Intercreditor Agreement


    
      

      

    

    Exhibit
      10.10

    


    INTERCREDITOR
      AGREEMENT

    


    THIS
      INTERCREDITOR AGREEMENT, dated as of October 13, 2006 (this “Agreement”), is
      entered into by and between VESTIN MORTGAGE, INC., a Nevada corporation
      (“Vestin”), VESTIN ORIGINATIONS, INC., a Nevada corporation (“Originations”),
      VESTIN REALTY MORTGAGE I, Inc., a Maryland corporation (“VRM
      I”), VESTIN
      REALTY MORTGAGE II, Inc., a Maryland corporation (“VRM
      II”) and
      VESTIN FUND III, LLC, a Nevada limited liability company (“VF III”) whose
      principal place of business and post office address is 8379 West Sunset Road,
      Las Vegas, Nevada. 89113, (individually, “Lead Lender, or collectively, “Lead
      Lenders” and OWENS FINANCIAL GROUP, INC.., a California corporation (“Owens
      Financial”) and OWENS MORTGAGE INVESTMENT FUND, a California Limited Partnership
      (“Owens Mortgage Investment Fund”) whose principal place of business and post
      office address is 2221 Olympic Boulevard, Walnut Creek, California 94595,
      (individually, a “Lender”, or collectively, “Lenders”)

    


    RECITALS:

    


    	A.  	
            VRM
              I is a publicly traded Mortgage REIT that provides financing secured
              by
              deeds of trust or mortgages on real
              property.

          


    


    	B.  	
            VRM
              II is a publicly traded Mortgage REIT that provides financing secured
              by
              deeds of trust or mortgages on real
              property.

          


    


    	C.  	
            Vestin
              Fund III is a SEC registered direct participation program that provides
              financing secured by deeds of trust or mortgages on real
              property.

          


    


    	D.  	
            VESTIN
              is a duly formed Nevada corporation, and is responsible for the daily
              operations of VRM I and VRM II and is the Manager of VF
              III.

          


    


    	E.  	
            Originations
              is a licensed Mortgage Broker that arranges loans for the benefit of
              VRM
              I, VRM II, VF III and other commercial real estate
              lenders.

          


    


    	D.  	
            Owens
              Mortgage Investment Fund is a SEC registered public partnership that
              provides financing and owns notes secured by deeds of trust or mortgages
              on real property.

          


    


    	F.  	
            Owens
              Financial is the General Partner of Owens Mortgage Investment
              Fund.

          


    


    	G.  	
            Owens
              Financial and Owens Mortgage Investment Fund have agreed to fund a
              $20,000,000.00 portion of a $31,250,000.00 loan to Cliff Shadows
              Properties, LLC, a Nevada limited liability company, a loan originated
              by
              Originations.

          


    


    	H.  	
            The
              Lead Lenders and Lenders enter into this Agreement to, among other
              things,
              further define their respective rights, duties, authorities and
              responsibilities regarding their proposed shared interests in the and
              to
              define the priority of payment for all of the proceeds from the assigned
              participation in the loan.

          


    


    


    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, Originations, Vestin, VRM 1, VRM II, VF III, Owens Financial,
      and Owens Mortgage Investment Fund hereby agree as follows:

    



    
      
         

      

      
         

        
          

        

      

      
         

      

    


    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 lntercreditor 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.

    


    “Borrowers”
      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 the rate of interest paid to Owens Financial or Owens Mortgage
      Investment Fund for their “Participation Interest” in the “Loan”. This rate
      shall be a fixed rate of Eleven Percent (11.0%) for the duration of the
      Loan.

    


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

    


    “Lead
      Lender and Lead Lenders” shall mean Originations, Vestin, VRM I, VRM II, VF III
      or any successor lead lender.

    


    “Lender
      and Lenders” shall mean Owens Financial or Owens Mortgage Investment Fund or
      their assignee.

    


    “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 Borrowers obligations under the note.

    


    “Loan”
      shall mean the note, and all of the documents and agreements that evidence
      and
      secure the debt of the “Borrowers”.

    


    “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 Owens
      Financial and Owens Mortgage Investment Fund in the “Loan”.

    


    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 Documents by the Lead Lenders,
      and the payment of the Participation Interest by Lenders to the Lead
      Lenders.


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    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 any portion of the Loan to the Borrowers or any affiliate
              of the Borrowers and (2) accepting any substitute guaranty or any other
              security for, the Loan from the Borrowers or any Affiliate of the
              Borrowers, without Lenders consent. In the event Lender refuses to
              consent
              to such requested action, Lead Lenders shall be entitled to either
              repurchase Lenders 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 Lenders represent and warrant to each other that:

    


    (a)  It
      (1)
      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.

    


    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 Loan.

    


    2.4
      Reliance
      on Lead Lenders.
      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.

    



    
      
         

      

      
         

        
          

        

      

      
         

      

    


    2.5 Limitation
      on Lead Lender’s Liability.

    


    (a)  In
      addition to the Lead Lender’s failure to comply with the terms of this
      Agreement, including the Priority of Payment, the Lenders shall have full
      recourse against Lead Lenders for the amounts payable by the terms of this
      agreement. Lead Lenders obligation with respect to such payments shall be to
      remit to the Lenders a monthly payment based on the agreed 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)  Although
      Lead Lenders will exercise the same care in administering the Loan as if the
      Loan were made entirely for Lead Lenders’ own account, Lead Lenders liability
      shall be limited to the Lenders Participation Interest and the amount payable
      on
      that at the Interest Rate, except for a loss due to Lead Lenders’ own gross
      negligence, willful acts or misconduct

    


    (c)  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 Lenders’ receipt of the Lead Lender’s request. Any Lenders’ failure to
      respond within the ten (10) calendar days shall be deemed consent by such Lender
      to such request

    


    (d)  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
      as though it were not acting as the Lead Lender.

    


    SECTION
      3. ADMINISTRATION OF LOAN

    


    3.1
      Administration
      and Servicing of Loan.
      In
      administering and servicing the Loan, Lead Lenders shall act in its own behalf
      as to its 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)  Payment Returns.
      If any
      payment received by Lead Lenders and distributed or credited to the Lenders
      is
      later rescinded or is otherwise required to be returned by Lead Lenders to
      the
      Borrowers for whatever reason (including, without limitation, settlement of
      an
      alleged claim), the Lenders shall be entitled to retain any payment received.
      The covenant contained in this paragraph shall survive the termination of this
      Agreement.

    


    (e)  Records.
      Lead
      Lenders shall maintain such books and records relating to the Loan as it would
      were the Loan made solely by Lead Lenders, which books and records shall be
      made
      available to the Lenders at Lead Lender’s 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.

    


    (f)  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 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.

    


    (g)  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) agree to the revision,
      modification or amendment of any of the Loan Documents, or (4) 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, Lead Lenders shall have
      the right to make decisions in connection with the day-to-day administration
      and
      servicing of the Loan, relating to inspections, review of financial data, and
      other matters of an ordinary nature involved in the administration and servicing
      of the Loan, without the Lenders’ 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 becomes 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 for 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 portion of principal of the Loan provided by Owens Financial
      and
      Owens Mortgage Investment Fund (ii) next to pay any accrued or outstanding
      interest due Lenders at the agreed Interest Rate (iii) next to that portion
      of
      the principal of the Loan provided by Originations, VRM I, VRM II and VF III.
      In
      the event of default under the Loan Documents: (I) Originations, VRM I, VRM
      II
      and VF III agree to purchase the Participation Interest of Owens Financial
      and
      Owens Mortgage Investment Fund for the outstanding balance of that Participation
      Interest plus any accrued interest; and (ii) Originations, VRM I, VRM Il and
      VF
      III shall not be entitled to receive any payment of their Pro Rata Share of
      the
      principal of the Loan in question until Owens Financial and Owens Mortgage
      Investment Fund has received payment of its Participation Interest of the
      principal of the Loan and all accrued interest, late charges, default interest,
      and any other charges payable to Lenders under this Agreement.

    


    (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 Owens
      Financial or Owens Mortgage Investment Fund for such period that the interest
      is
      due.

    


    (c)  As
      an
      example, assume Lenders fund a 64.0% Participation Interest in a $31,250,000.00
      Loan. The Loan carries an interest rate of 12.0% and pays monthly interest
      only
      payments. Lenders and Lead Lenders would receive the following, provided
      however, that any reduction of the principal balance of the Loan through partial
      payoffs shall reduce proportionately the amounts shown in the examples
      below.

    


    Example
      1:
      Borrowers make a monthly payment of $312,500.00. Lenders are paid their full
      share of interest at 11.0% on $20,000,000.00 or $183,333.33. Lead Lenders
      receive $129,166.67
      or
      the
      balance of the interest paid.

    


    Example
      2:
      Borrowers make a monthly payment of $250,000.00. Lenders are paid their full
      share of interest at 11.0% on $20,000,000.00 or $183,333.33. Lead Lenders
      receive $66,666.67, 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 pay to Lenders the full share of
      interest at 11.0% on $20,000,000.00 or $183,333.33. At this point Lead Lender
      may buy Lender out of the loan for $20,000,000.00, plus any accrued
      interest.

    


    Example 4:
      Borrowers payoff a portion of the Loan. Lenders are paid their Pro Rata Share
      of
      the principal balance of the Participation Interest and interest due under
      the
      terms of the Loan to the date of the partial 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 unpaid interest due under the
      terms of the Loan.

    


    3.3
      Defaults
      Under Loan Documents; Enforcement of Remedies.
      If
      foreclosure or similar proceedings are commenced under the Loan Documents,
      Lead
      Lenders shall buy out the Participation Interest of Owens Financial or Owens
      Mortgage Investment Fund at the sole an absolute discretion of
      Lenders.

    


    3.4
      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.

    



    
      
         

      

      
         

        
          

        

      

      
         

      

    


    SECTION
      4. RESIGNATION OR REMOVAL OF LEAD LENDER

    


    Lead
      Lenders will repurchase the Participation Interests of Lenders at Lenders sole
      and absolute discretion at any time “for cause”. The term “for cause” shall be
      limited to Lead Lenders’ (i) material breach of the terms of this Agreement, or
      (ii) fraud committed against Borrowers or Lenders, or (iii) criminal acts
      committed against Borrowers or Lenders. Upon any such removal, the Lenders
      shall
      have the right to appoint a successor Lead Lender.

    


    SECTION
      5. TERMINATION OF AGREEMENT

    


    Upon
      final payment in full of the Loan 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
      6. INDEMNIFICATION OF LENDER

    


    Originations,
      Vestin, VRM I, VRM II and VF III indemnifies Owens Financial and Owens Mortgage
      Investment Fund for all 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
      them
      in any way relating to or arising out of this Agreement or by their
      participation in any Loan or by any action brought by any Borrower including
      all
      claims relating to the origination of the Loans, except for the gross negligence
      or willful misconduct of Lenders or the breach by Lenders of the terms of this
      Agreement.

    


    SECTION
      7. 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 lender, and
      Lender, as borrower. 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
      8. 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 by all parties
      hereto.

    


    8.2
      Heading.
      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
      Further Sale,
      Pledge, etc.
      Lead
      Lender may not sell, pledge, assign or otherwise transfer all or any part of
      its
      interest in any Loan without the prior written consent of Lenders, which consent
      shall not be unreasonably withheld. In the event all or any part of Lead Lenders
      interest in any Loan is sold, pledged, assigned or otherwise transferred, Lead
      Lenders obligations under this Agreement will not be relieved.

    


    8.6
      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 by serving
      notice as provided above.

    


    8.7
      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

    


    8.8
      Attorney’s
      Clause.
      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 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.

    


    8.9
      Loan
      Fees, Extension Fees, Late Charges. Default Interest, Etc.
      At the
      close of escrow, Lead Lender and/or Lead Lenders shall pay to Owens Financial,
      a
      loan fee of $400,000.00 (2.0% of the face amount of the Note). In addition,
      if
      Lender and/or Lenders have not been paid in full by December 31, 2006, then
      Lead
      Lender and/or Lead Lenders shall pay to Owens Financial an additional loan
      fee
      equal to 1% of the outstanding principal balance of Lender’s/Lenders’
Participation Interest in the Joan. Furthermore, Owens Mortgage Investment
      Fund
      and/or Owens Financial Group shall be entitled to their pro rate share of any
      extension fees, late charges, interest on advances, default interest, etc.
      collected by Lead Lender and/or Lead Lenders under the terms of the
      Note.

    


    (END
      OF
      TEXT, CONTINUED ON NEXT PAGE]

    



    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


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

    


    
      	
              VESTIN
                ORIGINATIONS, INC.,

            	 	
              VESTIN
                MORTGAGE, INC.,

            
	
              a
                Nevada corporation

            	 	
              a
                Nevada corporation

            
	
              By:

            	 	 	
              By:

            	 
	 	
              Michael
                V. Shustek

            	 	 	
              Michael
                V. Shustek

            
	 	
              President

            	 	 	
              President

            
	 	 	 	 	 
	
              VESTIN
                FUND I, LLC

            	 	
              VESTIN
                FUND II, LLC

            
	
              a
                Nevada corporation

            	 	
              a
                Nevada corporation

            
	
              By:

            	
              Vestin
                Mortgage, Inc.,

            	 	
              By:

            	
              Vestin
                Mortgage, Inc.,

            
	 	
              a
                Nevada corporation, Manager

            	 	 	
              a
                Nevada corporation, Manager

            
	 	 	 	 	 
	
              By:

            	 	 	
              By:

            	 
	 	
              Michael
                V. Shustek

            	 	 	
              Michael
                V. Shustek

            
	 	
              President

            	 	 	
              President

            
	 	 	 	 	 
	 	 	 	 	 
	
              OWENS
                FINANCIAL GROUP, INC.,

            	 	 	 
	
              a
                California corporation

            	 	 	 
	 	 	 	 	 
	
              By:

            	 	 	 	 
	 	
              William
                E. Dutra

            	 	 	 
	 	
              Senior
                Vice President

            	 	 	 
	 	 	 	 	 
	
              OWENS
                MORTGAGE INVESTMENTS FUND,

            	 	 	 
	
              a
                California Limited Partnership

            	 	 	 
	 	 	 	 	 
	
              By:

            	
              Owens
                Financial Group, Inc.

            	 	 	 
	 	
              William
                E. Dutra, 

            	 	 	 
	 	
              Senior
                Vice President

            	 	 	 
	 	 	 	 	 
	
              By:

            	 	 	 	 
	 	
              William
                E. Dutra,

            	 	 	 
	 	
              Senior
                Vice President