EXHIBIT 2.1
UNIT PURCHASE AGREEMENT
THIS UNIT PURCHASE AGREEMENT (the "Agreement") is made and entered as
of November 10, 2004, by and among SECOND XXXXX CORPORATION, a South Dakota
corporation (the "Seller"), DESERT CAPITAL REIT, INC., a Maryland corporation
("Desert Capital"), and DESERT CAPITAL TRS, INC., a Delaware corporation (the
"Purchaser").
RECITALS
A. Seller is currently the owner of 100% of the issued and
outstanding shares of Consolidated Mortgage Corporation, a
Nevada corporation ("CMC").
B. Prior to the Initial Closing Date (as defined below), Seller
will, through a series of steps to be determined by Seller in
its sole discretion, restructure the operations of CMC into a
South Dakota limited liability company to be known as
Consolidated Mortgage, LLC (the "LLC") (or a similar name if
that name is not available). Hereinafter, this restructuring
shall be referred to as the "Restructuring."
C. The ownership interests of the LLC shall be denominated as
Units, and will consist of Units with voting and management
rights ("Voting Units") and Units without any voting and
management rights whatsoever ("Non-Voting Units"), with most
of the Units to be Non-Voting Units.
D. Desert Capital is the sole stockholder of the Purchaser.
E. The Purchaser desires to acquire all of the Units from Seller,
and the Seller desires to sell the Units to the Purchaser, all
on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals and in
consideration of the mutual promises and covenants set forth herein, the parties
hereby agree as follows:
ARTICLE 1
Purchase and Sale
Section 1.1 Purchase of the Units. Subject to the terms and conditions
set forth herein, the Seller hereby agrees to sell, transfer, assign and deliver
to the Purchaser all of the Units, and the Purchaser hereby agrees to purchase
all of the Units.
Section 1.2 Purchase Price. As consideration for the sale and transfer
of all of the Units as provided for in Section 1.1, and the other promises,
covenants and agreements set forth hereunder and subject to the terms and
conditions set forth herein, the Purchaser hereby agrees to pay to the Seller
$9,000,000 in cash and issue 450,000 shares of common stock of Desert Capital,
par value $0.01 per share (the "Desert Capital Common Stock"), as described in
the
prospectus of Desert Capital REIT, Inc. dated July 16, 2004 (the "Prospectus")
(collectively, the "Purchase Price").
Section 1.3 Payment of the Purchase Price. The Purchase Price shall be
paid to the Seller as follows:
(a) On the Initial Closing Date (as hereinafter defined), the
Purchaser shall issue to the Seller 337,500 shares of Desert
Capital Common Stock (the "Initial Shares"); and
(b) Until such time as the Seller has received the entire Purchase
Price, on the first business day of each calendar month
following the Initial Closing Date, (each, a "Subsequent
Closing Date"), the Purchaser shall pay (each a "Subsequent
Payment") to the Seller the lesser of (i) 19% of the Purchase
Price or (ii) an amount equal to 19% of the consolidated
assets of the Desert Capital (excluding the value of any Units
then owned by the Purchaser) as of the business day
immediately preceding the applicable Subsequent Closing Date.
The Subsequent Payments shall be first made by the delivery of
shares of Desert Capital Common Stock until such time as the
Purchaser shall have delivered to the Seller under this
Agreement in the aggregate 450,000 shares of Desert Capital
Common Stock and thereafter each Subsequent Payment or portion
thereof shall be payable in cash.
Section 1.4 Closing of Purchase and Delivery of Units. The initial
closing (the "Initial Closing") shall take place on the first business day
following the later of (a) the date the parties receive the requisite approval
from the Commissioner of Mortgage Lending of the State of Nevada (the "Nevada
Commissioner") for the sale by the Seller to the Purchaser of all Units as
contemplated by this Agreement and (b) the date on which the Restructuring is
complete (the "Initial Closing Date"). The Initial Closing shall take place at
the offices of the Purchaser, 0000-X Xxxxxxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxx 00000,
on the Initial Closing Date or at such other time or place as may be mutually
agreed upon by the parties. Each Subsequent Payment shall be delivered on the
Subsequent Closing Date as directed by Seller from time to time pursuant to
written notice thereof being delivered to the Purchaser as provided in Section
5.8. Seller may request that cash payments of Purchase Price be paid by wire
transfer. Seller shall have no obligation to deliver to Units to Purchaser until
the applicable payment of Purchase Price is received.
Section 1.5 Seller's Obligations at Closings. At the Initial Closing,
the Seller shall deliver to the Purchaser Non-Voting Units equal in number to
25% of the outstanding Units of the LLC then outstanding. Concurrently with the
receipt of each Subsequent Payment, the Seller shall deliver to the Purchaser
Units evidencing a percentage of the Units then outstanding equal to 100%
multiplied by a fraction, the numerator of which is the amount of the applicable
Subsequent Payment and the denominator of which is the Purchase Price.
Non-Voting Units shall be transferred before Voting Units, and all Voting Units
must be transferred at once. All Units delivered by Seller shall be subject to
the repurchase option described in Section 1.7 until the last Subsequent Closing
Date.
2
Section 1.6 Purchaser's Obligations at Closings. At the Initial
Closing, the Purchaser shall deliver to the Seller certificate(s) evidencing the
Initial Shares in such denominations and in such names as the Seller shall
request in writing. On each Subsequent Closing Date, the Purchaser shall deliver
to the Seller cash and/or shares of Desert Capital Common Stock as described in
Sections 1.3 and 1.4 above. Certificate(s) for Desert Capital Common Stock shall
be in such denominations and in such names as the Seller shall request in
writing. All shares of Desert Capital Common Stock delivered to the Seller
pursuant to this Agreement shall be immediately transferable by Seller, subject
to the terms of the legend below. Each of the certificates evidencing shares of
Desert Capital Common Stock shall have imprinted on them a legend indicating
such shares were issued pursuant to an exemption from registration under the
federal securities laws as set forth below:
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR SO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
Section 1.7 Repurchase Option. This Agreement shall be null and void if
the Initial Closing Date does not occur on or before March 31, 2005. If at any
time after the Initial Closing Date, the Purchaser fails to remit any Subsequent
Payment on a Subsequent Closing Date, and such failure continues for a period of
15 days following the delivery of a written notice of such failure by the Seller
to the Purchaser, or if Purchaser fails to acquire all Units within one year
following the date hereof, the Seller shall be entitled (but shall not be
required) to repurchase the Units previously acquired by the Purchaser hereunder
by delivering to the Purchaser in the form received by Seller (i.e., shares of
Desert Capital Common Stock, regardless of value, or cash) that portion of the
Purchase Price paid by the Purchaser to the Seller prior to such default.
Section 1.8 Management Agreement. Not later than 10 days following the
date of this Agreement, the Seller shall cause CMC and/or the LLC to enter into
a management agreement (the "Management Agreement") with Xxxxxx Management
Company, Ltd. relating to the management of the mortgage broker business
currently conducted by CMC upon terms and conditions satisfactory to such
parties.
Section 1.9 Assignment Agreement. Not later than 10 days following the
date of this Agreement, the Seller and the Purchaser shall enter into an
assignment agreement (the "Assignment Agreement") pursuant to which the
Purchaser shall transfer all Units previously acquired to the Seller in the
event the Seller exercises its repurchase option under Section 1.7
3
hereof. The Assignment Agreement shall be held by an escrow agent mutually
agreeable to the parties pursuant to an escrow agreement to be entered into
prior to the Initial Closing Date.
ARTICLE 2
Representations and Warranties and Agreements of Seller
Seller hereby represents and warrants to Desert Capital and the
Purchaser that:
Section 2.1 Title to the Units. Following the completion of the
Restructuring, the Seller will be the beneficial owner of the Units, and own the
Units free and clear of all liens, claims, pledges, security agreements,
options, equities, charges, encumbrances or restrictions. The Units will be the
only securities (debt, equity or derivative) of the LLC outstanding.
Section 2.2 Organization, Qualifications and Corporate Power. The
Seller is a corporation duly incorporated, validly existing and in good standing
under the laws of the State of South Dakota. CMC is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Nevada. Seller has (or will have on the Initial Closing Date) the corporate
power and authority to own and hold its assets, including the Units, and to
carry on its business as now or at the Initial Closing Date conducted. Seller
has all requisite corporate power and authority to execute, deliver and perform
this Agreement and to sell and to deliver the Units. On the Initial Closing
Date, the LLC will be a limited liability company duly organized, validly
existing and in good standing under the laws of the State of South Dakota and
will have the power and authority to own and hold its assets and to carry on the
business now conducted by CMC. CMC has and the LLC will have on the date the
Restructuring commences the authority to conduct the Restructuring.
Section 2.3 Restructuring. The Restructuring shall be completed within
30 days following the date of this Agreement. On the Initial Closing Date, the
LLC (i) will have equity capital of at least $250,000, (ii) will own all
operating assets of the mortgage broker business currently conducted by CMC, and
(iii) will have no liabilities unrelated to the business currently conducted by
CMC other than those existing on the date hereof. Any equity capital in excess
of $250,000 in the LLC immediately prior to the Initial Closing Date may be
removed by Seller at or prior to the Initial Closing.
Section 2.4 Operations. The parties agree, and the Management Agreement
with Xxxxxx Management Company, Ltd. shall provide, that the operations of CMC
and the LLC shall be conducted in accordance with past practices of CMC from the
date hereof through the date of the last transfer of Units hereunder. The
parties acknowledge that a distribution of all profits of the LLC from and after
the date of the Initial Closing (or the immediately preceding Subsequent Closing
Date) shall be made (pro rata based on the number of Units then owned by each
party) at or immediately prior to each Subsequent Closing.
Section 2.5 Authorization of Agreement. The execution and delivery by
Seller of this Agreement, the performance by the Seller of its obligations
hereunder, including the sale and delivery of the Units, have been duly
authorized by all requisite corporate action and do not and will not violate any
provision of law, any order, judgment or decree of any court or other agency
4
of government or regulatory authority, the Articles or the Bylaws of the Seller
or CMC; provided that Seller makes no warranty that the Purchaser will be able
to secure the regulatory approvals necessary to complete the transactions
described herein.
Section 2.6 Government Authorizations; Third Party Consents; No Breach.
Except as provided in this Agreement, no approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
governmental authority or any other individual, corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
government (or an agency or political subdivision thereof) or other entity of
any kind is necessary or required in connection with the execution, delivery,
performance or enforcement against the Seller of this Agreement or the transfer
of the Units as contemplated hereby, except for any consents that have already
been obtained or federal and state securities filings, if any, which have been
or will be timely filed by Desert Capital and the Purchaser in accordance with
applicable law prior to the Initial Closing Date. The execution, delivery and
performance by the Seller of this Agreement, and the consummation of the
transactions contemplated hereby, will not (i) violate, result in the breach of,
or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, any material agreement to which Seller
may be bound, or (ii) result in the creation or imposition of any lien upon the
Seller or any of the assets owned by it.
Section 2.7 Enforceability. This Agreement constitutes a valid and
binding obligation of the Seller, enforceable against it in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws of general application relating to or
affecting the enforcement of creditor rights; laws and judicial decisions
regarding indemnification for violations of federal securities laws; and the
availability of specific performance or other equitable remedies.
Section 2.8 No Other Warranties. Except as expressly stated herein,
Seller makes no warranties, representations or covenants whatsoever concerning
the financial condition or operations of CMC or the LLC. The parties acknowledge
that Xxxx Xxxxxxxx, who is an officer of Desert Capital, is fully familiar with
the financial condition and operations of CMC to date and will remain so from
and after the date hereof directly or indirectly through Xxxxxx Management
Company, Ltd. As such, except as expressly stated herein, Purchaser will acquire
the Units "as is" and with all faults.
ARTICLE 3
Representations and Warranties of Desert Capital and the Purchaser
Desert Capital and the Purchaser hereby represent and warrant to the
Seller that:
Section 3.1 Organization, Qualifications and Corporate Power. Desert
Capital is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Maryland. The Purchaser is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware. Each of Desert Capital and the Purchaser has the corporate
power and authority to own and hold its assets and to carry on its business as
now conducted. Each of Desert Capital and the Purchaser has all requisite
corporate power and
5
authority to execute, deliver and perform this Agreement, including the power
and authority to acquire and hold the Units to be acquired pursuant to this
Agreement.
Section 3.2 Authorization of Agreement. The execution and delivery by
each of Desert Capital and the Purchaser of this Agreement and the performance
by each of Desert Capital and the Purchaser of its obligations hereunder,
including the delivery of the Purchase Price, have been duly authorized by all
requisite corporate action and do not and will not violate any provision of law,
any order, judgment or decree of any court or other agency of government or
regulatory authority, the charter or the bylaws of either Desert Capital or the
Purchaser.
Section 3.3 Governmental Authorizations; Third Party Consents; No
Breach. Except as provided in this Agreement, no approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
governmental authority or any other individual, corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
government (or an agency or political subdivision thereof) or other entity of
any kind is necessary or required in connection with the execution, delivery,
performance or enforcement against Desert Capital and the Purchaser of this
Agreement or the acquisition or ownership of the Units as contemplated hereby,
except for any consents that have already been obtained or federal and state
securities filings, if any, which have been or will be timely filed by Desert
Capital and the Purchaser in accordance with applicable law prior to the Initial
Closing Date. The execution, delivery and performance by Desert Capital and the
Purchaser of this Agreement, and the consummation of the transactions
contemplated hereby, will not (i) violate, result in the breach of, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, any material agreement to which either Desert
Capital or the Purchaser may be bound, or (ii) result in the creation or
imposition of any lien upon Desert Capital or the Purchaser or any of the assets
owned by them.
Section 3.4 Enforceability. This Agreement constitutes a valid and
binding obligation of both Desert Capital and the Purchaser, enforceable against
them in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws of general
application relating to or affecting the enforcement of creditor rights; laws
and judicial decisions regarding indemnification for violations of federal
securities laws; and the availability of specific performance or other equitable
remedies.
Section 3.5 Desert Capital Common Stock. The Desert Capital Common
Stock shall be as described in the Prospectus, which description has not been
materially modified or revoked since July 16, 2004. Except as set forth in
Supplement No. 1 to the Prospectus, since July 16, 2004, there has been no
change in the financial condition, operations, business, properties or prospects
of Desert Capital other than changes that individually or in the aggregate could
not reasonably be expected to have a material adverse effect on Desert Capital
or the Purchaser, the financial condition thereof, or the validity or
enforceability of this Agreement.
6
ARTICLE 4
Conditions to Closing
Section 4.1 Conditions Precedent to Obligations of Desert Capital and
Purchaser. The obligations of Desert Capital and Purchaser to effect any Closing
hereunder shall be subject to the fulfillment on or before the applicable
Closing Date of each of the following conditions:
(a) Status as of Closing Date. At and as of the each Closing Date
hereunder:
(i) The representations and warranties of Seller
contained in this Agreement shall be true in all
material respects as though made at and as of the
applicable Closing Date; and
(ii) Seller shall, in all material respects, have
performed and satisfied or otherwise complied with,
or caused such performance and satisfaction of and
compliance with, all covenants, terms and conditions
required by this Agreement to be performed and
satisfied or otherwise complied with by Seller on or
prior to the applicable Closing Date.
(b) Regulatory Approvals. All requisite approvals or waivers
thereof shall have been received from applicable regulatory
authorities.
(c) No Action to Prevent Consummation. No decision of any court
awarding substantial damages or penalty against any of the
parties or affiliates thereof in connection with the
transactions contemplated hereby shall have been rendered, and
no action or proceeding before any court seeking such damages
or penalty or a preliminary or permanent injunction or other
order to prevent the consummation of the transactions
contemplated hereby shall be pending.
Section 4.2 Conditions Precedent to Obligations of Seller. The
obligations of Seller to effect the transactions contemplated hereby shall be
subject to the fulfillment on or before the applicable Closing Date of each of
the following conditions:
(a) True Representations and Warranties. All representations and
warranties of Desert Capital and Purchaser contained in this
Agreement shall be true in all material respects as though
made at and as of the applicable Closing Date, and Desert
Capital and Purchaser shall have performed and satisfied in
all material respects all covenants, terms and conditions
required by this Agreement to be performed and satisfied by
Desert Capital and Purchaser on or prior to the applicable
Closing Date.
(b) Securities Laws and Regulatory Approvals. All applicable
requirements of federal and state securities law have been
compiled with by Desert Capital to date and all requisite
approvals or waivers shall have been received from applicable
regulatory authorities. No supplement to the Prospectus shall
have disclosed an item or items, above or in the aggregate,
that could reasonably be expected to have a material adverse
effect on Desert Capital or the Purchaser, the financing
condition thereof, or the validity or enforceability of this
Agreement.
7
(c) No Action to Prevent Consummation. No decision of any court
awarding substantial damages or penalty against any of the
parties or affiliates thereof in connection with the
transactions contemplated hereby shall have been rendered, and
no action or proceeding before any court seeking such damages
or penalty or a preliminary or permanent injunction or other
order to prevent the consummation of the transactions
contemplated hereby shall be pending.
(d) Transfer of Purchase Price. Purchaser shall have transferred
to Seller the applicable portion of the Purchaser Price.
(e) Restructuring. The Restructuring shall have been completed
prior to the Initial Closing Date.
(f) Opinion of Counsel. Seller shall have received an opinion of
counsel for the Purchaser that all required securities filings
for the consummation of this Agreement have been made on or
prior to the Initial Closing Date.
ARTICLE 5
General
Section 5.1 Amendments, Waivers and Consents. This Agreement may not be
amended, except in a written document signed by the Seller, Desert Capital and
the Purchaser. No waiver of any provision of this Agreement shall be effective
unless made in a writing or writings signed by the party to be bound thereafter.
Section 5.2 Delivery of Filings. As soon as practicable, following the
date of this Agreement, Desert Capital shall provide Seller with copies of all
filings and correspondence made with or received from the Nevada Commissioner
prior to the date hereof relating to the consummation of the transactions
contemplated by this Agreement, and shall provide Seller with copies of all such
filings and correspondence made or received following the date hereof up to and
including the Initial Closing Date within one business day of the making or
receipt thereof. Desert Capital shall provide Seller with copies of all
supplements to the Prospectus filed with the Securities and Exchange Commission
within two business days of the filing thereof until the final Subsequent
Closing Date.
Section 5.3 Registration Rights. Except as provided below, if, at any
time on or after the date which is six months following the date Desert
Capital's initial Registration Statement on Form S-3 is declared effective by
the Securities and Exchange Commission, the holders of at least 25% of all
shares of Desert Capital Common Stock issued pursuant to this Agreement (the
"Registerable Shares") submit a written request to Desert Capital to register
such shares for resale, Desert Capital shall file a Registration Statement on
Form S-3 covering the resale of all then outstanding Registerable Shares (the
"Resale Registration Statement"). Notwithstanding the foregoing, if at the time
of receipt of such written notice, Desert Capital is then engaged in an
underwritten public offering or, in the opinion of the directors of Desert
Capital, such a filing would require the premature disclosure of a development
involving Desert Capital, Desert
8
Capital may delay the filing of such Resale Registration Statement for a period
of up to 90 days from the date of receipt of such written notice.
Section 5.4 Survival; Assignability of Rights. All representations and
warranties of the parties made in this Agreement will survive the sale and
delivery of the Units for a period of two (2) years from the final Subsequent
Closing Date. All agreements made in this Agreement will survive the final
Subsequent Closing Date, and will bind and inure to the benefit of the parties
hereto and their respective successors and assigns until the expiration of the
applicable statute of limitations.
Section 5.5 Further Assurances. The Seller agree to execute and deliver
all agreements, assignments and assurances and do all such other acts and things
reasonably requested by the Purchaser to confirm the Purchaser's rights, title
and interest in, to or under the Units, and both parties shall take such further
actions reasonably requested to carry out the transactions contemplated by this
Agreement.
Section 5.6 Headings. The headings of the Sections and paragraphs of
this Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.
Section 5.7 Governing Law. THIS AGREEMENT IS TO BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL SUBSTANTIVE LAWS OF THE STATE OF
NEVADA, WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PROVISIONS THEREOF.
Section 5.8 Notices. Except as specifically provided herein, all
notices and other communications hereunder shall be in writing and shall be
deemed to be duly received (a) on the date given if delivered personally, (b)
one day after sent by overnight delivery or facsimile providing confirmation of
receipt of delivery or (c) on the third business day after mailing if sent by
registered or certified mail (return receipt requested), to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(i) If to Seller: Xxxxx X. Xxxxxx
Second Xxxxx, Inc.
000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
Facsimile: 000-000-0000
With copy to: Xxxxxxxxx X. Tanck
Davenport, Evans, Xxxxxxx & Xxxxx, L.L.P.
000 Xxxx 00xx Xxxxxx
Xxxxx Xxxxx, XX 00000
Facsimile: 000-000-0000
9
(ii) If to Desert Capital
or Purchaser: Xxxx X. Xxxxxxxx
Desert Capital REIT, Inc.
0000-X Xxxxxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Facsimile: 000-000-0000
With copy to: Xxxxxxx X. Xxxxx
Xxxxx Liddell & Xxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile: 000-000-0000
Section 5.9 Severability. If any provision of this Agreement is held
invalid under applicable law, such provision will be ineffective to the extent
of such invalidity, and such invalid provision will be modified to the extent
necessary to make it valid and enforceable. Any such invalidity will not
invalidate the remainder of this Agreement.
Section 5.10 Entire Agreement. This Agreement constitutes the entire
agreement of the parties and shall supersede any prior agreements.
Section 5.11 Counterparts. This Agreement may be executed in any number
of counterparts, each of which will be taken to be an original, but such
counterparts will together constitute one document.
Section 5.12 No Third Party Beneficiaries. Nothing herein expressed or
implied is intended or shall be construed to confer upon or give to any person,
other than the parties hereto and their respective successors and permitted
assigns, any rights or remedies under or by reason of this Agreement.
Section 5.13 Arbitration. If any dispute shall arise among the parties
with respect to this Agreement and such dispute cannot be resolved by the
parties within twenty (20) business days of one party giving notice to the other
that it wishes to resolve a dispute, such dispute shall be exclusively and
finally settled by binding, non-appealable arbitration conducted before a
three-person arbitration panel in accordance with the Commercial Arbitration
Rules of the American Arbitration Association and final judgment on the award
rendered by the arbitration panel shall be entered in any court or tribunal of
competent jurisdiction. Any such arbitration proceeding shall be held in Las
Vegas, Nevada.
Section 5.14 Expenses. Each of the parties hereto shall bear all of its
own costs and expenses associated with the negotiation and execution of this
Agreement and the consummation of the transaction contemplated hereby,
including, without limitation, legal and accounting fees and expenses.
Section 5.15 Desert Capital Guaranty. Desert Capital hereby fully and
unconditionally guarantees the performance of the Purchaser hereunder, together
with all expenses of and reasonable attorneys' fees incurred by reason of
default by the Purchaser. Notice of the acceptance of this guaranty, of
nonpayment or other nonperformance, or protest, demand or other
10
remedy available hereunder is expressly waived. Desert Capital hereby expressly
consents to an extension hereunder without notice. This guaranty is binding upon
Desert Capital and its successors and assigns and shall inure to the benefit of
the Seller and its successors and assigns.
Section 5.16 Time of Essence. Time is of the essence to this Agreement.
Section 5.17 Binding Effect. Neither this Agreement nor any rights,
duties or obligations hereunder shall be assignable by either party, in whole or
in part, without the prior written consent of the other party, and any attempted
assignment in violation of this prohibition shall be null and void. Subject to
the foregoing, all of the terms and provisions hereof shall be binding upon and
inure to the benefit of, the successors and permitted assigns of the parties
hereto.
The undersigned have executed this Agreement as of the day and year
first written above.
SELLER:
SECOND XXXXX CORPORATION,
a South Dakota corporation
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
DESERT CAPITAL REIT, INC.,
a Maryland corporation
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 0000-X Xxxxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Facsimile: (000) 000-0000
11
PURCHASER:
DESERT CAPITAL TRS, INC.
a Delaware corporation
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address: 0000-X Xxxxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Facsimile: (000) 000-0000
12
