8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 6, 2004

OWENS MORTGAGE INVESTMENT FUND,
a California Limited Partnership

(Exact name of registrant as specified in its charter)

California 000-17248 68-0023931

(State or other jurisdiction
     of incorporation) (Commission
 File Number)   (IRS Employer
Identification No.)

   2221 Olympic Boulevard
   Walnut Creek, California 94595     

   (Address of principal executive offices) (Zip Code)     

Registrant’s telephone number, including area code: (925) 935-3840

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Item 1.01 Entry into a Material Definitive Agreement
Item 9.01 Financial Statements and Exhibits
Signatures
Exhibit 10.1 Assignment Agreement and Release
Exhibit 10.2 Amended and Restated Purchase Agreement

Section 1 – Registrant’s Business and Operations

Item 1.01 Entry into a Material Definitive Agreement

                                     On September 27, 2004, Owens Mortgage Investment Fund, a California Limited Partnership (the “Partnership”), Vestin Fund I, LLC and Vestin Fund II, LLC (collectively, the “Sellers”), signed an Assignment Agreement and Release (the “Assignment”) with MGI, LLC (the “Assignor”) and Station Casinos, Inc. (the “Assignee”). In addition, on September 27, 2004, the Sellers signed an Amended and Restated Purchase Agreement (the “Amended Agreement”) with Station Casinos, Inc. or its assigns (the “Buyer”). By their terms, these two agreements were not to become effective until the closing of the specified transactions through escrow on October 1, 2004.

                                     The Sellers were the co-owners of real property and improvements formerly known as the Castaways Hotel, Casino and Bowling Center located in Las Vegas, Nevada (the “Property”). The Sellers obtained joint interests in the Property in February 2004 upon foreclosure of the deed of trust on the Property in the total amount of $22,200,000. The Partnership participates in ownership of deeds of trust with Vestin Fund I, LLC and Vestin Fund II, LLC, but is otherwise unrelated to these entities. The Partnership is unrelated to the Buyer/Assignee and the Assignor.

                                     On June 4, 2004, the Sellers had entered into a Purchase Agreement with the Assignor, whereby the Assignor would purchase the Property from the Sellers at a price of $21,600,000 secured by a note for the full purchase price. The note was to bear interest at 8% per annum payable monthly and be due in two years. The Assignment (Exhibit 10.1) signed on September 27, 2004 assigned the right, title and interest in the Purchase Agreement from the Assignor to the Assignee for a price of $11,982,972 in cash or immediately available funds. The Assignment was executed concurrently with the Amended Agreement on September 27, 2004.

                                     The Amended Agreement (Exhibit 10.2) replaced the Purchase Agreement and provided that the Buyer would purchase the Property for $21,767,028 from the Sellers. Although it was signed on September 27, 2004, both it and the Assignment provided that they did not become effective until the close of escrow on October 1, 2004.

                                     On October 1, 2004, escrows for the related transactions were closed and the Assignment and Amended Agreement were made effective. The Partnership received approximately $13,239,000 as its portion of the net sales proceeds (62.5%), which resulted in a book loss to the Partnership of approximately $83,000.

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits

(c) Exhibits

10.1 Assignment Agreement and Release

10.2 Amended and Restated Purchase Agreement

SIGNATURES

                                     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: October 6, 2004 OWENS MORTGAGE INVESTMENT FUND,
a California Limited Partnership

By: Owens Financial Group, Inc., General Partner


By: /s/ William C. Owens
       William C. Owens, President

EX-10

EXHIBIT 10.1

ASSIGNMENT AGREEMENT AND RELEASE

                                     THIS ASSIGNMENT AGREEMENT AND RELEASE (this “Assignment”) is entered into this 27th day of September, 2004, by and among MGI, LLC, a Nevada limited liability company (the “Assignor”), STATION CASINOS, INC., a Nevada corporation (the “Assignee”), and VESTIN FUND I, LLC, a Nevada limited liability company, VESTIN FUND II, LLC, a Nevada limited liability company and OWENS INVESTMENT MORTGAGE FUND, a California limited partnership (collectively, the “Sellers”).

                                     WHEREAS, the Assignor and the Sellers are parties to a Purchase Agreement dated as of June 4, 2004 (the “Purchase Agreement”), pursuant to which the Assignor agreed to purchase from Sellers the real property and improvements formerly known as the Castaways Hotel, Casino and Bowling Center located in Las Vegas, Nevada (collectively, the “Property”); and

                                     WHEREAS, the Assignor desires to assign the Purchase Agreement to the Assignee subject to the terms and conditions contained in this Assignment and the Purchase Agreement.

                                     NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and for other good and valuable consideration, the parties hereto agree as follows:

                                     1.           Assignment of Purchase Agreement. Effective as of the Closing (as defined below), the Assignor hereby assigns and transfers to the Assignee all of the Assignor’s right, title and interest in the Purchase Agreement subject to the terms and conditions contained in this Assignment and the Purchase Agreement. Effective as of the Closing, the Assignee hereby accepts such assignment and agrees to perform the obligations set forth in this Assignment and the Purchase Agreement.

                                     2.           Payment to the Assignor. In consideration for the Assignor assigning and transferring to the Assignee all of the Assignee’s right, title and interest in the Purchase Agreement, the Assignee shall pay the Assignor, at the Closing, the sum of Eleven Million Nine Hundred Eighty-Two Thousand Nine Hundred Seventy-Two Dollars ($11,982,972) in cash or other immediately available funds.

                                     3.           Consent to Assignment. Effective upon the later to occur of (a) the Assignee depositing funds with the Escrow Agent (as defined in the Purchase Agreement) sufficient to close the transactions contemplated by this Assignment and the Amended and Restated Purchase Agreement (as defined below) and (b) the Assignee delivering an instruction letter to the Escrow Agent directing her not to deliver the funds necessary to close the transactions contemplated by this Assignment until the Escrow Agent is also in possession of, and prepared to deliver, the funds necessary to close the transactions contemplated by the Amended and Restated Purchase Agreement, the Sellers hereby consent to the assignment of the Purchase Agreement from the Assignor to the Assignee on the terms and conditions contained herein.

                                     4.           Amended and Restated Purchase Agreement. Concurrently with the execution of this Assignment, the Assignee and the Sellers shall enter into an Amended Purchase and Sale Agreement in the form of Exhibit “A”attached hereto (the “Amended and Restated Purchase Agreement”); provided, however, that the Amended and Restated Purchase Agreement shall not become effective until and until the Closing occurs.

                                     5.           Closing. The closing of the transactions contemplated by this Assignment (the “Closing”) shall take place at the executive offices of the Assignee in Las Vegas, Nevada at 10:00 a.m. (Las Vegas time) on October 1, 2004, or at such other place as the parties hereto may mutually determine. The parties hereto acknowledge and agree that the Closing hereunder shall take place immediately prior to the closing of the transactions contemplated by the Amended and Restated Purchase Agreement.

                                     6.           Release of Claims.

(a) Effective as of the Closing, the Sellers hereby forever release and discharge the Assignor and its past and present subsidiary corporations, parent corporations, affiliates, partners, joint venturers, successors, assigns, contractors, subcontractors, officers, directors, shareholders, employees, agents, attorneys, successors and assigns from, and covenant not to sue or proceed against any of the foregoing on the basis of, any and all claims, demands, losses, damages, actions, causes of action, suits, debts, promises, liabilities, obligations, liens, costs, expenses, attorneys’ fees, indemnities, or duties, of any nature, character or description whatsoever, whether known or unknown, fixed or contingent, accrued or not yet accrued, matured or not yet matured, anticipated or unanticipated, asserted or unasserted, arising from, or relating to, directly or indirectly, the Purchase Agreement or the transactions contemplated thereby.

(b) Effective as of the Closing, the Assignor hereby forever releases and discharges the Sellers and each of their respective past and present subsidiary corporations, partner corporations, affiliates, members, partners, joint venturers, successors, assigns, contractors, subcontractors, officers, directors, shareholders, employees, agents, attorneys, successors and assigns from, and covenants not to sue or proceed against any of the foregoing on the basis of, any and all claims, demands, losses, damages, actions, causes of action, suits, debts, promises, liabilities, obligations, liens, costs, expenses, attorneys’ fees, indemnities, or duties, or any nature, character or description whatsoever, whether known or unknown, fixed or contingent, accrued or not yet accrued, matured or not yet matured, anticipated or unanticipated, asserted or unasserted, arising from, or relating to, directory or indirectly, the Purchase Agreement or the transactions contemplated thereby.

                                     7.           Due Diligence Period; Standstill Period.

(a) The parties acknowledge and agree that the Assignee shall have until 5:00 p.m. (Las Vegas time) on September 30, 2004 (the “Limited Due Diligence Period”) to approve or disapprove of the condition of the Property as reflected in the preliminary title report, ALTA survey and Phase I environment report provided by the Assignor to the Assignee on September 24, 2004 (collectively, the “Existing Reports”). The Assignor acknowledges that (i) the Assignee will be obtaining new or updated versions of the Existing Reports (the “Updated Reports”) during the Limited Due Diligence Period, and (ii) the Assignee will have the right to disapprove of the condition of the Property and terminate this Assignment as provided in the following sentence if, and only if, any of the Updated Reports reveal a material change in the condition of the Property from that reflected in the Existing Reports. If the Assignee notifies the other parties hereto prior to the expiration of the Limited Due Diligence Period that the Assignee disapproves of the condition of the Property in accordance with the terms of the preceding sentence, then (A) this Agreement shall automatically be deemed void and of no force or effect, (B) none of the parties shall have any liability or obligations to the other parties hereunder, and (C) the Assignor and the Sellers hereto shall be returned to their original status under the Purchase Agreement as of the date of this Assignment.

(b) In anticipation of the substantial expenditure of time, effort and expense to be undertaken by the Assignee upon the mutual execution of this Assignment, the Assignor covenants and agrees that it will not, at anytime during the Limited Due Diligence Period (i) sell, assign or otherwise transfer any or all of its right, title and interest under the Purchase Agreement, except pursuant to this Assignment, or (ii) enter into any agreement, understanding, negotiations or discussions to do any of the foregoing, except pursuant to this Assignment.

                                     8.           Representations and Warranties.

(a) The Assignor hereby represents and warrants to the Assignee that (i) the Purchase Agreement is in full force and effect and constitutes a legal, valid and binding agreement enforceable in accordance with its terms, of each party thereto, (ii) the Assignor is not in violation or breach of the Purchase Agreement, (iii) to the knowledge of the Assignor, the Sellers are not in violation or breach of the Purchase Agreement, and (iv) the Assignor has not, directly or indirectly, incurred any liabilities with regard to the Property or the Assets (as defined in the Amended and Restated Purchase Agreement). The Assignor covenants and agrees to indemnify, defend and hold harmless the Assignee, the Property and the Assets from and against all liabilities (whether known or unknown) losses, damages, costs and expenses (including reasonable attorneys’ fees) arising out of or relating to any breach by the Assignor of any of the representations and warranties contained in the preceding sentence.

(b) The Sellers hereby represent and warrants to the Assignee that (i) the Purchase Agreement is in full force and effect and constitutes a legal, valid and binding agreement enforceable in accordance with its laws, of each party thereto and (ii) the Sellers are not in violation or breach of the Purchase Agreement, and (iii) to the knowledge of the Sellers, the Assignee is not in violation or breach of the Purchase Agreement.

                                     9.           Further Assurances. The parties to this Assignment each agree to execute, acknowledge and deliver, as appropriate, any and all such other and additional instruments, notices, and other documents and to perform such other acts as may be reasonably necessary more fully to assure the other, its successors and assigns, all of the rights and interests hereby conveyed or intended so to be.

                                     10.           Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, mailed or sent by certified or registered mail (return receipt requested), sent via facsimile or sent by a nationally recognized overnight courier service (providing proof of delivery) to the parties at the following addresses (or at such other address for a party as may be given by like notice):

If to the Assignor, to: MGI, LLC
4730 N. Jensen Road
Las Vegas, Nevada 89129
Attention: Randy Miller
Facsimile: (702) 395-1216

With a copy to: Lionel Sawyer & Collins
300 South Fourth Street, Suite 1700
Las Vegas Nevada 89101
Attention: Mark H. Goldstein, Esq.
Facsimile: (702) 383-8845

If to the Assignee, to: Station Casinos, Inc.
2411 W. Sahara Avenue
Las Vegas, Nevada 89102
Attention: Richard J. Haskins, Esq.
Facsimile: (702) 221-6613

If to the Sellers, to: Vestin Mortgage, Inc.
8379 W. Sunset Road
Las Vegas, Nevada 89113
Attention Paul R. Connaghan, Esq.
Facsimile: (702) 921-6839

                                     11.           Entire Agreement. This Agreement, including the exhibit hereto, contains the entire agreement among the parties concerning the subject matter hereof and supersedes all prior agreements, understandings, discussions, negotiations and undertakings, whether written or oral, express or implied, among the parties with respect hereto. No representations, inducements, promises or agreements not embodied in this Assignment or in the Amended and Restated Purchase Agreement shall be of any force or effect.

                                     12.           Assignability. None of the parties shall have the right to assign any rights or obligations under this Agreement without the prior written approval of the other parties hereto.

                                     13.           Amendment or Waiver. No provision in this Agreement may be amended or waived unless such amendment or waiver is agreed to in writing, signed by all of the Parties hereto. No waiver by one party of any breach by any other party of any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of a similar or dissimilar condition or provision at the same or any prior or subsequent time.

                                     14.           Severability. In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, in whole or in part, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law.

                                     15.           Construction. The parties hereto agree that this Agreement is the product of negotiations among sophisticated parties, all of whom were represented by counsel, and each of whom had an opportunity to participate in and did participate in, the drafting of each provision hereof. Accordingly, this Agreement shall be construed as if all of the parties hereto prepared this Agreement, and any rules of construction to the contrary are hereby waived.

                                     16.           Specific Performance. The parties hereto agree that irreparable damage would occur in the event any of the provisions of this Assignment were not to be performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof in addition to any other remedies at law or in equity.

                                     17.           Governing Law. This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Nevada without reference to the principles of conflict of laws thereof. All of the parties hereto mutually and irrevocably consent to, and waive any objection to, the exclusive jurisdiction of any court of competent jurisdiction in Clark County, Nevada, in any action, suit or proceeding arising out of or relating to this Agreement, or any of transactions contemplated hereby.

                                     18.           Attorneys’ Fees. In the event of a dispute between any of the parties hereto arising out of or relating to this Agreement or an alleged breach thereof, the prevailing party or parties in such dispute shall be entitled to recover its or their reasonable attorneys’ fees and other costs and expenses relating to such dispute from the non-prevailing party or parties.

                                     19.           Headings. The headings of the sections and subsections contained in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any provision of this Agreement.

                                     20.           Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Facsimile copies hereof and facsimile signatures thereon shall have the same force and effect as originals.

[Signature Pages Follows]

                                     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

“ASSIGNOR”

MGI, LLC, a Nevada limited liability company


By:           /s/ Randy Miller
Name:      Randy Miller
Title:        Manager/Member


“ASSIGNEE”

STATION CASINOS, INC., a Nevada corporation


By:           /s/ Richard J. Haskins
Name:      Richard J. Haskins
Title:        Executive Vice President


“SELLERS”

VESTIN FUND I, LLC, a Nevada limited liability company


By:           /s/ Lance Bradford
Name:      Lance Bradford
Title:        CFO


VESTIN FUND II, LLC, a Nevada limited liability company


By:           /s/ Lance Bradford
Name:      Lance Bradford
Title:        CFO



OWENS INVESTMENT MORTGAGE FUND, a
California limited liability partnership


By:           /s/ William C. Owens
Name:      William C. Owens
Title:        President, Owens Financial Group,
                 General Partner

EXHIBIT A

AMENDED AND RESTATED PURCHASE AGREEMENT

See attached

(EXHIBIT 10.2)

EX-10

EXHIBIT 10.2

AMENDED AND RESTATED PURCHASE AGREEMENT

                         THIS AMENDED AND RESTATED PURCHASE AGREEMENT (this "Agreement") is entered into this 27th day of September, 2004, between Vestin Fund I, LLC, Vestin Fund II, LLC and Owens Mortgage Investment Fund, or their assigns (collectively, “Sellers”), on the one hand, and on the other hand, Station Casinos, Inc. (“Buyer”), or its assigns.

RECITALS

                         WHEREAS, Sellers obtained title to the real property and improvements formerly known as the Castaways Hotel, Casino and Bowling Center (“Castaways”) located in Las Vegas, Nevada, as the result of a foreclosure sale held on Monday, February 2, 2004.

                         WHEREAS, Sellers and MGI, LLC, a Nevada limited liability company (“MGI”), entered into that Purchase Agreement dated June 4, 2004 (the “Former Agreement”), pursuant to which MGI agreed to purchase, and Sellers agreed to sell, the Castaways subject to the terms and conditions set forth therein.

                         WHEREAS, pursuant to that Assignment Agreement dated of even date herewith (the “Assignment”), among MGI, Buyer and Sellers, MGI assigned and transferred to Buyer all of MGI’s right, title and interest in the Former Agreement subject to the terms and conditions contained in the Assignment and the Former Agreement.

                         WHEREAS, Buyer and Sellers desire to replace the Former Agreement in its entirety with this Agreement, and the Former Agreement shall no longer be of any force or effect.

                         WHEREAS, the real property and other assets to be sold by Sellers to Buyer pursuant to this Agreement include the following:

a. All of the real property owned by Sellers and comprising the land and improvements thereon formerly known as the Castaways Hotel, Casino and Bowling Center located at 2800 Fremont Street, Las Vegas, Nevada 89104 (the "Hotel Property") as more fully described on Exhibit A attached hereto and incorporated herein by reference;

b. All tangible personal property owned by Sellers and located on and applicable to the Hotel Property except for the pylon sign which belongs to the sign vendor and "Gaming Devices," (the term "Gaming Devices" being used herein as defined in NRS 463.0155) at the Hotel Property which are being retained by Seller, but including within the tangible personal property being sold the "Associated Equipment" to the Gaming Devices (the term "Associated Equipment" being used herein as defined in NRS 463.0136 together with the signs, stools, stands, chairs and counting equipment located on and applicable to the Hotel Property) (collectively, the "Personal Property").

                         WHEREAS, the Hotel Property and the Personal Property are sometimes collectively referred to as the "Assets." The Assets do not include the Castaways' pylon sign which is owned by Federal Heath Sign Company, LLC (the "Pylon Sign"). The Assets include the Associated Equipment, but do not include the Gaming Devices or any cash and coinage, none of which Gaming Devices, cash or coinage is being sold and all of which is the property of and will be retained by Sellers (the Gaming Devices, cash or coinage is referred to as the "Sellers' Retained Property").

                         NOW, THEREFORE, for good and valuable consideration, as set forth above and in the remaining covenants in this Agreement, the parties agree as follows:

                         1. Purchase Price. The price to be paid for the Assets will be Twenty One Million Seven Hundred Sixty-Seven Thousand Twenty-Eight Dollars ($21,767,028) (the “Purchase Price”). There will be no credit against the Purchase Price for the Sellers' Retained Property and Sellers will remain the owners of the Sellers' Retained Property.

                         2. Escrow and Close of Escrow. Escrow will be opened with Heidi Colvin at Equity Title of Nevada (“Escrow Holder”), which will use this Agreement as escrow instructions, along with any supplemental instructions it requires. In the event of any conflict or inconsistency with any supplemental escrow instructions, this Agreement will control. At Close of Escrow, Sellers will deliver to Buyer the following in a form reasonably satisfactory to Buyer: (i) a grant, bargain and sale deed in customary form conveying the Hotel Property to Buyer subject only to those title exceptions set forth on that preliminary title report dated as of August 6, 2004, and issued by Equity Title of Nevada (the “Title Report”) and approved by Buyer (the “Permitted Exceptions”); provided, however, that Sellers covenant and agree to remove, or cause to be removed, at the Closing all monetary encumbrances on the Hotel Property as reflected in the Title Report, (ii) a bill of sale conveying the Personal Property to Buyer, and (iii) such other agreements, notices, opinions, warranties, certificates or other instruments as may be required hereunder. Closing (the "Close of Escrow") will be as provided in this Section and will occur at the executive offices of Station Casinos, Inc., 2411 West Sahara Avenue, Las Vegas, Nevada, 89102, at 10:00 a.m. on October 1, 2004.

                         3. Access to the Property. At all timers prior to the Close of Escrow, Buyer and its agents and representatives shall be entitled to enter onto the Hotel Property to perform inspections and tests of the Hotel Property. Buyer agrees to indemnify, defend and hold harmless Sellers and the Hotel Property from all liabilities, damages, losses, costs and expenses (including reasonable attorneys’ fees) incurred or suffered by Sellers by reason of any actual damage to the Hotel Property or injury to persons caused by Buyer and/or its agents and representatives in exercising Buyer’s rights under the preceding sentence. Sellers hereby grant Buyer a license from the date hereof until the expiration of this Agreement for the aforementioned purposes.

                         4. Representations, Covenants and Conditions Precedent to Close of Escrow.

A. Buyer’s Representations.

                         Buyer represents and warrants to Sellers as follows: (a) Buyer is duly incorporated, validly existing and in good standing under the laws of the State of Nevada, with all requisite power and authority to enter into and perform this Agreement, (b) the execution, delivery, and performance of this Agreement by the person executing the same on behalf of Buyer has been duly and validly authorized and this Agreement and the other agreements and instruments contemplated hereby constitute legal, valid and binding obligations of Buyer (assuming the due authorization, execution and delivery hereof and thereof by Sellers), enforceable in accordance with their respective terms, (c) neither the execution, delivery nor performance of this Agreement will breach any statute, law, ordinance, rule or regulation of any governmental authority or conflict with or result in a breach of any of the terms, conditions or provisions of any judgment, order, injunction, decree or ruling of any court or governmental authority to which Buyer is subject or any agreement or instrument to which it is party, or constitute a default thereunder, and (d) no consent, approval or authorization of any governmental authority or private party is required in connection with the execution, delivery and performance of this Agreement by Buyer.

B. Sellers’ Covenants and Representations.

a. Prior to Close of Escrow, Sellers will continue to pay all normal expenses for the Assets that Sellers are currently paying incident to ownership, including water, power, sewer, telephones, gas, electricity, taxes, security, maintenance, engineering, insurance, fence rental, service contracts for elevators, chillers, boilers and other furniture, fixtures and equipment.

b. Sellers must remove the Sellers' Retained Property and the records and documents of the former owners of the Hotel Property before the Close of Escrow, so that Buyer is not responsible for their storage and maintenance. Except for the foregoing, Sellers will refrain from selling or otherwise disposing of any asset included in the Assets and will preserve the Assets and maintain them in as favorable a condition as exists on the date hereof, normal wear and tear excepted.

c. Sellers represent and warrant to Buyer as follows: (a) Sellers are duly organized, validly existing and in good standing under the laws of their respective states of formation, with all requisite power and authority to enter into and perform this Agreement, (b) the execution, delivery, and performance of this Agreement by the persons executing the same on behalf of Sellers have been duly and validly authorized and this Agreement and the other agreements and instruments contemplated hereby constitute legal, valid and binding obligations of Sellers (assuming the due authorization, execution and delivery hereof and thereof by Buyer), enforceable in accordance with their respective terms, (c) neither the execution, delivery nor performance of this Agreement will breach any statute, law, ordinance, rule or regulation of any governmental authority or conflict with or result in a breach of any of the terms, conditions or provisions of any judgment, order, injunction, decree or ruling of any court or governmental authority to which Sellers or the Assets are subject or any agreement or instrument to which it is party or by which it or the Assets is bound, or constitute a default thereunder, and (d) no consent, approval or authorization of any governmental authority or private party is required in connection with the execution, delivery and performance of this Agreement by Sellers.

d. Except for that month-to-month lease agreement between Sellers and Verde Communications (a copy of which was previously delivered by Sellers to Buyer), there are no leases, licenses, or occupancy agreements of any kind, whether written or oral, covering the Hotel Property or any portion thereof.

C. Sellers’ Conditions.

                         All of the obligations of Sellers’ hereunder are subject to the fulfillment, prior to or at the Close of Escrow, as required, of each of the following conditions (unless waived by Sellers), subject to no reservations, restrictions, conditions or limitations unsatisfactory to Sellers:

a. [Intentionally Omitted.]

b. Buyer will execute and deposit with Escrow Holder all documents as are necessary for the timely Close of Escrow.

D. Buyer’s Conditions.

                         All of the obligations of Buyer hereunder are subject to the fulfillment, prior to or at the Close of Escrow, as required, of each of the following conditions (unless waived by Buyer), subject to no reservations, restrictions, conditions or limitations unsatisfactory to Buyer:

a. Buyer being able to obtain, at Sellers' expense, an ALTA Form B extended owner's policy of title insurance issued by the Title Company, acceptable to Buyer in the amount of the Purchase Price insuring Buyer that Buyer has fee title to the Hotel Property subject only to the Permitted Exceptions approved of by Buyer. Said policy will have attached thereto such endorsements as Buyer may require, including, but not limited to, endorsements insuring against encroachments, violations of covenants and restrictions, and mechanics' liens.

b. All conditions precedent to Buyer's obligations provided for in any other section of this Agreement have been satisfied.

c. Sellers will have obtained all approvals necessary, if any, to transfer all Associated Equipment constituting a portion of the Assets to Buyer.

d. Sellers shall have given all notices to governmental authorities and other third parties required to be given by them in connection with the transactions contemplated by this Agreement under any license, permit, authorization, franchise, loan, note, mortgage, indenture, bond, or other agreement or instrument. All other consents, approvals, authorizations, estoppel and other certificates, and agreements of any third party required for, or reasonably requested by Buyer in connection with, the consummation of the transactions contemplated hereby shall have been delivered to Buyer.

e. The representations and warranties of Sellers contained in this Agreement shall be true as of the Close of Escrow as though such representations and warranties were made at such time.

f. Sellers shall have performed and complied with all terms, covenants, agreements and conditions required by this Agreement to be performed or complied with by them prior to or at the Close of Escrow.

g. No action shall have been brought, and remain undismissed, alleging the illegality, invalidity of, or seeking to enjoin the transactions contemplated hereby. Since the date of this Agreement there shall have been no change in any applicable law that makes it illegal for any party hereto to perform its obligations hereunder (i) enacted (and not effectively vetoed), whenever effective, (ii) approved by a committee, having primary jurisdiction in respect of the proposed change in applicable Law, of any legislative body having jurisdiction over the Hotel Property, (iii) adopted as a final regulation pursuant to formal rule making, order-issuing or regulatory authority by any agency, board, commission, or other administrative, executive, or other regulatory body having jurisdiction over the Hotel Property, or (iv) embodied in a final, formal ruling, order or decision of any judicial body having jurisdiction over the Hotel Property.

h. Sellers shall have delivered to Buyer such documentary and other evidence as Buyer or Escrow Holder may reasonably require evidencing the authority of the person or persons who are executing this Agreement, or any other document in connection with this Agreement, on behalf of Sellers.

                         5. Time of the Essence and Risk of Loss. Time is of the essence with respect to each and every condition and provision of this Agreement. Any extension of any provision of this Agreement will require the express, written consent of Buyer and Sellers. In the event of destruction, damage or condemnation of any buildings or other improvements constituting a portion of the Assets, Sellers will promptly notify Buyer in writing. If Buyer notifies Sellers and Escrow Holder in writing within five (5) days of such notice from Sellers of Buyer's election to terminate this Agreement, this Agreement will cease and terminate and be of no further force or effect and neither party shall have any rights against the other by reason of this Agreement and/or such termination. If Buyer does not elect to terminate this Agreement, Sellers will repair either such damage or Buyer will be entitled to a credit against the Purchase Price of an amount equal to the reasonable value of the property so destroyed, damaged or taken, less any condemnation or insurance proceeds received by Buyer in connection with such destruction, damage or condemnation. This is intended as an express provision with respect to destruction and eminent domain which supercedes the provisions of the Nevada Uniform Vendor and Purchaser Risk Act.

                         6. Termination and Buyer’s and Sellers’ Remedies. This Agreement may be terminated, and the transactions contemplated hereby may be abandoned:

a. at any time before the Close of Escrow, by Sellers or Buyer, in the event (i) of a material breach hereof by the non-terminating party if such non-terminating party fails to cure such breach within ten (10) days following notification thereof by the terminating party or (ii) upon notification of the nonterminating party by the terminating party that the satisfaction of any condition to the terminating party's obligations under this Agreement becomes impossible or impracticable with the use of commercially reasonable efforts if the failure of such condition to be satisfied is not caused by a breach hereof by the terminating party; or

b. [Intentionally Omitted.]

c. If this Agreement is validly terminated pursuant to this Section, this Agreement will forthwith become null and void, and there will be no liability or obligation on the part of Sellers or Buyer (or any of their respective officers, directors, employees, agents or other representatives or affiliates), except as provided in the next succeeding paragraph.

d. Notwithstanding any other provision in this Agreement to the contrary, upon termination of this Agreement pursuant to subsection (a) or (b) above: (i) Sellers will remain liable to Buyer for any respective breach of this Agreement by Sellers existing at the time of such termination, and Buyer will remain liable to Sellers for any breach of this Agreement by Buyer existing at the time of such termination, but (ii) in no case may Buyer seek any remedy relating to the transactions and occurrences arising from this Agreement other than specific performance against Sellers, and Buyer hereby knowingly and specifically waives any and all claims for damages against Sellers with respect to any breach, however (iii) Sellers may seek any remedies, including damages and reasonable attorneys’ fees, against Buyer with respect to any breach as are available at law or in equity.

                         7. Condition of Assets. Buyer warrants that it is a sophisticated owner and hotel/casino developer familiar and experienced with all requirements for the use, development and operation of the Assets. Buyer acknowledges and agrees that because it has had an opportunity during the Inspection Period to inspect the Assets and the Hotel Property and Buyer has had an opportunity to withhold the Approval notice, Buyer is acquiring the Assets "AS IS", "WHERE IS" and with all faults as of the Close of Escrow. As such, Sellers make and have made no express or implied representation or warranty to Buyer concerning the Assets or the Hotel Property, including, without limitation:

a. Any representation concerning the physical condition or value of the Assets;

b. Any representation concerning zoning, subdivision or compliance with federal, state or local laws, ordinances, rules or regulations in connection with the development and use of the Assets, all of which Buyer will independently investigate;

c. Any representation concerning the past, current or future prospects, revenues, expenses or profitability of the Hotel Property;

d. Any representation regarding the suitability of the Hotel Property for any particular use or the fitness of the Hotel Property for any particular purpose;

e. Any representation concerning the ability of Buyer to obtain any consents, approvals or credit from, or to enter into any agreements with any third parties, private or public.

f. Any representation (and Buyer shall hold Sellers harmless from any liability) concerning hazardous materials or substances, environmental hazards or quality of construction, manufacture and design of any of the Assets, and relating to the condition or safety of the soils, the Assets or any adjacent property concerning any hazard, danger or defect on, near, or that may affect the Assets.

g. Sellers expressly exclude any and all implied warranties of merchantability, fitness for a particular purpose, design and condition. Buyer hereby acknowledges and agrees that (i) no representations or warranties of any kind or nature whatsoever, express or implied, written or oral, have been made to Buyer or any other person by or on behalf of Sellers; and (ii) no one has any authority to make any such representations and warranties on behalf of Sellers.

                         8. Closing Costs. All surveys, transfer taxes, Buyer’s owners policy of title insurance premium and one-half (½) of escrow fees charged by Escrow Holder will be paid by Sellers. Recording fees and one-half (½) of the escrow fees charged by Escrow Holder will be paid by Buyer.

                         9. Confidentiality.

a. In the course of considering the subject matter hereof, the parties may have needed to exchange certain information of a sensitive, proprietary, and/or confidential nature (the "Confidential Information"). Such Confidential Information, irrespective of the form of communication, would include all analyses, compilations, studies or other documents, which contain or otherwise reflect such information. Confidential Information will not include information which (i) becomes generally available to the public other than as a result of a disclosure by the recipient of such Confidential Information or an agent or representative of such recipient; (ii) was available to the recipient on a non-confidential basis prior to its disclosure by either of the parties hereto; or (iii) becomes available to the recipient on a non-confidential basis from some unrelated third-party source, provided that such source is not bound by a confidentiality agreement with respect to the Confidential Information or otherwise prohibited from transmitting the information to the recipient by a contractual, legal or fiduciary obligation.

b. In consideration for granting access to certain Confidential Information, the parties agree that such Confidential Information will be held in strictest confidence, and will not be disclosed to any third-party without the prior written consent of the disclosing party. It is further agreed that: (i) the Confidential Information will be used by the parties solely in connection with their consideration of this Agreement and the purchase of the Assets contemplated by this Agreement; and (ii) that each party will reveal the Confidential Information only to those of its agents, representatives (including legal representatives and financial advisors), consultants and employees actively and directly participating in the evaluation of the matters addressed in this Agreement, or who otherwise need to know such information. If, however, the recipients are requested or required (by oral questions, interrogatories, requests for information or documents in legal proceedings, subpoena, civil investigative demand or other similar process) to disclose any of the Confidential Information, the recipient so requested will provide prompt written notice of such request or requirement so that Sellers may seek a protective order or other appropriate remedy and/or waive compliance with the provision of this Agreement. If, in the absence of a protective order or other remedy or the receipt of a waiver the recipient reasonably believes they are nonetheless legally compelled to disclose Confidential Information to any tribunal or else stand liable for contempt or suffer other censure or penalty, the recipient may, without liability hereunder, disclose the Confidential Information. Buyer may also disclose Confidential Information to the contractor or architect hired by Sellers to work on the Hotel Property. In the event of any breach of Confidentiality, each party acknowledges that the disclosing party would be irreparably and immediately harmed and could not be made whole by monetary damages. Accordingly, the parties agree that in addition to any other remedy to which an injured party may be entitled at law or equity, such injured party will be entitled to injunctive relief to prevent any breaches of this Section.

c. Except as otherwise required by law, regulation or applicable securities exchange rules, neither Buyer nor Sellers shall issue or make any reports, statements or releases to the public with respect to this Agreement or the transactions contemplated hereby without the consent of the other, which consent shall not be unreasonably withheld.

                         10. Assignment. Buyer agrees that it will not assign any rights or privileges granted herein without the reasonable consent of Sellers; provided, however, that Buyer will have the right to assign any or all of its rights, interests and obligations under this Agreement to a wholly-owned subsidiary of Buyer, provided that such subsidiary agrees in writing to be bound by all of the terms, conditions and provisions contained herein and that Buyer remains fully liable for all liabilities and obligations under this Agreement. Subject to the preceding sentence, this Agreement is binding upon, inures to the benefit of and is enforceable by the parties hereto and their successors and assigns.

                         11. Expenses. The parties acknowledge that they may incur significant legal, accounting and other expenses in negotiating and preparing this Agreement. Each party will bear and pay all their own legal, accounting and other expenses in negotiating and preparing this Agreement.

                         12. Prorations. Sellers and Buyers agree that the amount of taxes, liens and charges that run with the Assets will be prorated by the Escrow Holder between Sellers and Buyer as of the Close of Escrow. All utility fees and charges, if any, will be prorated at the time of the billing on the basis of the number of days before and after the Close of Escrow, respectively.

                         13. Interpretation; Choice of Law; Attorneys’ Fees. This Agreement will be construed as if prepared by both parties. Each party is represented by separate counsel. This Agreement and all documents necessary for the consummation of it will be construed, interpreted, and the rights of the parties determined in accordance with the laws of the State of Nevada, with any lawsuit arising from or relating to this Agreement to be heard in a state or federal court located in Clark County, Nevada, with the prevailing party being entitled to an award of reasonable attorney fees and costs of suit.

                         14. Headings. The section headings in this Agreement are for the convenience of reference only and will not affect the meaning or construction of any provision hereof.

                         15. Counterparts. This Agreement may be executed in any number of counterparts, and each counterpart will be deemed an original, but all such separate counterparts together will constitute only one and the same instrument. A facsimile signature will be effective as an original.

                         16. Severability. Any provision of this Agreement which is held to be invalid or unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

                         17. Waiver. Failure by any party at any time to require the other party’s performance of any obligation under this Agreement will not affect its right to require performance of that obligation. Any waiver of any breach of any provision of this Agreement will not be construed as a waiver of any continuing or succeeding breach of such provision, a waiver or modification of the provision itself, or a waiver or modification of any right under this Agreement. No waiver will be binding unless executed in writing by the party making the waiver.

                         18. Modifications. No modification, amendment or supplement to this Agreement will be effective for any purpose unless in writing and signed by each party, and then such modification, amendment or supplement will be effective only in the specific instances and the specific purposes for which given.

                         19. Entire Agreement. This Agreement constitutes the entire agreement between the parties pertaining to the subject matter of this Agreement, and supersedes all prior and contemporaneous agreements, representations and understandings of the parties. No party is relying upon any warranties, representations, definitions or inducements not set forth in this Agreement.

                         20. Real Estate Broker/Commissions. There will be no real estate brokerage fees or commissions with respect to this Agreement.

                         21. Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, mailed by registered or certified mail (return receipt requested), sent via facsimile or sent by a nationally recognized overnight courier (providing proof of delivery) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

If to Buyer:

                         Station Casinos, Inc.
                         2411 W. Sahara Avenue
                         Las Vegas, Nevada 89102
                         Attn: Richard J. Haskins, Esq.
                         Facsimile: (702) 221-6613

If to Sellers:

                         Vestin Mortgage, Inc.
                         8379 W. Sunset Road
                         Las Vegas, Nevada 89113
                         Attn: Paul R. Connaghan, Esq.
                         Facsimile: (702) 921-6839

With a copy to:

                         Lionel Sawyer & Collins
                         300 South Fourth Street, Suite 1700
                         Las Vegas, Nevada 89101
                         Attn: Mark H. Goldstein, Esq.
                         Facsimile: (702) 383-8845

                         22. Authority. Each individual and entity executing this Agreement hereby personally represents and warrants that he or it has the capacity set forth on the signature pages hereof with full power and authority to bind the party on whose behalf he or it is executing this Agreement to the terms hereof.

                         23. Effect of Termination of Assignment. In the event that Buyer terminates the Assignment prior to the expiration of the Limited Due Diligence Period (as defined in the Assignment), this Agreement shall automatically be deemed void and of no force or effect.

[Signature page follows]

“BUYER”

STATION CASINOS, INC., a Nevada corporation

By: /s/ Richard J. Haskins

Title: Executive Vice President

“SELLERS”

VESTIN FUND I, LLC, a
Nevada limited liability company
By: Vestin Mortgage, Inc., Manager,

/s/ Lance Bradford
By: Lance Bradford, CFO

VESTIN FUND II, LLC, a
Nevada limited liability company

By: Vestin Mortgage, Inc., Manager,

By: /s/ Lance Bradford
       Lance Bradford, CFO

OWENS MORTGAGE INVESTMENT FUND, a
California limited partnership

By: /s/ William C. Owens
Its: General Partner

EXHIBIT A

LEGAL DESCRIPTION OF REAL PROPERTY

That real property consisting of approximately 25.86 acres
and more fully described on the attached legal description.