exv10w5



 





EXHIBIT 10.5




Revolving Loan and Security Agreement




 




					
	Principal: $5,000,000.00
	 	Loan Date: August 26, 2004
	 	Maturity: February 1, 2005







	 	 	 	 	 	 	 
	Borrower:

	 	Desert Capital Reit, Inc.
	 	Lender:
	 	Beresford Bancorporation, Inc.
	

	 	357 Renaissance Drive, Suite A
	 	 	 	600 Main Street
	

	 	Las Vegas, NV 89919
	 	 	 	Britton, SD 57430
	

	 	 	 	 	 	(605) 448-2643







     This Revolving Loan Agreement (“Agreement”) is entered into this date by
and between Desert Capital Reit, Inc., a Nevada Corporation (“Borrower”) and
Beresford Bancorporation, Inc. (“Lender”).



     NOW, THEREFORE, IT IS AGREED AS FOLLOWS:



     Section 1. Periodic Loans. During the term hereof, Lender hereby agrees
to make periodic loans to the Borrower in an aggregate principal amount at any
one time outstanding, not to exceed Five Million Dollars ($5,000,000.00)
(“Maximum Amount”). During the term hereof, from time to time Borrower may
notify the Lender of its need to borrow funds pursuant to this Agreement.
Within two business days of receipt of such notice from the Borrower seeking to
borrow funds, the Lender shall forward such funds to the Borrower up to, but no
in excess of, the Maximum Amount. This is a revolving loan. The amount repaid
may be reborrowed during the term.



     Section 2. Periodic Finance Charges. All principal and interest then
outstanding shall bear interest at the floating rate of the 10 year treasury
bill plus 3% per annum.



     Section 3. Payments. All interest outstanding shall be due and payable
by the Borrower on a monthly basis in arrears. All principal and interest then
outstanding shall be due and payable by the Borrower to the Lender on February
1, 2005. The Borrower may, from time to time, in the Borrower’s discretion,
make one or more periodic payments to the Lender. Such payments shall be
credited to the Borrower’s account on the date that such payment is physically
received by the Lender. Such payments shall be applied first to the interest
outstanding, and then to the principal outstanding.



     Section 4. Term. This Agreement shall begin this date and shall
terminate on February 1, 2005, unless terminated earlier pursuant to the
default provisions of this Agreement or extended by mutual agreement. Borrower
has option to extend the agreement until February 1, 2006 if there are no
defaults.



     Section 5. Creation of Security Interest. In order to secure the payment
of the principal and interest now or hereafter owed by the Borrower to the
Lender, the Borrower hereby grants to the Lender a security interest in the
property described below on the terms and conditions set forth in this
Agreement. The Borrower shall execute any financing statements regarding the
Collateral, pursuant to the Uniform Commercial Code, which the Lender



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reasonably requests the Borrower to execute. The Property subject to the
security interest (“Collateral”) is as follows:





	 	 	125% (One Hundred Twenty Five Percent) of the outstanding balance of the
promissory note shall be secured by mortgages and trust deeds owned by
the Borrower. The trust deeds and the mortgages shall be free and clear
of all encumbrances to the extent of 125% of the outstanding balance.
The Borrower is authorized to substitute mortgages and trust deeds,
providing they are free and clear of all encumbrances and are current in
payment at all times. In the event of default of payments by the
Borrower, the Borrower shall assign all interest in the collateral and
security to the Lender following any applicable notice or cure period for
disposition to fulfill all payments and obligations due and owing. Any
excess monies shall be returned to the Borrower after the payment in full
of principal and interest in the event of nonpayment. In addition,
Lender shall have access to the proceeds of any of the pledged property
in the event there is a sale or disposition of the collateral secured,
unless it is replaced by similar collateral.





     Section 6. Default Provisions. The occurrence of one or more of the
following events shall constitute an event of default:




     6.1 The nonpayment of any principal and/or interest of this loan
when the same shall have become due and payable after a 10 day notice has
been given to Borrower by Lender.




     6.2 The entry of a decree or order by a court having jurisdiction in
the premises adjudging the Borrower a bankrupt or insolvent, or approving
as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Borrower under the
federal Bankruptcy Act or any other applicable federal or state law, or
appointing a receiver, liquidator, assignee or trustee of the Borrower,
or any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of ninety (90) consecutive
days.




     6.3 The institution by the Borrower of proceedings to be adjudicated
a bankrupt or insolvent, or the consent by it to the institution of
bankruptcy or insolvency proceedings against it, or the filing of any
such petition or to the appointment of a receiver, liquidator, assignee
or trustee of the company, or of any substantial part of its property, or
the making by it of an assignment for the benefit of creditors or the
admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporation action by the Borrower in
furtherance of any such action.




     6.4 Default in the obligation of the Borrower for borrowed money,
other than this loan, which shall continue for a period of sixty (60)
days after the expiration of any cure periods under such loan.




     6.5 This Section 6 shall replace the “Default” provision in the
note, and any conflicts before this Section 6 and such “Default” section
shall be governed by this Section 6.



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     Section 7. Borrower’s Representations and Warranties. Perfection of
Security Interest. Borrower agrees to execute financing statements and to take
whatever other actions are reasonably requested by Lender to perfect and
continue Lender’s security interest in the Collateral. Upon request of Lender,
Borrower will deliver to Lender any and all of the documents evidencing or
constituting the collateral, and Borrower will note Lender’s interest upon any
and all chattel paper if not delivered to Lender for possession by Lender.
This is a continuing Security Agreement and will continue in effect during the
term hereof even though all or any part of the indebtedness is paid in full and
even though for a period of time Borrower may not be indebted to Lender.



     Section 8. Transactions involving Collateral. Except for inventory sold
or accounts collected in the ordinary course of Borrower’s business, or as
otherwise provided for in this Agreement, Borrower shall not sell, offer to
sell, or otherwise transfer or dispose of the Collateral unless the Collateral
that is sold is replaced by similar Collateral or the funds used to pay the
note. Borrower shall not pledge, mortgage, encumber or otherwise permit the
Collateral to be subject to any lien, security interest, encumbrance, or
charge, other than the security interest provided for in this Agreement,
without prior written consent of lender. This includes security interests even
if junior in right to the security interests granted under this Agreement.
Unless waived by Lender, all proceeds from any disposition of the Collateral
(for whatever reason) shall be held in trust for Lender and shall not be
commingled with any other funds; provided, however, this requirement shall not
constitutive consent by Lender to any sale or other disposition and shall not
apply if the disposed collateral is replaced with similar collateral.



     Section 9. Title. Borrower represents and warrants to Lender that
Borrower holds good and marketable title to the Collateral, free and clear of
all liens and encumbrances except for the lien of this Agreement. No financing
statement covering any of the Collateral is on file in any public office other
than those which reflect the security interest created by this Agreement or to
which Lender has specifically consented. Borrower shall defend Lender’s rights
in the Collateral against the claims and demands of all other persons.



     Section 10. Financing Statements. Borrower authorizes Lender to file a
UCC-1 financing statement, or alternatively, a copy of this Agreement to
perfect Lender’s security interest. At Lender’s request, Borrower additionally
agrees to sign all other documents that are necessary to perfect, protect, and
continue Lender’s security interest in the Property. Borrower will pay all
filing fees, title transfer fees, and other fees and costs involved unless
prohibited by law or unless Lender is required by law to pay such fees and
costs. Borrower irrevocably appoints Lender to execute financing statements
and documents of title in Borrower’s name and to execute all documents
necessary to transfer title if there is a default. Lender may file a copy of
this Agreement as a financing statement.



     Section 11. Attorney’s Fees; Expenses. Borrower agrees to pay upon
demand all reasonable Lender’s costs and expenses, including Lender’s
attorneys’ fees and Lender’s legal expenses, incurred in connection with the
enforcement of this Agreement.



     Section 12. Governing Law. This Agreement will be governed by, construed
and enforced in accordance with federal law and the laws of the State of South
Dakota.



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     Section 13. Waive Jury. All parties to this Agreement hereby waive the
right to any jury trial in any action, proceeding, or counterclaim brought by
any party against any other party.



Borrower:




 




	 	 	 
	                                                                            

	 	                                                                            
	Authorized signer for Desert Capital
Reit, Inc.

	 	Authorized signer for Desert Capital
Reit, Inc.
	 
	 	 







Lender:




                                                                                               




Authorized signer for Beresford Bancorporation, Inc.





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