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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 c
