

           (b)  Refrain from (1) selling (but shall be permitted to accept the
                payoff of) any portion of the Loan to the Borrowers or any
                affiliate of the Borrowers and (2) accepting any substitute
                guaranty or substituting any other security for the Loan from
                the Borrowers or any Affiliate of the Borrowers, without
                Lender's consent. In the event Lender refuses to


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                     consent to such requested action, Lead Lenders shall be
                     entitled to either repurchase Lender's Participation
                     Interest for the amount of principal and accrued interest
                     outstanding or offer the Lenders a Substitution of
                     Security.

     2.2     Representations and Warranties.  Lead Lenders and Lender represent
and arrant to each other that:

             (a)     It is a legal entity duly organized, existing and in good
standing under the laws and governmental authority of the jurisdiction of its
domicile, and (ii) has all requisite corporate power to own its property and
conduct its business as now conducted and as presently contemplated.

             (b)     The execution, delivery and performance by such Lead
Lenders or Lenders of this Agreement has been authorized by all necessary
proceedings (corporate or otherwise) and does not and will not contravene any
provision of law, its charter or by-laws or operating agreement or any
amendment thereof, or of any indenture, agreement, instrument or undertaking
binding upon such Lead Lenders or Lenders.

             (c)     The execution, delivery and performance by such Lead
Lenders or Lenders of this Agreement will result in a valid and legally binding
obligation of such Lead Lenders or Lenders enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent conveyance and similar
laws affecting creditors' rights generally, and general principles of equity
(regardless of whether the application of such principles is considered in a
proceeding in equity or at law).

             (d)     It has received and approved, as to form and content,
sample copies of the Loan Documents and Assignments. However, such approval
shall not operate as a warranty or representation of the adequacy, validity or
binding effect of any of the Loan Documents or Assignments.

             (e)     Lead Lender represents that none of the Loans are in
default at the time of the Assignment to Lender, and that, to the knowledge of
Lead Lenders, none of the Borrowers or their assignees have notified Lead
Lenders of any claims or offsets under the Loan Documents.

     2.3     Cooperation; Accountings.     Lead Lenders will, upon the
reasonable request of Lenders, from time to time execute and deliver or cause to
be executed and delivered in a timely fashion such further instruments, and do
and cause to be done such further acts as may be necessary or proper to carry
out more effectively the provisions of this Agreement. The Lead Lenders agree to
provide to Lenders upon reasonable request, but in no event more frequently than
once a month, a statement of all payments received in respect of the Loans
Assigned.

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     2.4  Reliance on Lead Lenders. Lenders agree that it has independently
made its own analysis of the Loans and the decision to enter into this
Agreement based upon such documents and information as it has deemed
appropriate. The Lead Lenders shall promptly provide to Lenders a copy of all
financial statements and reports of operating results and other documents and
information received by the Lead Lenders in its capacity as such pursuant to
the Loan Documents. The Lead Lenders shall have a duty and responsibility to
provide Lenders with any credit or other information concerning the affairs,
financial condition or business of the Borrowers which may come into the
possession of the Lead Lenders, including financial statements, credit reports
and any other documents and information upon the reasonable request of Lenders.

     2.5  Limitation on Lead Lender's Liability.

          (a)  Lead Lender's obligation with respect to interest payments shall
be to remit to the Lenders a monthly payment based on the Interest Rate
calculated on the Participation Interest and the principal amount of the
Participation Interest when a Loan pays off or matures in accordance with this
Agreement.

          (b)  Lead Lenders shall be entitled to rely upon any certification,
notice or other communication (including any thereof by telephone, telex,
telegram, cable or telecopy) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the Lenders. Should approval of any
action, any inaction or any proposed course of conduct in administering the
Loan (either before or after the occurrence of an Event of Default) be
requested in writing by the Lead Lenders from Lenders, such Lenders shall
approve or deny such request in writing and shall deliver the writing to the
Lead Lenders within ten (10) calendar days after the Lender's receipt of the
Lead Lenders' request. Any Lender's failure to respond within the ten (10)
calendar days shall be deemed consent by such Lender to such request.

          (c)  Lead Lenders do not assume and shall have no responsibility or
liability, express or implied, for (i) the collectibility of the Loan made to
Borrowers under, or the enforceability of, any of the Loan Documents, or (ii)
the financial condition or creditworthiness of the Borrowers, or (iii) any
credit or other information furnished by the Borrowers to Lead Lenders, or (iv)
the value of any collateral for the Loan.

     2.6  Lead Lender Rights as Lender. The Lead Lender in its capacity as a
lender hereunder shall have the same rights, powers and obligations hereunder
as all other Lenders and may exercise the same and is entitled to collect and
retain for its own account any and all late charges, default interest and
extension fees as though it were not acting as the Lead Lender.

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                       SECTION 3. ADMINISTRATION OF LOAN

         3.1      ADMINISTRATION AND SERVICING OF LOAN. In administering and
servicing the Loan, Lead Lenders shall act in their own behalf as to their
interest in the Loan and shall act as an independent contractor (and not as an
agent or trustee) for the Lenders with respect to their respective interests in
the Loan. The Lenders hereby appoint and authorize Lead Lenders to act for and
on behalf of the Lenders with regard to the Loan, subject to the restrictions
set forth in this Agreement. Lead Lenders shall utilize its own facilities and
equipment and its own employees and other persons authorized under the Loan
Documents in the administering and servicing of the Loans, all without cost to
the Lenders.

                  In its administering and servicing of the Loan, Lead Lenders
shall perform the following duties (the enumeration of said duties not being
intended to limit the duties to be performed by Lead Lenders in accordance with
the foregoing paragraph) and shall be subject to the following restrictions and
shall have the following rights:

                           (a)      POSSESSION OF LOAN DOCUMENTS. For the
benefit of the Lenders, Lead Lenders shall hold in its possession at its
principal office executed originals of all the Loan Documents for each Loan
assigned and shall deliver conformed copies of each thereof to the Lenders.

                           (b)      EXPENSES/LOSSES. In the event that any
reasonable legal expenses or other expenses for the preservation of the
collateral for the Loan or for the enforcement of the Loan are incurred by Lead
Lenders in connection with the Loan or on or after or in connection with the
occurrence of an Event of Default or the enforcement of any of the Loan
Documents (including fees of counsel and other expenses), Lead Lenders shall
bear and advance all such costs. Upon receipt of reimbursement for such
expenses from Borrowers or any other person, Lead Lenders shall be entitled to
retain such reimbursement.

                           (c)      COLLECTIONS. Lead Lenders shall use
reasonable efforts to collect all payments of principal, interest and fees due
from the Borrowers under the Loan Documents and shall remit to the Lenders on a
monthly basis a payment calculated at the agreed Interest Rate based on the
outstanding balance of the Participation Interest. The Lenders shall have the
right to an accounting for all monies received by Lead Lenders in connection
with each Loan that has a Participation Interest by Lenders.

                           (d)      RECORDS. Lead Lenders shall maintain such
books and records relating to the Loan as it would were the Loan funded solely
by Lead Lenders, which books and records shall be made available to the Lenders
at Lead/Lenders' main branch in Las Vegas, Nevada at all reasonable times for
purposes of inspection, examination and audit upon no less than forty-eight
(48) hours prior notice.

                           (e)      INFORMATION. During the term of this
Agreement, Lead Lenders shall provide to the Lenders complete and current
information as to the accrual status of the

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Loan and the status of principal and interest payments, and all information
supplied by Borrowers in connection with the Loan. The Lenders will treat all
such information as confidential, except that disclosure thereof may be made if
required by law or the order of a court having jurisdiction.

                  (f)      Administrative Decisions. Lead Lenders shall not,
without written consent of Lenders, (1) release, or agree to the substitution
of other security for any portion of the Real Property, Leasehold Rights and/or
Collateral securing the Loans, (2) grant any release in favor of the Borrowers
under the Loan Documents, or waive the Lenders' rights to enforce the
obligations of the Borrowers, (3) consent to or accept the cancellation or
termination of any of the Loan Documents, except upon payment in full of each
Loan. Subject to the foregoing limitations, and until the occurrence and
declaration of an Event of Default under the Loan Documents and Borrowers
failure to cure within twenty (20) days thereof, Lead Lenders shall have the
right to make decisions in connection with the day-to-day administration and
servicing of the Loans, relating to inspections, review of financial data, and
other matters of an ordinary nature involved in the administration and
servicing of the Loans, without the Lender's prior review or approval.

                  (h)      Reasonable Efforts. If any Event of Default shall
occur under any of the Loans, Lead Lenders shall use reasonable efforts in
accordance with the Loan Documents to cause the Borrowers, Guarantors and/or
Limited Guarantors to remedy the default.

                  (i)      Hazard Insurance and Condemnation Awards. If Lead
Lenders become aware of any damage to or actual or potential condemnation
affecting any material portion of the Real Property, Leasehold Rights and/or
Collateral securing the Loans, Lead Lenders will promptly notify Lenders
thereof. The proceeds of any insurance recovery or condemnation award received
by Lead Lenders and not immediately disbursed or applied to the repayment of
the Loan or not otherwise distributed by Lead Lenders shall be deposited in
an interest-bearing account, in trust for all lenders, and the income, if any,
received by Lead Lenders from such account and not payable to others shall
be shared with the Lenders in accordance with terms of this Agreement.

         3.2      Payment Priorities Between Lead Lenders and Lenders.

                  (a)      Lead Lenders and Lenders agree that all payment
and/or prepayment of principal due on the Loan, received by the Lead Lenders,
shall be held for the account of the Lenders and Lead Lenders as their
respective interests may appear, and such payment shall be applied in the
following order of priority: (i) first to the payment of that pro rata portion
of principal of the Loan provided by Lender, (ii) next to pay any pro rata
portion of accrued or outstanding interest due Lenders at the agreed Interest
Rate, (iii) next to that portion of the principal of the Loan provided by
Vestin Mortgage and Vestin Fund I and Vestin Fund II. Vestin Mortgage, Vestin
Fund I and Vestin Fund II shall not be entitled to receive any payment of its
pro rata share of the principal of the Loan in question until Lender has
received payment in full of its Participation Interest of the principal of the
Loan and all accrued interest payable to Lenders under this Agreement.

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     (b)   Each payment of interest on the Loan, received by the Lead Lender,
shall be for the account of the Lenders and Lead Lenders as their respective
interests may appear, and such payment shall be applied first to the payment of
agreed Interest Rate due on the Participation Interest of the Loan assigned to
Lender for such period that the interest is due.

     (c)   As an example, assume Lenders purchase an Assignment of a 25%
Participation Interest in a $10,000,000 Loan. The Loan carries an interest rate
of 14% and pays monthly interest only payments. The Lenders agreed Interest
Rate is 12%. Lenders and Lead Lenders would receive the following.

            Example 1:  Borrowers make a monthly payment of $116,666.67.
Lenders are paid their full share of interest at 12% on $2,500,000 or $25,000.
Vestin Mortgage, Vestin Fund I or Vestin Fund II receives $91,666.67 or the
balance of the interest paid.

            Example 2:  Borrowers make a monthly payment of only $50,000.
Lenders are paid their full share of interest at 12% or $25,000. Vestin
Mortgage, Vestin Fund I or Vestin Fund II receives $25,000, or the balance
of the interest paid.

            Example 3:  Borrowers do not make a monthly payment, default,
declare bankruptcy or withhold payments for any reason then, Lead Lenders in
their sole and absolute discretion may (i) buy Lenders out of the Loan for
$2,500,000 plus any accrued interest; (ii) offer a Substitution of Security in
a Loan acceptable to Lender at Lender's sole and absolute discretion in the
amount of $2,500,000. (In case of an acceptable Substitution of Security, Lead
Lenders will pay Lender any outstanding accrued interest.); or (iii) Lead
Lenders shall proceed with collection remedies under the Loan documents, and
Lender's interest shall accrue at 12%. (Notwithstanding 3(i) above, Lead
Lenders shall have the right at any time to purchase all or any portion of
Lender's Participation Interest by paying principal plus that portion of
accrued interest upon that portion so purchased.

            Example 4:  Borrowers payoff a portion of the Loan. Lenders are
paid their full pro rata share of the principal balance of the Participation
Interest and interest at 12% to the date of payoff.

            Example 5:  Borrowers pay off the Loan. Lenders are paid their full
pro rata share of the Loan equal to their Participation Interest plus interest
at 12%. Vestin Mortgage, Vestin Fund I or Vestin Fund II may offer Lender a new
Participation Interest in another loan, but Lender has no obligation to accept
such interest.

     (d)    In the event of foreclosure and repossession of any collateral
securing the Loans, Lead Lenders shall be obligated to take all measures as
they in their best judgment determine are necessary and proper to market,
develop, manage and/or sell the collateral, and apply monies recovered thereby
as set forth above in this subsection 3.2.


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         3.3      Notices under Collateral Documents. Lead Lenders shall deliver
                  to the Lenders, promptly upon receipt thereof, duplicates or
                  copies of all notices, requests and other instruments received
                  by it from any other party under or pursuant to any of the
                  Loan Documents, if not previously furnished to the Lenders.

         3.4      Prohibition on further transfer of Participation Interests to
                  third parties. Neither Lead Lender nor Lender shall pledge,
                  sell, or otherwise transfer to any unrelated third party, any
                  of its Participation Interest in any loan governed by this
                  document, without the prior written consent of the other
                  party.

                      SECTION 4. TERMINATION OF AGREEMENT

         Upon final payment in full of the Loans or all obligations owing to
Lenders, such Lenders shall cease to be a party to this Agreement; provided,
however, if all or any part of any payments to such Lenders are invalidated or
set aside or required to be repaid to any Person in any Bankruptcy Proceeding
or otherwise, then this Agreement shall be renewed as of such date and shall
thereafter continue in full force and effect to the extent of the Loan so
invalidated, set aside or repaid. If any portion of this agreement is declared
to be invalid or unenforceable then the remaining portions of the Agreement
shall remain in full force and effect.

                         SECTION 5. NOT A JOINT VENTURE

         Neither the execution of this Agreement nor the Lenders' several
ownership of interests in Loans, nor any agreement to share in profits or losses
arising as a result of the Loans, is intended to be, nor shall it be construed
to be: (a) the formation of a partnership or joint venture between the Lead
Lenders and Lenders, or (b) the creation of a loan transaction between the Lead
Lenders, as borrower, and Lender, as lender. Vestin Mortgage, in its capacity
as Lead Lender, shall not be deemed to be a trustee for the Lenders in
connection with the Loans or their interests therein. Vestin Mortgage, in its
capacity as Lead Lender, shall owe to the Lenders no duty except as
specifically set forth in this Agreement, and no lender shall be liable to any
other person for the liability of any other lender arising in connection with
the Loans or any transaction related to the Loans, except as may be expressly
set forth in this Agreement.

                            SECTION 6. MISCELLANEOUS

         8.1      Amendment.  Neither this Agreement nor any provision hereof
may be amended, waived, discharged or terminated orally, but only by an
instrument in writing signed


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by all parties hereto.

         8.2      HEADINGS.  The headings in this Agreement are for convenience
of reference only and shall not define or limit the provisions hereof.

         8.3      APPLICABLE LAW.  This Agreement shall be construed in
accordance with and governed by the laws of the State of Nevada.

         8.4      PARTIES IN INTEREST; DECISIONS BY MAJORITY LENDERS. All of
the terms, covenants and conditions contained in this Agreement shall inure to
the benefit of and be binding upon the parties hereto and their permitted
successors and assigns. There shall be no third-party beneficiaries of this
Agreement.

         8.5      NOTICES.  Notices under this Agreement shall be in writing
and personally delivered or sent by certified or registered U.S. mail, or a
recognized air courier service, return receipt requested, or by telecopy,
acknowledgment of receipt requested, to the parties at their addresses
specified in the first paragraph of this Agreement. Such addresses may be
changed from time to time by the addressee be serving notice as provided above.

         8.6      COUNTERPART EXECUTION.  This Agreement may be executed in any
number of counterparts with the same effect as if all parties had signed the
same document. All counterparts shall be construed together and shall
constitute one agreement.

         8.7      ATTORNEY'S FEES AND COSTS.  If legal action is instituted to
enforce the terms of this Agreement, the prevailing parties shall be entitled
to recover from the losing parties, all costs of collection and enforcement,
including reasonable attorney's fees. For purposes of this section, the award
and recovery of attorney's fees and costs shall survive the entry of any
judgment thereon and shall include, without limitation, fees incurred in the
following: (1) Post Judgment Motions; (2) Contempt Proceedings; (3)
Garnishment, levy, debtor and third party examinations; (4) Discovery; (5)
Bankruptcy proceedings or other litigation; and (6) appeals.

         IN WITNESS WHEREOF, the Lenders have caused this instrument to be duly
executed as of the day and year first above written.

VESTIN MORTGAGE, INC., a Nevada corporation

By: /s/ Daniel B. Stubbs
   ------------------------------------
   Daniel B. Stubbs, Vice President

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VESTIN FUND I, LLC, a Nevada corporation

By:  Vestin Mortgage, Inc., a Nevada corporation
     Its Manager


By:  /s/ Daniel B. Stubbs
     ------------------------------------------
     Daniel B. Stubbs, Vice President


VESTIN FUND II, LLC, a Nevada corporation

By:  Vestin Mortgage, Inc., a Nevada corporation
     Its Manager


By:  /s/ Daniel B. Stubbs
     ------------------------------------------
     Daniel B. Stubbs, Vice President



WESTERN UNITED LIFE ASSURANCE COMPANY,
A Washington corporation


By: /s/ signature not legible
    -------------------------------------------
    Corp. Secry


By:
    -------------------------------------------





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                                  EXHIBIT "A"
                                       TO
                            INTERCREDITOR AGREEMENT
                             DATED JANUARY 17, 2003


Loan No. 870-12-02

Mortgagor: DAYTONA BEACH RESORT, LLC, a Florida limited liability company

Mortgagee: VESTIN MORTGAGE, Inc., a Nevada corporation

Loan Amount: $10,900,000.00

Recorded: December 31, 2002, in Book 4991, as Instrument 2002-299739, at
          Page 1998

Portion of Loan Assigned: $6,000,000.00



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