INTERCREDITOR AGREEMENT

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EXHIBIT 10.4

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 co