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                                                                    EXHIBIT 10.1



CAPITOL CITY ESCROW, INC.
3838 WATT AVENUE, SUITE F-610
SACRAMENTO, CA 95821

ATTN:  DONNA M. GRADY, CSEO/PRESIDENT

                 YOSEMITE MORTGAGE FUND II, LLC-ESCROW AGREEMENT

Dear Ms. Grady:

Introduction

MFP Management LLC, a California limited liability company, is the manager
(Manager) of Yosemite Mortgage Fund II, LLC, a California limited liability
company (the Company), the issuer and registrant for an offering of units of
limited liability company interest of the Company (Units), under a Registration
Statement on Form SB-2, filed with the Securities and Exchange Commission on or
about August 19, 2002. The Units will be offered and sold by Rice Pontes
Capital, Inc. (Selling Agent), a California corporation and member firm of the
National Association of Securities Dealers, Inc., and by the Company.

The terms of the offering require that the payments of the purchase price of the
first 500,000 Units sold in the offering ($5,000,000) be placed in an escrow
account, and this Escrow Agreement (Agreement) sets forth the terms and
conditions under which Capitol City Escrow, Inc. (Escrow Agent or you) will hold
such funds (the Required Proceeds) as the Escrow Agent hereby appointed by the
Company and the Selling Agent for the offering to hold and distribute the
Required Proceeds.

TERMS AND CONDITIONS

1. Persons subscribing to purchase the Units will be required by the
Subscription Agreement with the Company and will be instructed by the Selling
Agent or the Company, as appropriate, to remit the purchase price to Selling
Agent for transmission to the Escrow Agent in the form of checks, drafts or
money orders (herein called Instruments of Payment), payable to the order of, or
funds wired in favor of, Escrow Agent until such time as the 500,000 Units have
been sold and the $5,000,000 received. Within one business day after receipt of
Instruments of Payment from the offering, the Selling Agent or the Company will
send to Escrow Agent: (a) a copy of each subscriber's completed Subscription
Agreement, and (b) the Instruments of Payment from such subscribers for deposit
into the deposit account entitled "Capitol City Escrow, Inc. as Escrow Agent for
Yosemite Mortgage Fund II, LLC", which deposit will occur within one business
day after Escrow Agent receives such materials. The credit to the account will
be handled according to Escrow Agent's normal deposit procedures and policies.

2. The aforesaid Instruments of Payment are to be promptly processed for
collection by Escrow Agent following deposit by the Manager for the Company into
the Escrow Account. The proceeds thereof are to be held in the Escrow Account
until such funds are either returned to the subscribers in accordance with
section 3 hereof or otherwise disbursed in accordance with section 6 hereof. In
the event any of the Instruments of Payment are returned to Escrow Agent for
non-payment prior to receipt of the Required Proceeds, Escrow Agent shall
promptly notify the Manager in writing of such non-payment, and is authorized to
debit the Escrow Account in the amount of such return payment.

3. In the event that at the close of Escrow Agent's business on _____________,
2003 (the Expiration Date) Escrow Agent is not in receipt of copies of
Subscription Agreements and Instruments of Payment dated not later than that
date (or actual wired funds), for the purchase of Units providing for total
purchase proceeds that equal or exceed the Required Proceeds (exclusive of any
funds received from subscriptions for Units from entities which we have notified
Escrow Agent are affiliated with the Company or Manager and their affiliates) or
in the event that Instruments of Payment are returned to the Escrow Agent for
non-payment and the subtraction, to the account pursuant to section 2 above
reduces the amount in the account to less than the Required Proceeds, Escrow
Agent shall promptly notify the Manager that such Instruments of Payment have
not been received by Escrow Agent.

Promptly following the Expiration Date, and in any event no later than ten
business days after the Expiration Date, Escrow Agent shall promptly return by
check the funds deposited in the Escrow Account, or shall return the Instruments
of Payment delivered to you if such instruments have not been processed for
collection prior to such time, directly to each subscriber at the address given
by the Company.

                                   Ex. 10.1-1


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Included in the remittance shall be a proportionate share of the income earned
in the Escrow Account allocable to each subscriber's investment in accordance
with the terms and conditions specified in section 7 hereof. Notwithstanding the
foregoing, Escrow Agent shall not be required to remit any payments until funds
represented by such payments have been collected.

In the event that the Company rejects any subscription for which Escrow Agent
has already collected funds, you will be so informed in writing by the Manager
to promptly issue a refund check to the rejected subscriber. If the Manager
rejects any subscription for which you have not yet collected funds but have
submitted the subscriber's Instrument of Payment for collection, you shall
promptly issue a check in the amount of the subscriber's Instrument of Payment
to the rejected subscriber after such funds clear. If Escrow Agent has not yet
submitted a rejected subscriber's check for collection, Escrow Agent shall
promptly remit the subscriber's Instrument of Payment directly to the
subscriber.

4. Following receipt by Escrow Agent of cash and Instruments of Payment (or
wired funds) of the Required Proceeds prior to the Expiration Date, it shall
notify the Company in writing within five business day when such funds have been
collected through normal banking channels and deposited in the Escrow Account.

5. Prior to the disbursement of funds deposited in the Escrow Account in
accordance with the provisions of section 3 or 6 hereof, Escrow Agent shall
invest all of the collected funds that have been deposited in the Escrow Account
in one money market account. No investments of Instruments of Payment will be
made until the funds thereof have been collected by Escrow Agent or unless the
Instrument of Payment is wired funds. If an Instrument of Payment is a cashier's
check on a major California bank, the investment will be made the business day
following receipt by the Escrow Agent of the Instrument of Payment. If the
Instrument of Payment is a cashier's check on any other bank, it will be held by
the Escrow Agent for five business days following the day of receipt before
investment of the funds. If the Instrument of Payment is in the form of funds in
an investment account of subscriber, the payment will be held by the Escrow
Agent for ten business days following the day of receipt before investment.
Escrow Agent will have no liability for any loss of interest or penalties
assessed if the money market account is liquidated before maturity.

6. All disbursements from the Escrow Account; including Net Escrow Income,
except for disbursements under the provisions of section 3 hereof, shall be made
by Escrow Agent only pursuant to the provisions of this section 6. Except for
disbursements authorized upon court order, Escrow Agent shall hold all funds in
the Escrow Account until (i) the date checks for Required Proceeds have cleared
normal banking channels after receipt by Escrow Agent of the Required Proceeds,
and (ii) receipt of letter instructions from the Company directing disbursements
of such funds to the Company.

In disbursing such funds, Escrow Agent is authorized to rely solely upon such
letter instructions which it receives from the Company whether or not such
instructions are correct, true or authentic; provided that, if in Escrow Agent's
opinion such letter instructions from the Company are unclear, it is authorized
to rely upon the legal counsel to the Company in distributing such funds to the
effect that distribution of the funds is authorized by the letter instructions
of the Company and that distribution of the funds in that manner is authorized
by and in compliance with such letter.

However, Escrow Agent shall not be required to disburse any funds attributable
to Instruments of Payment which have not been collected by Escrow Agent provided
that you shall use your best efforts to promptly collect such funds after
receipt of disbursement instructions from the Company in accordance with this
section, and shall disburse such funds in compliance with the disbursement
instructions from the Company.

7. In the event the offering of Units terminates prior to receipt of the
Required Proceeds, income earned on subscription proceeds deposited in the
Escrow Account (Gross Escrow Income) shall be remitted to subscribers in
compliance with section 3. Each subscriber's pro rata portion of Gross Escrow
Income shall be determined as follows: The total amount of Gross Escrow Income
shall be multiplied by a fraction, the numerator of which is determined by
multiplying the number of Units purchased by said subscriber times the number of
days said subscriber's proceeds are invested prior to termination of the
offering, and the denominator of which is the total of the numerators for all
such subscribers. The Company shall have the responsibility to compute each
subscriber's pro rate portion of Gross Escrow Income and to report to the Escrow
Agent in writing those amounts. Escrow Agent shall promptly remit all such Gross
Escrow Income in accordance with section 3 of this Agreement.

8. As compensation for serving as Escrow Agent hereunder, Escrow Agent shall
receive a fee, as set forth on Schedule A attached to this Agreement.

9. Escrow Agent, in performing any of its duties hereunder, shall not incur any
liability to anyone for any damages, losses or expenses, except for willful
default, breach of trust, or gross negligence, and accordingly it shall not
incur any such liability with respect to any action taken or omitted (1) in good
faith upon advice of its counsel given with respect to any question relating to
its duties and responsibilities under this Agreement, or (2) in reliance upon
any instrument, including any written instrument or instruction provided for in
this Agreement, not only as to its due execution and validity and effectiveness
of its provisions but also as to the truth and accuracy of information contained
therein, which Escrow Agent shall in good faith believe to be genuine, and (3)
to have been signed or presented by a proper person or persons and to conform to
the provisions of this Agreement. You have no duty under this Agreement to
ascertain or assure that the Company shall be in compliance with the terms and
conditions of the offering of the Units.

                                   Ex. 10.1-2


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10. Company covenants to defend and indemnify Escrow Agent, its directors,
officers, employees and agents harmless from any and all losses, liabilities,
claims, damages, costs or expenses (including without limitation reasonable
attorney's fees and disbursements) suffered or incurred by it arising out of or
in connection with Escrow Agent's status as a party to and in the administration
of this Agreement (including but not limited to the costs and expenses of
defending against any claim of liability in connection therewith), or in
connection with Escrow Agent's performance (excluding breach of trust, gross
negligence or willful misconduct) of any of the obligations hereunder, or Escrow
Agent's action pursuant to any instruction received by Escrow Agent from any
party hereto reasonably believed by Escrow Agent to have been properly given
hereunder, without the necessity of making any investigation with respect
thereto. Escrow Agent shall not be required to defend legal proceedings which
may be instituted against it with respect to the subject matter of this
Agreement or any written instructions, unless requested to do so by Company and
indemnified to Escrow Agent's satisfaction against the cost and expense of such
defense. Escrow Agent shall not be requested to institute legal proceedings of
any kind.

11. In the event of a dispute between the parties hereto or between any person
or persons who have subscribed for Units and delivered an instrument of payment
therefor and the Company, the Manager, or the Selling Agent, sufficient in
Escrow Agent's discretion to justify doing so, it shall be entitled to tender
into the registry or custody of any court of competent jurisdiction of the State
of California all money or property in its custody or control under this
Agreement, together with such legal pleadings as it shall deem appropriate, and
thereupon be discharged from all further duties and liabilities under this
Agreement.

In the event of any uncertainty of Escrow Agent as to its duties hereunder, it
may refuse to act under the provisions of this Agreement pending order of such
court of competent jurisdiction and it shall have no liability to the Company or
to any other person as a result of such action. Any such legal action may be
brought in such court in California as it shall determine to have jurisdiction
thereof. The filing of any such legal proceedings shall not deprive Escrow Agent
of its compensation earned prior to such filing.

12. All written notices and letters required hereunder to you shall only be
effective if delivered personally or by certified mail, return receipt requested
to Capitol City Escrow, Inc., 3838 Watt Avenue, Suite F-610, Sacramento, CA
95821. All written notices and letters required hereunder to the Manager or the
Company shall only be effective if delivered personally or by certified mail,
return receipt requested to MFP Management LLC, Steven M. Pontes, General
Manager, 414 13th Street, Suite 400, Oakland, CA 94612. All written notices and
letters required hereunder to the Selling Agent shall be only be effective if
delivered personally or by certified mail, return receipt requested, to David
Rice, Vice-president, Rice Pontes Capital, Inc., 2570 San Ramon Valley Blvd.,
Suite A201, San Ramon, CA 94583.

13. This Agreement shall be governed by the laws of the State of California as
to both interpretation and performance.

14. The provisions of this Agreement shall be binding upon the legal
representatives, successors and assigns of the parties hereto.

15. The Company hereby acknowledges that Escrow Agent is serving as escrow agent
only for the limited purposes herein set forth, and hereby agrees that it will
not represent or imply that Escrow Agent, by serving as escrow agent hereunder
or otherwise, has investigated the desirability or advisability of investment in
the Company, or has approved, endorsed or passed upon the merits of the Units or
the Company. The Company and Selling Agent further agree to instruct each of
their representatives, and any other person who may offer Units to persons from
time to time, that they shall not represent or imply that you have investigated
the desirability or advisability of investment in the Units or the Company, or
have approved, endorsed or passed upon the merits of the Units or the Company,
nor shall they use your name in any manner whatsoever in connection with the
offer or sale of the Units other than by acknowledgment that Escrow Agent has
agreed to serve as escrow agent for the limited purposes herein set forth.

16. This Agreement and any amendment hereto may be executed by the parties
hereto in one or more counterparts, each of which shall be deemed to be an
original.

17. In the event that Escrow Agent receives Instruments of Payment (or wired
funds) after the Required Proceeds have been received and the proceeds of the
Escrow Account have been distributed to the Company, it is hereby authorized to
deposit such Instruments of payment to any deposit account as directed by the
Company. The application of said funds into a deposit account directed by the
Company shall be a full acquittance to Escrow Agent and it shall not be
responsible for the application of said funds.

18. Escrow Agent shall be bound only by the terms of this Escrow Agreement and
shall not be bound or incur any liability with respect to any other agreements
or understanding between any other parties, whether or not the Escrow Agent has
knowledge of any such agreements or understandings.

19. Indemnification provisions set forth herein shall survive the termination of
this Agreement.

20. Upon acceptance and distribution of the Required Proceeds as provided in
this Agreement, this Agreement shall terminate and the Escrow Agent shall have
no further responsibility or liability with regard to the terms of this
Agreement.

                                   Ex. 10.1-3


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21. The Escrow Agent has no responsibility for accepting, rejecting or approving
subscriptions, nor does it have any responsibility whatsoever to determine the
authenticity or due authorization for the submission or signing of any
Subscription Agreement.

22. This Agreement shall not be modified, revoked, released or terminated unless
reduced to writing and signed by all parties hereto, subject to the following
paragraph.

Should at any time, any attempt be made to modify this Agreement in a manner
that would increase the duties and responsibilities of the Escrow Agent or to
modify this Agreement in any manner which the Escrow Agent shall deem
undesirable, or at any other time, the Escrow Agent may resign by notifying the
Company in writing, by certified mail, and until (i) the acceptance by a
successor escrow agent as shall be appointed by the Company; or (ii) thirty (30)
days following the date upon which notice was mailed, whichever occurs sooner,
the Escrow Agent's only remaining obligation shall be to perform its duties
hereunder in accordance with the terms of the Agreement.

23. The Escrow Agent may resign at any time from its obligations under this
Escrow Agreement by providing written notice to the Company. Such resignation
shall be effective on the date specified in such notice, which shall be not less
than thirty (30) days after such written notice has been given. The Escrow Agent
shall have no responsibility for the appointment of a successor escrow agent.
The Company shall within 20 days designate a successor agent, and the Escrow
Agent shall promptly deliver all funds, Short-term Investments and Instruments
of Payment in its custody or control to the successor agent. Unless otherwise
provided in this Agreement, final termination of this Escrow Agreement shall
occur on the date all funds, Short-term Investments and Instruments of Payment
held in the Escrow Account or otherwise under the custody or control of the Bank
are distributed either (a) to the Company pursuant to paragraph 6 hereof, (b) to
subscribers pursuant to paragraphs 3 and 7 hereof, or (c) to a successor escrow
agent as described herein. The Company shall give notice of the name and address
of the successor escrow agent to each subscriber.

24. The Escrow Agent may be removed for cause by the Company by written notice
to the Escrow Agent effective on the date specified in such notice. The removal
of the Escrow Agent shall not deprive the Escrow Agent of its compensation
earned prior to such removal.

Please sign and return two copies of this letter, which have been signed by the
Company and the Selling Agent, to indicate your acceptance and agreement to the
terms and conditions hereof.

                                     Sincerely yours,

                                     YOSEMITE MORTGAGE FUND II, LLC,
                                     a California limited liability company

                                     By:  MFP MANAGEMENT LLC,
                                          a California limited liability company

                                     By:  /s/ Steven M. Pontes, General Manager
                                          --------------------

Agreed to as of the 1st day of __________, 2002

                                     RICE PONTES, CAPITAL, INC.,
                                     a California corporation

                                     By:  /s/ Anthony Pontes, President
                                          ------------------

The terms and conditions contained above are hereby accepted and agreed to as of
the ___ day of __________, 2002 by:

                                     CAPITOL CITY ESCROW, INC.,
                                     a California corporation

                                     By:  /s/ Donna M. Grady, President
                                          ------------------

Schedule A to Escrow Agreement

                                   Ex. 10.1-4