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EXHIBIT 10.4
INTERCREDITOR AGREEMENT
This
Intercreditor Agreement, dated as of June 24, 2004 this
"AGREEMENT"),
is entered into by and between VESTIN
MORTGAGE, INC., a Nevada corporation
("VESTIN MORTGAGE"), whose principal place
of business and post office address
is 2901 El Camino Avenue, Suite 206, Las
Vegas, Nevada 89102, ("LEAD LENDER")
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, ("LENDER")
hereinafter collectively referred to as the
"LENDERS".
RECITALS:
A. The Lenders have
concurrently herewith entered into that certain Loan
Agreement, dated as of June 14, 2004 (the "Loan Agreement")
with
STADIUM VILLAGE, LLC, a Nevada limited liability company (the
"Borrower") and Jeffrey B. Chain & Linda D. Chain, Kerry L.
Keltner &
Linda K. Keltner, (collectively "the Guarantors").
B. The Lenders have severally
agreed to make the Loan to the Borrowers in
the aggregate principal amount of $12,063,000.00 of which each
Lender's commitment is set forth in Section 2.1 of this
Agreement.
C. The Lenders enter into this
Agreement to, among other things, further
define the rights, duties, authority and responsibilities of
the
Lenders and the relationship among the Lenders regarding their
interests in the Loan Documents and collateral which secures 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,
Vestin Mortgage and Lender 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 Intercreditor Agreement as amended, modified or
restated in
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accordance with the terms hereof.
"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 eleven
percent (11%) per annum to be paid to
Lender in accordance with this Agreement
for their "Participation Interest" in the
"Loan" assigned by Vestin Mortgage.
"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"
shall mean Vestin Mortgage or any successor lead lender.
"Lender" shall
mean Owens Mortgage Investment Fund or their assignee.
"Loan Documents"
shall mean the note, deed of trust, guaranty, title
policy, security agreement, loan agreement,
assignment of rents and profits, and
whatever documents are in existence to
protect and secure the repayment of the
Borrowers 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".
"Loan Agreement"
shall have the meaning assigned thereto in the Recitals
hereof, and shall include such agreements
as amended or modified in accordance
with their respective rights.
"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 owned by Owens
Mortgage
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Investment Fund in the "Loan".
1.2
Effectiveness of the Agreement. The effectiveness of this Agreement
is
conditioned upon (a) the execution and
delivery of this Agreement by the
Lenders, (b) the execution, delivery and
effectiveness of the Loan Agreement and
the Loan Documents by the parties
hereto.
SECTION 2. PRORATA SHARE; LOAN FEES
2.1 Advance of
Loan Funds: Pro Rata Share. Each of the Leaders shall
advance their respective amounts of the
Loan to the Borrower at Closing, and
have a "Pro Rate Share" as indicated on the
following schedule:
<TABLE>
<CAPTION>
LENDER
AMOUNT
PRO RATA SHARE
------
------
--------------
<S>
<C>
<C>
Vestin Mortgage Inc,
$ 6,063,000.00
50.26%
Owens Mortgage Investment Fund
$ 6,000,000.00
49.74%
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-------
Totals
$12,063,000.00
100.00%
</TABLE>
2.2 Allocation
of Loan Fees. In respect of the Loan, the Borrower has paid
or will pay loan fees in the aggregate
amount of $422,205.00 (3.5% of the face
amount of the note), which fees shall be
allocated among the Lenders as follows:
Owens Mortgage
Investment Fund
$150,000.00 (2.5% based on the
Participation Interest)
Vestin Mortgage,
Inc.
$272,205.00 (remaining balance of loan fee)
SECTION 3. RELATIONSHIP AMONG LENDERS
3.1 Restrictions
on Actions. Lead Lender agrees that, so long as any
portion of the Loan is outstanding or
unpaid the provisions of this Agreement
shall provide the exclusive method by which
either Lender may exercise rights
and remedies under the Loan Documents.
Therefore, each Lender shall, for the
benefit of all Lenders, except as permitted
under this Agreement:
(a) Refrain from 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; and
(b) Refrain from (1) selling any portion of the Loan to the
Borrower
or any affiliate of the Borrower and (2)
accepting any guaranty (other than the
guarantees contemplated by the Loan
Agreement) of; or any other security for,
the Loan from the Borrowers or any
Affiliate of the Borrowers, except any
guaranty or security granted to the Lenders
for the benefit of all Lenders; and
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(c) Refrain from exercising any rights or remedies under the
Loan
Documents which have or may have arisen or
which may arise as a result of a
Default or Event of Default or otherwise
provided, however, that nothing
contained in subsections (a) though (c)
above, shall prevent any Leader from
imposing a default rate of interest in
accordance with the Loan Agreement, or
prevent a Lender from raising any defenses
in any action in which it has been
made a party defendant or has been joined
as a third party, except that Lead
Lender may, but shall not be obligated to,
direct and control any defense
directly relating to the Real Property
and/or the Collateral or any one or more
of the Loan Documents, which shall be
governed by the provisions of this
Agreement.
3.2
Representations and Warranties. Each of the Lenders represent
and
warrant to each other that:
(a) It (i) is a legal entity duly organized, existing and in
good
standing under the laws 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 Lender
or
Lender 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
Lender or Lender.
(c) The execution, delivery and performance by such Lead Lender
or
Lender of this Agreement will result in a
valid and legally binding obligation
of such Lead Lender or Lender 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 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.
3.3 Cooperation;
Accountings. Lead Lender will, upon the reasonable request
of Lender, 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 Lender agrees to provide
to Lender upon reasonable request, but in
no event more frequently than once a
month, a statement of all payments received
in respect of the Loan.
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3.4 Reliance on
Lead Lender. Lender agrees that it has independently made
its own analysis of the Loan and the
decision to enter into this Agreement based
on such documents and information as it has
deemed appropriate. The Lead Lender
shall promptly provide to Lender a copy of
all financial statements and reports
of operating results and other documents
and information received by the Lead
Lender in its capacity as such pursuant to
the Loan Documents. The Lead Lender
shall have a duty and responsibility to
provide Lender with any credit or other
information concerning the affairs,
financial condition or business of the
Borrower which may come into the possession
of the Lead Lender, including
financial statements, credit reports and
any other documents and information
upon the reasonable request of Lender.
3.5 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 Lender shall have
recourse against Lead Lender for the
amounts payable by the terms of this
Agreement. Lead Lender's obligation with
respect to such payments shall be to
remit to the Lender 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) Although Lead Lender will exercise the same care in
administering
the Loan as if the Loan were made entirely
for Lead Lender's own account, Lead
Lender's liability shall be limited to
Lenders Participation Interest and the
amount payable on that at the Interest
Rate, except for a loss due to Lead
Lender's own gross negligence, willful acts
of willful misconduct.
(c) Lead Lender 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 Lender. Should approval of any
action, any inaction or any proposed course
of conduct in administering the Loan
(either before or after the occurrence of a
Default) be requested in writing by
the Lead Lender from Lender, such Lender
shall approve or deny such request in
writing and shall deliver the writing to
the Lead Lender within ten (10)
calendar days after the Lender's receipt of
the Lead Lender's request. Lender's
failure to respond within the ten (10)
calender days shall be deemed consent by
such Lender to such request.
(d)
Lead Lender does not
assume and shall have no responsibility or
liability, express or implied, for (i) the
collectability of the Loan made to
Borrower under, or the enforceability of
any of the Loan Documents, or (ii) the
financial condition or creditworthiness of
the Borrower, or (iii) any credit or
other information furnished by the
Borro
