ASSIGNMENT AGREEMENT

 

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                                                                    EXHIBIT 10.1

 

                              ASSIGNMENT AGREEMENT

 

     This ASSIGNMENT AGREEMENT (the "Agreement") is entered into as of January

23, 2004, by and among 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"), the principal place of business and post office address of which are

2901 El Camino Avenue, Suite 206, Las Vegas, Nevada 89102 (collectively

sometimes referred to herein as the "Assignors"), on the one hand, and OWENS

FINANCIAL GROUP, INC., a California corporation ("Owens Financial") and OWENS

MORTGAGE INVESTMENT FUND, a California limited partnership ("Owens Mortgage

Investment Fund") the principal place of business and post office address of

which are 2221 Olympic Boulevard, Walnut Creek, California 94595 (collectively

sometimes referred to herein as the "Assignees"), on the other hand, with

reference to the following:

 

                                    RECITALS

 

     A.   Vestin Fund I is a direct participation program registered with the

Securities and Exchange Commission ("SEC") that provides financing secured by

deeds of trust or mortgages on real property. Vestin Fund I owns loans in the

approximate principal amount of One Hundred Million Dollars ($100,000,000.00).

 

     B.   Vestin Fund II is an SEC-registered direct participation program that

provides financing secured by deeds of trust or mortgages on real property.

Vestin Fund II owns loans in the approximate principal amount of Four Hundred

Million Dollars ($400,000,000.00).

 

     C.   Vestin Mortgage is the manager of Vestin Fund I and Vestin Fund II.

 

     D.   Owens Mortgage Investment Fund is an SEC-registered public partnership

that provides financing and owns notes secured by deeds of trust and mortgages

on real property.

 

     E.   Owens Financial is the general partner of Owens Mortgage Investment

Fund.

 

     F.   Each of the Assignors desires to assign to the Assignees all of that

Assignor's rights and obligations with respect to those certain loans set forth

on Exhibit "A" hereto (the "Participation Pool") to the extent of the

Assignees' Participation Interest (as hereinafter defined), all upon the terms

and subject to the conditions set forth herein, and each of the Assignees

wishes to acquire and accept the assignment of such rights and to assume such

obligations from the Assignors on such terms and subject to such conditions.

 

                                   AGREEMENT

 

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants

contained herein and for other good and valuable consideration, the receipt of

which is hereby acknowledged, the parties hereto agree as follows:

 

     1.   Definitions:   Each of the capitalized terms used in this Agreement

shall have the respective meaning accorded to it in this Section 1:

 

     "Agreement" shall mean this Assignment Agreement as amended, modified or

restated in accordance with the terms hereof.

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     "Assignees' Participation Interest" shall mean the Assignees' interest in

the Loans included in the Participation Pool and the corresponding Loan

Documents, expressed in terms of dollars or a percentage (as the case may be).

 

     "Assignors' Participation Interest" shall mean the Assignors' interest in

the Loans included in the Participation Pool and the corresponding Loan

Documents, expressed in terms of dollars or a percentage (as the case may be).

 

     "Assignment" shall mean the actual recorded assignment of a specific

Participation Interest in a Loan.

 

     "Bankruptcy Proceeding" shall mean, with respect to any person or entity

("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 included in the Participation Pool.

 

     "Collateral" shall mean, as to all of the Loans in the Participation Pool,

all of the real and personal property security that is pledged as 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, constitute an

event of default pursuant to the Loan Documents relating to any Loan in the

Participation Pool.

 

     "Interest Rate" shall mean the rate of interest to be paid to the

Assignees with respect to the Loans in the Participation Pool. This rate shall

be a fixed rate for the portion of the term of each Loan while it has been

assigned to the Assignees and shall be set forth at the time of the Assignment

in a side letter between the Assignors and the Assignees.

 

     "Late Charges" shall mean the late charges and or default rate charged to

Borrowers in the event of late payments or a Default under the Loan Documents.

 

     "Loan Documents" shall mean all of the various notes, deeds of trusts,

guarantees, title polices, security agreements, loan agreements, assignment of

rents and profits and other documents and instruments evidencing a Loan

included in the Participation Pool.

 

     "Loan" shall mean the indebtedness of each of the Borrowers owed to any of

the Assignors.

 

     "Priority of Payment" shall mean the order in which payments are to be

made hereunder to the Assignors and to the Assignees.

 

     "Participation Pool" shall mean those Loans more fully identified and

described on Exhibit "A" attached hereto in which the Assignees shall acquire

an interest hereunder in a principal amount of up to Twenty-Million Dollars

($20,000,000.00).

 

 

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         "Substitution of Security" shall mean the exchange of one Loan in the

Participation Pool for a different Loan having an equal principal amount.

 

         2.       ASSIGNMENT AND ASSUMPTION.

 

                  2.1      ASSIGNMENT. Subject to the terms and conditions of

this Agreement, as of the Effective Date each of the Assignors hereby jointly

and severally sells, transfers and assigns to the Assignees, without

representation or warranty (except as expressly provided in this Agreement),

and the Assignees hereby purchase, assume and undertake from the Assignors: (i)

that portion of the Assignors' rights and obligations under the Loan Documents

for all of the Loans in the Participation Pool, in the amount of the Assignees'

Participation Interest as more fully set forth on Exhibit "B" to this

Agreement; and (ii) all related rights, benefits, obligations, liabilities and

indemnities of the Assignors under the Loan Documents for all of the Loans in

the Participation Pool to the extent of the Assignees' Participation Interest

therein.

 

                  2.2      ASSUMPTION. As of the Effective Date, the Assignees

shall succeed to all of the rights and assume all of the obligations of the

Assignors under the Loan Documents for all of the Loans in the Participation

Pool, but only to the extent of the Assignees' Participation Interest. Each of

the Assignees agrees that it will perform, in accordance with the terms of the

Loan Documents for all of the Loans in the Participation Pool, all of the

obligations that are required to be performed by it as a lender thereunder. It

is the intent of the parties hereto that, as of the Effective Date, the

Assignors shall relinquish all of their rights and be released from all of

their obligations under the Loan Documents for all of the Loans in the

Participation Pool to the extent that such rights have been assigned to, and

such obligations have been assumed by, the Assignees pursuant to the terms

hereof.

 

                  2.3      PARTICIPATIONS INTERESTS. After giving effect to the

assignment and assumption set forth herein, on the Effective Date, the

respective Participation Interests of the Assignors and the Assignees in all of

the Loans in the Participation Pool shall be as set forth on Exhibit "B" hereto.

 

         3.       PAYMENT BY THE ASSIGNEES. At or before 3:00 p.m., Pacific

Time, on the Effective Date, the Assignees shall pay to Vestin Mortgage, for

the benefit of all Assignors, in immediately available funds, the following

amount, for the Assignees' Participation Interest in the Loans in the

Participation Pool, pursuant in the following payment instructions:

 

         Wire to:

         Vestin Fund II, LLC, Investment Account

         Account #153790381963

         at US Bank ABA #121201694

 

         4.       REALLOCATION OF PAYMENTS. Any interest, fees and other

payments payable to the Assignors with respect to the Loans in the

Participation Pool that have accrued up to the Effective Date with respect to

the Assignees' Participation Interest shall be for the account of the

respective Assignors. Any such interest, fees and other payments accrued on and

after the Effective Date with respect to the Assignees' Participation Interest

shall be for the account of the Assignees. Each of the Assignors and the

Assignees agrees that it will hold in trust for the other parties any interest,

fees and other amounts which it may receive to which the other parties is

entitled pursuant to the preceding sentence and pay to that other party any

such amounts which it may receive promptly upon receipt thereof; provided, that

all payments for the account of any Assignor shall be paid to Vestin Mortgage,

for the benefit of the respective Assignor, and all payments for the account of

either Assignee shall be paid to Owens Financial, for the benefit of the

respective Assignee.

 

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     5. INDEPENDENT CREDIT DECISION: APPOINTMENT OF AGENT.

 

          5.1    INDEPENDENT CREDIT DECISION. Each of the Assignees: (i)

acknowledges that it has received a copy of each and every one of the Loan

Documents, as well as such other documents and information as it has deemed

appropriate in order to make its own credit and legal analysis and decision to

enter into this Agreement; and (ii) agrees that it will, independently and

without reliance upon the Assignors and based on such documents and information

as it shall deem appropriate at the time, continue to make its own credit and

legal analyses and decisions in taking or not taking action under the Loan

Documents.

 

          5.2    APPOINTMENT OF AGENT. Each of the Assignees hereby appoints and

authorizes Vestin Mortgage to act as the Assignee's agent on its behalf and to

exercise such powers under the terms of the Loan Documents as the respective

Assignor as lender is authorized to exercise by the terms thereof, together with

such other powers as are reasonably incidental thereto. Notwithstanding the

foregoing, Vestin Mortgage agrees that, so long as any portion of a Loan is

outstanding or unpaid, it shall, for the benefit of each of the Assignees:

 

                 (i)     notify Owens Financial, on behalf of the Assignees, by

telephone and in writing, before taking or filing any action, judicial or

otherwise, to enforce any rights or pursue any remedy under any of the Loan

Documents; and

 

                 (ii)    refrain from selling any Loan in the Participation

Pool, or accepting any substitute guaranty, substitute collateral, or any other

security for any Loan in the Participation Pool, without the consent of the

Assignees; provided, that in the event that the Assignees refuse to consent to

such requested action, Vestin Mortgage may either repurchase the Assignees'

Participation Interest relating to the Loan in question for the amount of

principal and accrued interest outstanding thereunder or provide the Assignees

a Substitution of Security acceptable to Assignees, in their sole discretion.

 

     6.  EFFECTIVE DATE. The effective date for this Agreement (the "Effective

Date") shall be the date set forth as such on Exhibit "B" hereto. On or before

the Effective Date, each and every one of the following conditions precedent

shall have been satisfied in full or shall have been waived by the party or

parties for whose benefit the condition was to be satisfied:

 

                 (i)     this Agreement shall have been executed by all of the

Assignors and the Assignees and delivered to each;

 

                 (ii)    the representations and warranties of each of the

Assignors and the Assignees contained in this Agreement shall be true and

correct on the Effective Date as if made thereon; and

 

                 (iii)   each of the Assignors and the Assignees shall have paid

all sums required to be paid by it, whether pursuant to Sections 3 and 4 hereof

or otherwise.

 

     7.  REPRESENTATIONS AND WARRANTIES.

 

          7.1     REPRESENTATIONS OF THE ASSIGNORS. Each of the Assignors

represents and warrants to the Assignees that: (i) it is the legal and

beneficial owner of the interests being assigned by it hereunder and that such

interests are free and clear of any adverse claim or lien other than those

which it has already disclosed to the Assignees in writing; (ii) it is duly

organized and validly existing under the laws of the jurisdiction in which it

was organized and is duly qualified to do business in each jurisdiction in

which it engages in business, and it has the full power and authority

 

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to take, and has taken, all action necessary to execute and deliver this

Agreement and any other documents required or permitted to be executed or

delivered by it in connection with this Agreement and to fulfill its

obligations hereunder; (iii) no notices to, or consents, authorizations or

approvals of, any person are required (other than any already given or

obtained) for its due execution, delivery and performance of this Agreement

and, no further action taken by, notice to or filing with any person is

required of it for such execution, delivery or performance; (iv) this Agreement

has been duly executed and delivered by it and constitutes the legal, valid and

binding obligation of that Assignor, enforceable against that Assignor in

accordance with the terms hereof, subject (as to enforcement) to bankruptcy,

insolvency, moratorium, reorganization and other laws of general application

relating to or affecting creditors rights and to general equitable principles;

(v) there exists no Default under any of the Loan Documents; and (vi) it holds

all licenses that are required, and has complied with all laws and regulations

with which it must comply, in order for it lawfully to engage in the businesses

in which it is currently engaged.

 

                 7.2  Representations of the Assignees.  Each of the Assignees

represents and warrants to the Assignors that: (i) it is duly organized and

validly existing under the laws of the jurisdiction in which it was organized

and is duly qualified to do business in each jurisdiction in which it engages in

business, and it has full power and authority to take, and has taken, all

actions necessary to execute and deliver this Agreement and any other documents

required or permitted to be executed or delivered by it in connection with this

Agreement to fulfill its obligations hereunder; (ii) no notices to, or consents,

authorizations or approvals of, any person are required (other than any already

given or obtained) for its due execution, delivery and performance of this

Agreement and no further action by, notice to or filing with any person is

required of it for such execution, delivery or performance; and (iii) this

Agreement has been duly executed and delivered by it and constitutes the legal,

valid and binding obligation of that Assignee, enforceable against that Assignee

in accordance with the terms hereof, subject (as to enforcement) to bankruptcy,

insolvency, moratorium, reorganization and other