EXHIBIT 1.1
DEALER-MANAGER AGREEMENT
THIS AGREEMENT, dated as of ___________, 2004, is made by and between
Desert Capital REIT, Inc., a Maryland corporation (the "Company"), and CMC
Financial Services, Inc., a Nevada corporation (the "Managing Dealer").
WHEREAS, the Company proposes to offer and sell up to an aggregate of
22,000,000 shares of its common stock par value $0.01 per share (the "Common
Stock") to the public pursuant to a public offering;
WHEREAS, the Managing Dealer is registered with the National
Association of Securities Dealers, Inc. as a broker-dealer, and is presently or,
prior to any offers or sales of Shares, will be licensed in all states in which
it offers the Shares, as a broker-dealer qualified to offer and sell to the
public securities of the type represented by the Shares; and
WHEREAS, the Company desires to retain the Managing Dealer to use its
best efforts to sell the Shares and to manage the sale by others of the Shares,
and the Managing Dealer is willing and desires to serve as the Managing Dealer
for the Company for the sale of the Shares upon the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the Company and the Managing
Dealer agree as follows:
SECTION 1
DEFINITIONS
Whenever used in this Agreement, the following terms shall have the
following specified meanings.
1.1 "Company" means Desert Capital REIT, Inc., a Maryland corporation.
1.2 "NASD" means the National Association of Securities Dealers, Inc.
1.3 "Offering" means the offering of up to 22,000,000 Shares of the Company to
the public pursuant to the terms and conditions of the Registration Statement.
1.4 "Offering Period" means the period commencing on the effective date of the
Registration Statement and ending on the earliest of the following: (i) the
later of one year after the initial date of the Prospectus or, at the Company's
election, two years after the initial date of the Prospectus; (ii) the
acceptance by the Company of subscriptions for 22,000,000 Shares, with up to
2,000,000 of such Shares available to investors who participate in the Company's
Dividend Reinvestment Plan; (iii) the termination of the Offering by the
Company; (iv) the termination of the effectiveness of the Registration
Statement; or (v) the termination of the Company.
-1-
1.5 "Participating Brokers" mean those broker-dealers engaged by the Managing
Dealer to participate in the Offering pursuant to Paragraph 3.2.
1.6 "Primary Shares" means 20,000,000 shares of Common Stock being issued by the
Company at a purchase price of $10.00 per share.
1.7 "Prospectus" means the final prospectus included in the Registration
Statement, pursuant to which the Company will offer Shares to the public, as the
same may be amended or supplemented from time to time after the effective date
of the Registration Statement.
1.8 "Registration Statement" means the registration statement pursuant to which
the Company has registered the Shares with the SEC as provided in the Securities
Act of 1933, as amended, as such registration statement may be amended or
supplemented from time to time.
1.9 "Reinvestment Shares" means 2,000,000 shares of Common Stock to be issued
pursuant to the Company's Dividend Reinvestment Plan.
1.10 "SEC" means the Securities and Exchange Commission.
1.11 "Shares" mean, collectively, the Primary Shares and the Reinvestment
Shares.
1.12 "State Regulatory Authorities" mean the commissions, departments, agencies
or other authorities in the fifty states, the District of Columbia, and the
Commonwealth of Puerto Rico which regulate the offer and sale of securities.
SECTION 2
APPOINTMENT
Subject to the terms and conditions set forth in this Agreement, the
Company hereby appoints the Managing Dealer as the managing dealer of the
Offering to use its best efforts to sell the Shares of the Company and to manage
the sale by others of such Shares for the Company's account. The Managing Dealer
hereby accepts such appointment.
SECTION 3
SALE OF SHARES
3.1 Best Efforts. The Managing Dealer shall use its best efforts during the
Offering Period to sell or cause to be sold the Shares in such quantities and to
such persons and in accordance with such terms as are set forth in this
Agreement, the Prospectus and the Registration Statement. Notwithstanding
anything herein to the contrary, the Managing Dealer shall have no obligation
under this Agreement to purchase any of the Shares for its own account.
3.2 Association of Other Broker-Dealers. The Company hereby acknowledges and
agrees that the Managing Dealer may engage Participating Brokers to participate
in the Offering, provided that (i) all Participating Brokers are registered with
the NASD and are duly licensed by the State Regulatory Authorities in the
jurisdictions in which they will offer and sell Shares or exempt from
broker-dealer registration with the NASD and the State Regulatory Authorities,
and (ii) all such engagements are evidenced by written
-2-
agreements, the terms and conditions of which substantially conform to the form
of Participating Broker Agreement approved by the Company and attached hereto as
Exhibit A (the "Participating Broker Agreement"). The Managing Dealer is
authorized to reallow up to 6.0% of the commissions which it receives under
Paragraph 4.1 to Participating Brokers with respect to Primary Shares sold by
them.
3.3 Telephonic Subscriptions.
(a) The Managing Dealer may permit certain Participating
Brokers to accept telephonic or other oral subscriptions for Shares;
provided, however, that any such Participating Broker agrees that: (i)
the registered representative and branch manager of the Participating
Broker shall execute the subscription agreement on behalf of any
investor who telephonically or orally subscribes for Shares; (ii) the
Participating Broker shall not charge investors who telephonically or
orally subscribe for Shares any additional fees, including but not
limited to fees relating to opening an account with the Participating
Broker; and (iii) the Participating Broker shall not accept telephonic
or oral subscriptions for Shares from any investor unless such investor
has received a copy of the Company's Prospectus prior to making a
decision to invest. The Managing Dealer shall enter into a written
agreement with each Participating Broker who wishes to accept
telephonic or other oral subscriptions for Shares from investors in
certain states more particularly identified in the Prospectus, pursuant
to which the Participating Broker shall agree to explain to such
investor that: (i) the investor shall have the right to rescind such
subscription for a period of ten days following the receipt of the
Confirmation (as hereinafter defined); and (ii) unless the investor
rescinds such subscription within the applicable period of time, the
investor shall be bound by the subscription agreement. The Managing
Dealer shall confirm the receipt of subscriptions for Shares which have
been subscribed for by telephone or other oral instructions by written
notice to the investor (the "Confirmation"). Such Confirmation shall be
mailed to the investor not later than seven days after the date on
which the investor's funds are deposited, shall contain a statement
that the investor has a right to rescind his subscription, and shall be
accompanied by a Prospectus and a Subscriber's Signature Page.
(b) Notwithstanding anything to the contrary contained in
Paragraph 4.3(a) of this Agreement, in the event that the Company pays
any commissions and fees to the Managing Dealer for sale by a
Participating Broker of one or more Shares pursuant to a telephonic or
other oral subscription where representatives of such Participating
Broker execute the subscription agreement relating to such Shares, and
the subscription is rescinded as to one or more of the Shares covered
by such subscription, the Company shall decrease the next payment of
commissions or other compensation otherwise payable to the Managing
Dealer by the Company under this Agreement by an amount equal to the
commission rate established in Paragraph 4.1 of this Agreement,
multiplied by the number of Shares as to which the subscription is
rescinded. In the event that no payment of commissions or other
compensation is due to the Managing Dealer after such withdrawal
occurs, the Managing Dealer shall pay the amount specified
-3-
in the preceding sentence to the Company within ten days following
receipt of notice by the Managing Dealer from the Company stating the
amount owed as a result of rescinded subscriptions.
3.4 Suitability and Minimum Purchase Requirements.
(a) The Managing Dealer will use every reasonable effort, to
the extent it sells Shares to investors, to assure that any such Shares
are sold only to investors who:
(i) meet the investor suitability standards,
including the minimum income and net worth standard
established by the Company, and minimum purchase requirements
set forth in the Registration Statement;
(ii) can reasonably benefit from the Company based on
the prospective investor's overall investment objectives and
portfolio structure;
(iii) are able to bear the economic risk of the
investment based on each prospective investor's overall
financial situation; and
(iv) have apparent understanding of:
(A) the fundamental risks of the
investment;
(B) the risk that the prospective
investor may lose the entire
investment;
(C) the lack of liquidity of the
Shares;
(D) the restrictions on transferability
of the Shares;
(E) the background and qualifications
of the officers and directors of
Xxxxxx Management Company, Ltd.,
the advisor to the Company (the
"Advisor"); and
(F) the tax consequences of an
investment in the Shares.
(b) The Managing Dealer will make the determinations
required to be made by it pursuant to Paragraph 3.4(a) above
based on information it has obtained from a prospective
investor, including, at a minimum, but not limited to the
prospective investor's age, investment objectives, investment
experience, income, net worth, financial situation, other
investments of the prospective investor, as well as any other
pertinent factors deemed by the Managing Dealer to be
relevant.
(c) The Managing Dealer shall maintain such records
evidencing compliance with the determination of the investor
suitability standards and minimum purchase requirements set
forth in the Registration Statement, to the extent required by
Paragraphs 3.4(a) and 3.4(b) above for a period of not less
than
-4-
six years, or for such greater time period as shall comply
with all applicable federal, state and other regulatory
requirements.
(d) In addition to the foregoing, to the extent
required by Paragraphs 3.4(a) and 3.4(b), the Managing Dealer
shall comply fully with all the applicable provisions of the
NASD's Conduct Rules and the following provisions:
(i) the Managing Dealer shall have reasonable grounds
to believe, based upon information provided by the investor
concerning his investment objectives, other investments,
financial situation and needs, and upon any other information
known by the Managing Dealer, that (A) each investor to whom
the Managing Dealer sells Shares is or will be in a financial
position appropriate to enable him to realize to a significant
extent the benefits (including tax benefits) of an investment
in the Shares, (B) each investor to whom the Managing Dealer
sells Shares has a fair market net worth sufficient to sustain
the risks inherent in an investment in the Shares (including
potential loss and lack of liquidity), and (C) the Shares
otherwise are or will be a suitable investment for each
investor to whom the Managing Dealer sells Shares, and the
Managing Dealer shall maintain files disclosing the basis upon
which the determination of suitability was made;
(ii) the Managing Dealer shall not execute any
transaction involving the purchase of Shares in a
discretionary account without prior written approval of the
transaction by the investor;
(iii) the Managing Dealer shall have reasonable
grounds to believe, based upon the information made available
to it, that all material facts are adequate and accurately
disclosed in the Registration Statement and provide a basis
for evaluating the Shares;
(iv) in making the determination set forth in item
(iii) above, the Managing Dealer shall evaluate items of
compensation, properties, tax aspects, financial stability and
experience of the sponsor, conflicts of interest and risk
factors, and any other information deemed pertinent by it; and
(v) prior to executing a purchase transaction in the
Shares, the Managing Dealer shall have informed the
prospective investor of all pertinent facts relating to the
liquidity and marketability of the Shares.
(e) The Managing Dealer shall comply with the requirements for
determining the suitability of investors who elect to participate in
the Reinvestment Plan (the "Reinvestment Plan") in accordance with the
procedure set forth in Paragraph 6 of such Reinvestment Plan in the
form of Appendix A to the Prospectus.
-5-
3.5 Sales Literature. The Managing Dealer shall use and distribute in
conjunction with the offer and sale of any Shares only the Prospectus and such
sales literature and advertising as shall have been previously approved in
writing by the Company.
3.6 Jurisdictions. The Managing Dealer shall cause Shares to be offered and sold
only in those jurisdictions specified in writing by the Company for whose
account Shares are then offered for sale, and such list of jurisdictions shall
be updated by the Company as additional states are added. The Company shall
specify only such jurisdictions in which the offering and sale of its Shares has
been authorized by appropriate State Regulatory Authorities. No Shares shall be
offered or sold for the account of the Company in any other states.
3.7 Escrow. All funds received by the Managing Dealer for the sale of Shares
shall be deposited in an escrow account established by the Company at Premier
Trust of Nevada (the "Escrow Agent"), by noon of the second business day
following receipt of such funds by the Managing Dealer. Such escrow account
shall be denominated "ESCROW ACCOUNT FOR THE BENEFIT OF SUBSCRIBERS FOR COMMON
STOCK OF DESERT CAPITAL REIT, INC." Checks may be made payable to either the
Escrow Agent or the Company. The Managing Dealer may authorize certain
Participating Brokers which are "$250,000 broker-dealers" to instruct their
customers to make their checks for Shares subscribed for payable directly to the
Participating Broker. In such case, the Participating Broker will collect the
proceeds of the subscribers' checks and issue a check made payable to the order
of the Escrow Agent for the aggregate amount of the subscription proceeds or
wire such funds to the Escrow Agent. No funds will be released and no sales
commissions will be paid except in compliance with Rule 15c2-4 under the
Securities Exchange Act of 1934, as amended.
SECTION 4
COMPENSATION
4.1 Commissions.
The Company shall pay to the Managing Dealer, as compensation
for all services to be rendered by the Managing Dealer pursuant to this
Agreement, sales commission for each Primary Share for which a sale is
completed, regardless of whether such Primary Share is sold by the
Managing Dealer or a Participating Broker. The Company will pay a sales
commission of up to 6.5% of the selling price of each Primary Share for
which a sale is completed.
-6-
4.2 Due Diligence and Marketing Support Fee.
(a) Due Diligence. The Company shall pay the Managing Dealer
for actual expenses incurred in connection with the due diligence of
the Company and this Offering and such reimbursement will be paid
following submission of invoices supporting such expenses, up to 0.5%
of the gross proceeds of the Primary Shares sold. All due diligence
expense reimbursements shall be paid by the Managing Dealer from this
amount.
(b) Marketing Support Fee. The Company shall pay to the
Managing Dealer a nonaccountable fee for assistance in selling and
marketing the Primary Shares. The Marketing Support Fee will be 2.5% of
the selling price of each Primary Share
-7-
sold. The Managing Dealer may reallow all or any portion of the
applicable amount for each Primary Share sold by a Participating Broker
with whom the Managing Dealer enters into a separate agreement relating
to the marketing support fee.
4.3 Completed Sale.
(a) A sale of a Primary Share shall be deemed to be completed
under Paragraphs 4.1 and 4.2 if and only if (i) the Company has
received a properly completed and executed subscription agreement,
together with payment of the full purchase price of each purchased
Primary Share, from or, in accordance with Paragraph 3.3(a), on behalf
of an investor who satisfies the applicable suitability standards and
minimum purchase requirements set forth in the Registration Statement
as determined by the Managing Dealer in accordance with the provisions
of this Agreement, (ii) the Company has accepted such subscription, and
(iii) such investor has been admitted as a stockholder of the Company.
(b) The Managing Dealer hereby acknowledges and agrees that
the Company, in its sole and absolute discretion, may accept or reject
any subscription, in whole or in part, for any reason whatsoever, and
no commission will be paid to the Managing Dealer with respect to that
portion of any subscription which is rejected.
4.4 Payment. The commissions and fees specified in Paragraphs 4.1 and 4.2 for
the sale of any Primary Share shall be payable in cash by the Company, as
specified in Paragraphs 4.1 and 4.2, no later than seven days after the end of
the calendar month in which the investor subscribing for the Primary Share is
admitted as a stockholder of the Company. Investors whose subscriptions for
Primary Shares are accepted shall be admitted no later than the end of the
calendar month in which such subscriptions are accepted. The Company will accept
or reject all subscriptions within 30 days after receipt. Notwithstanding
anything to the contrary contained herein, in the event that the Company pays
any commission to the Managing Dealer for sale by a Participating Broker of one
or more Primary Shares and the subscription is rescinded as to one or more of
the Primary Shares covered by such subscription, the Company shall decrease the
next payment of commissions or other compensation otherwise payable to the
Managing Dealer by the Company under this Agreement by an amount equal to the
commission rate established in Paragraph 4.1 of this Agreement, multiplied by
the number of Primary Shares as to which the subscription is rescinded. In the
event that no payment of commissions or other compensation is due to the
Managing Dealer after such withdrawal occurs, the Managing Dealer shall pay the
amount specified in the preceding sentence to the Company within ten days
following receipt of notice by the Managing Dealer from the Company stating the
amount owed as a result of rescinded subscriptions.
-8-
SECTION 5
TERM OF AGREEMENT
5.1 Commencement and Expiration. This Agreement shall commence as of the date
first above written and, unless sooner terminated pursuant to Paragraph 5.2 or
by operation of law or otherwise, shall expire at the end of the Offering
Period.
5.2 Termination. Any party may terminate this agreement at any time and for any
reason by giving 30 days prior written notice of intention to terminate to each
other party hereto.
5.3 Obligations Surviving Expiration or Termination.
(a) In addition to any other obligations of the Managing
Dealer that survive the expiration or termination of this Agreement,
the Managing Dealer, upon the expiration or termination of this
Agreement, shall (i) promptly deposit any and all funds in its
possession which were received from investors for the sale of Shares
into the appropriate escrow account specified in Paragraph 3.7, and
(ii) promptly deliver to the Company all records and documents in its
possession which relate to the Offering and are not designated as
dealer copies. The Managing Dealer, at its sole expense, may make and
retain copies of all such records and documents, but shall keep all
such information confidential. The Managing Dealer shall use its best
efforts to cooperate with the Company to accomplish an orderly transfer
of management of the Offering to a party designated by the Company.
(b) In addition to any other obligations of the Company that
survive the expiration or termination of this Agreement, the Company,
upon expiration or termination of this Agreement, shall pay to the
Managing Dealer all commissions and fees to which the Managing Dealer
is or becomes entitled under Section 4 at such time or times as such
commissions and fees become payable pursuant to Paragraph 4.3.
-9-
SECTION 6
COVENANTS OF THE MANAGING DEALER
The Managing Dealer covenants, warrants and represents, during the
full term of this Agreement, that:
(a) it is (i) a corporation duly organized and validly
existing under the laws of the State of Nevada, (ii) a member of the
NASD, and (iii) a broker-dealer registered under the securities laws of
all fifty states, the District of Columbia, and the Commonwealth of
Puerto Rico;
(b) it will use its best efforts to assure that all Shares are
offered and sold in accordance with (i) the terms of the Registration
Statement, the Prospectus and this Agreement, (ii) the requirements of
applicable federal and state securities laws and regulations, and (iii)
the applicable rules of the NASD, including, without limitation, the
NASD's Conduct Rules;
(c) it will cause the Shares to be offered or sold only in
those jurisdictions specified in writing by the Company;
(d) it will not use any offering or selling materials other
than materials furnished or previously approved in writing by the
Company;
(e) it either (i) will not purchase Shares for its own account
or (ii) will hold all such Shares for investment;
(f) it agrees to (i) comply with U.S. Department of Treasury
regulations (outlined in the Patriot Act) that require reasonable
efforts to verify the identity of new customers, maintain customer
records, and check the names of new customers against a government
terrorist list, (ii) provide the Financial Crimes Enforcement Network
with information regarding: 1) the identity of a specified individual
or organization, 2) account number, 3) all identifying information
provided by the account holder, and 4) the date and type of
transaction, upon request, and (iii) manually monitor account activity
to identify patterns of unusual size or volume, geographic factors, and
any of the other "red flags" described in the Patriot Act as potential
signals of money laundering or terrorist financing. The Company
reserves the right to reject account applications from new customers
who fail to provide necessary account information or who intentionally
provide misleading information; and
(g) it agrees to, and will take reasonable steps to require
soliciting dealers to, comply with Rule 15c2-4 promulgated under the
Securities Exchange Act of 1934, as amended, regarding the transmission
of funds.
SECTION 7
COVENANTS OF THE COMPANY
The Company covenants, warrants and represents, during the full term
of this Agreement, that:
-10-
(a) it will use its best efforts to maintain the effectiveness
of the Registration Statement, and will file, or cause to be filed,
such amendments to the Registration Statement as may be reasonably
necessary for that purpose;
(b) it will use its best efforts to (i) prevent the issuance
of any order by the SEC, any State Regulatory Authority or any other
regulatory authority which suspends the effectiveness of the
Registration Statement, prevents the use of the Prospectus, or
otherwise prevents or suspends the Offering, and (ii) obtain the
lifting of any such order if issued;
(c) it will give the Managing Dealer written notice when the
Registration Statement becomes effective and shall deliver to the
Managing Dealer a signed copy of the Registration Statement, including
its exhibits, and such number of copies of the Registration Statement,
without exhibits, and the Prospectus, and any supplements and
amendments thereto which are finally approved by the SEC, as the
Managing Dealer may reasonably request for sale of the Shares, which
Prospectus shall not contain any untrue statement of a material fact
required to be stated therein or omit any material statement necessary
to make the statements therein, in light of the circumstances under
which they are made, not misleading;
(d) if at any time any event occurs and becomes known to the
Company prior to the end of the Offering Period, as a result of which
the Registration Statement or Prospectus would include an untrue
statement of a material fact or, in view of the circumstances under
which they were made, omit to state any material fact necessary to make
the statements therein not misleading, the Company will effect the
preparation of an amended or supplemented Registration Statement or
Prospectus which will correct such statement or omission;
(e) it will promptly notify the Managing Dealer of any
post-effective amendments or supplements to the Registration Statement
or Prospectus;
(f) it will, during the full term of this Agreement, abide by
all applicable provisions of its governing instruments, as the same may
be amended; and
(g) it will use its best efforts to cause, at or prior to the
time the Registration Statement becomes effective, the qualification or
registration of the Shares for offering and sale under the securities
laws of such jurisdictions as shall be determined by the Company.
SECTION 8
PAYMENT OF COSTS AND EXPENSES
8.1 Managing Dealer. The Managing Dealer shall pay all costs and expenses
incident to the performance of its obligations under this Agreement which are
not expressly assumed by the Company under Paragraph 8.2 below.
-11-
8.2 Company. The Company shall pay all costs and expenses related to:
(a) the registration of the offer and sale of the Shares with
the SEC, including the cost of preparation, printing, filing and
delivery of the Registration Statement and all copies of the Prospectus
used in the Offering, and any amendments or supplements to such
documents;
(b) the preparation and printing of the form of subscription
agreement to be used in the sale of the Shares;
(c) the qualification or registration of the Shares under
state securities or "blue sky" laws of states where the Shares are to
be offered or sold;
(d) the filing of the Registration Statement and any related
documents, including any amendments or supplements to such documents,
with the SEC, NASD and State Regulatory Authorities;
(e) any filing fees, and fees and disbursements to counsel,
accountants and escrow agents which are in any way related to any of
the above items; and
(f) the preparation, printing and filing of all advertising
and sales materials originated by it relating to the sale of Shares.
SECTION 9
INDEMNIFICATION
The Managing Dealer agrees to indemnify, defend and hold harmless the
Company from all losses, claims, demands, liabilities and expenses, including
reasonable legal and other expenses incurred in defending such claims or
liabilities, whether or not resulting in any liability to the Company, which the
Company may incur in connection with the offer or sale of any Shares, either by
the Managing Dealer pursuant to this Agreement or any Participating Broker
acting on the Managing Dealer's behalf pursuant to the Participating Broker
Agreement which arise out of or are based upon (i) an untrue statement or
alleged untrue statement of a material fact, or any omission or alleged omission
of a material fact, other than a statement or omission contained in the
Prospectus, the Registration Statement, or any state securities filing which was
not based on information supplied to the Company by the Managing Dealer or a
Participating Broker; or (ii) the breach by the Managing Dealer or any
Participating Broker acting on its behalf of any of the terms and conditions of
this Agreement or any Participating Broker Agreement, including, but not limited
to, alleged violations of the Securities Act of 1933, as amended.
The Company agrees to indemnify, defend and hold harmless the Managing
Dealer and its employees, officers, directors and Affiliates, from all losses,
claims, demands, liabilities and expenses, including reasonable legal and other
expenses incurred in defending such claims or liabilities, whether or not
resulting in any liability to the Managing Dealer, which the Managing Dealer may
incur in connection with the offer or sale of any Shares, which arise out of or
are based upon (i) an untrue statement or alleged
-12-
untrue statement of a material fact, or any omission or alleged omission of a
material fact, contained in the Prospectus, the Registration Statement, or any
state securities filing, or (ii) the breach by the Company of any of the terms
and conditions of this Agreement, including, but not limited to, alleged
violations of the Securities Act of 1933, as amended.
SECTION 10
MISCELLANEOUS
10.1 Notices. Any notice, approval, request, authorization, direction or other
communication under this Agreement shall be given in writing and shall be deemed
to be delivered when delivered in person or deposited in the United States mail,
properly addressed and stamped with the required postage, registered or
certified mail, return receipt requested, to the intended recipient as set forth
below.
If to the Company:
Desert Capital REIT, Inc.
0000 Xxxxxxxxxxx Xxxxx, Xxxxx X
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxx X. Xxxxxxxx, President
If to the Managing Dealer:
CMC Financial Services, Inc.
0000 Xxxxxxxxxxx Xxxxx, Xxxxx X
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxx Xxxxxxxxxx
Any party may change its address specified above by giving each other
party notice of such change in accordance with this Paragraph 10.1.
10.2 Invalid Provision. The invalidity or unenforceability of any provision of
this Agreement shall not affect the other provisions hereof, and this Agreement
shall be construed in all respects as if such invalid or unenforceable provision
were omitted.
10.3 No Partnership. Nothing in this Agreement shall be construed or interpreted
to constitute the Managing Dealer as in association with or in partnership with
the Company, and instead, this Agreement only shall constitute the Managing
Dealer as a dealer authorized by the Company to sell and to manage the sale by
others of the Shares according to the terms set forth in the Registration
Statement, the Prospectus or this Agreement.
10.4 No Third Party Beneficiaries. No provision of this Agreement is intended to
be for the benefit of any person or entity not a party to this Agreement, and no
third party shall be deemed to be a beneficiary of any provision of this
Agreement. Further, no third party shall by virtue of any provision of this
Agreement have a right of action or an enforceable remedy against either party
to this Agreement.
-13-
10.5 Survival. Paragraph 5.3 and Section 9 and all provisions of this Agreement
which may reasonably be interpreted or construed as surviving the expiration or
termination of this Agreement shall survive the expiration or termination of
this Agreement.
10.6 Entire Agreement. This Agreement constitutes the complete understanding
among the parties hereto, and no variation, modification or amendment to this
Agreement shall be deemed valid or effective unless and until it is signed by
all parties hereto.
10.7 Successors and Assigns. No party shall assign (voluntarily, by operation of
law or otherwise) this Agreement or any right, interest or benefit under this
Agreement without the prior written consent of the other party. Subject to the
foregoing, this Agreement shall be fully binding upon, inure to the benefit of,
and be enforceable by, the parties hereto and their respective successors and
assigns.
10.8 Nonwaiver. The failure of any party to insist upon or enforce strict
performance by any other party of any provision of this Agreement or to exercise
any right under this Agreement shall not be construed as a waiver or
relinquishment to any extent of such party's right to assert or rely upon any
such provision or right in that or any other instance; rather, such provision or
right shall be and remain in full force and effect.
10.9 Applicable Law. This Agreement shall be interpreted, construed and enforced
in all respects in accordance with the laws of the State of Maryland applicable
to contracts to be made and performed entirely in said state.
[Remainder of Page Intentionally Left Blank]
-14-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
Company:
DESERT CAPITAL REIT, INC.
By:
-------------------------------------------
Xxxx X. Xxxxxxxx, President
Managing Dealer:
CMC FINANCIAL SERVICES, INC.
By:
-------------------------------------------
Xxxx X. Xxxxxxxx, President
-15-
