ex10_20.htm


    
 

    Exhibit
10.20


    MODIFICATION
OF NOTE AGREEMENT

    


    THIS MODIFICATION OF NOTE AGREEMENT
(the "Agreement"), dated as
of November 11, 2008, is between CONSOLIDATED MORTGAGE, LLC, a Nevada limited
liability company ("Maker") and DESERT
CAPITAL TRS, INC., a Delaware corporation ("Payee").

     

    RECITALS:

     

    A.           Maker
and Payee entered into that certain Loan Agreement dated as of November 21,
2007, as amended by that certain First Amendment to Loan Agreement, dated as of
even date herewith (as the same has been and may be hereafter further amended,
supplemented or modified form time to time, the "Loan
Agreement").

     

    B.           Pursuant
to the Loan Agreement, Maker executed that certain Promissory Note dated as of
November 21, 2007, payable to the order of Payee in the original principal
amount of $15,500,000.00 (as the same may renewed, extended or otherwise
modified from time to time, the "Note").

     

    C.           The
payment and performance of the liabilities and obligations of Maker under the
Loan Documents (as defined in the Loan Agreement), including without limitation,
the indebtedness evidenced by the Note, are secured by that certain Pledge
Agreement dated November 21, 2007 between Sandstone Equity Investors, LLC, a
Delaware limited liability company ("Sandstone") (such
Pledge Agreement as the same may be amended, supplemented or modified from time
to time is hereinafter referred to as the "Pledge
Agreement").

     

    D.           Maker
has requested and Payee has agreed to modify certain terms of the Note subject
to the terms and conditions of this Agreement.

     

    NOW,
THEREFORE, in consideration of the premises herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

    


    ARTICLE
I

    


    Definitions

    


    1.1           Definitions.  Capitalized
terms used in this Agreement, to the extent not otherwise defined herein, shall
have the same meanings as in the Loan Agreement.

    


    ARTICLE
II

    


    Modifications

    


    2.1           Modification
of Paragraph 1.  Effective
as of the date hereof, Paragraphs 1(a) and (b) of the Note are hereby amended
and restated to in their respective entireties to read as follows and Paragraphs
1(c) and (d) are hereby added to the Note to read in their respective entireties
as follows:

    


    
      	
              (a)  

            	
              Two
      (2) quarterly installments in the principal amount of $387,500 each, plus
      accrued and unpaid interest thereon, shall be due and payable, on March
      31, 2008 and June 30, 2008; and
thereafter

            


    

    


    
      	
              (b)  

            	
              Nine
      (9) quarterly installments of accrued and unpaid interest on the
      outstanding principal balance of this Note shall be due and payable, with
      the first such installment to be due and payable on September 30, 2008,
      with like successive installments of accrued and unpaid interest to be due
      and payable on the last day of each succeeding calendar quarter thereafter
      until and including September 30, 2010; and
  thereafter

            


    

    


    
      	
              (c)  

            	
              Twenty-eight
      (28) quarterly installments in the principal amount of $387,500 each, plus
      accrued and unpaid interest thereon, shall be due and payable, with the
      first such installment to be due and payable on December 31, 2010, with
      like successive installments of principal plus accrued and unpaid interest
      to be due and payable on the last day of each succeeding calendar quarter
      thereafter until and including September 30, 2017; and
      thereafter

            


    

    


    
      	
              (d)  

            	
              A
      final installment in the amount of all outstanding principal, plus all
      accrued and unpaid interest thereon shall be due and payable on December
      31, 2017.

            


    

    


    2.2           Modification of Paragraph
2.  Effective as of July 1, 2008, Paragraph 2 of the Note is
hereby amended and restated to read in its entirety as follows:

    


    
      	
              2.

            	
              Interest
      Rate.  Interest on the outstanding and unpaid principal
      balance hereof shall be computed at a per annum rate equal to six percent
      (6%), but in no event shall interest contracted for, charged or received
      hereunder plus any other charges in connection herewith which constitute
      interest exceed the maximum interest permitted by applicable law, said
      rate to be effective prior to maturity (however such maturity is brought
      about).

            


    

    


    2.3           Renewal and Extension of
Indebtedness.  The indebtedness, liabilities and obligations
evidenced by the Note are hereby renewed and extended until the maturity date of
the Noted, but shall not be extinguished or otherwise impaired
hereby.

    


    ARTICLE
III

    


    Ratifications,
Representations and Warranties

    


    3.1           Ratifications.  The
terms and provisions set forth in this Agreement shall modify and supersede all
inconsistent terms and provisions set forth in the Note and except as expressly
modified and superseded by this Agreement, the terms and provisions of the Note
and the other Loan Documents are hereby ratified, confirmed, renewed and
extended and shall continue in full force and effect.  Maker and Payee
agree that the Note as modified hereby and the other Loan Documents shall
continue to be legal, valid, and binding obligations of Maker and enforceable
against  Maker in accordance with their respective
terms.  Except as otherwise specified herein, the terms and provisions
hereof shall in no manner impair, limit, restrict or otherwise affect the
obligations and indebtedness of Maker to Payee as evidenced by the Note and the
other Loan Documents.  Maker and Payee hereby
acknowledge and agree that as of the date hereof, the outstanding principal
balance of the Note is $14,725,000.

    


    3.2           Representations and
Warranties.  Maker hereby represents and warrants to Payee that
the execution, delivery and performance of this Agreement and any and all other
Loan Documents executed and/or delivered in connection herewith have been
authorized by all requisite action on the part of Maker and will not violate any
applicable order, rule or regulation of any court or governmental
authority.

    


    3.3           No
Offsets.  Sandstone and Maker each hereby acknowledge that
neither Sandstone nor Maker has any offsets or claims against, or defenses of
counterclaims to, the terms or provisions of or the other obligations of
Sandstone or Maker created or evidenced by the Note, the Loan Agreement, the
Pledge Agreement or the other Loan Documents.

    


    ARTICLE
IV

    


    Miscellaneous

    


    4.1           Survival of Representations
and Warranties.  All representations and warranties made in
this Agreement or any other Loan Document including any Loan Document furnished
in connection with this Agreement shall survive the execution and delivery of
this Agreement and the other Loan Documents, and no investigation by Payee or
any closing shall affect the representations and warranties or the right of
Payee to rely upon them.

    


    4.2           Reference to
Note.  Each of the Loan Documents, including the Loan Agreement
and any and all other agreements, documents, or instruments now or hereafter
executed and delivered pursuant to the terms hereof or pursuant to the terms of
the Loan Agreement as amended, are hereby amended so that any reference in such
Loan Documents to the Note shall mean a reference to the Note as modified
hereby.

    


    4.3           Severability.  Any
provision of this Agreement held by a court of competent jurisdiction to be
invalid or unenforceable shall not impair or invalidate the remainder of this
Agreement and the effect thereof shall be confined to the provision so held to
be invalid or unenforceable.

    


    4.4           APPLICABLE
LAW.  THIS AGREEMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED
PURSUANT HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE' LAWS
OF THE STATE OF NEVADA AND THE APPLICABLE LAWS OF THE UNTIED STATES OF
AMERICA.

    


    4.5           Successors and
Assigns.  This Agreement is binding upon and shall inure to the
benefit of Payee, Maker and Sandstone and their respective successors and
assigns, except neither Sandstone nor Maker may assign or transfer any of its
rights or obligations hereunder without the prior written consent of
Payee.

    


    4.6           Counterparts.  This
Agreement may be executed in one or more counterparts, each of which when so
executed shall be deemed to be an original, but all of which when taken together
shall constitute one and the same instrument.

    


    4.7           Effect of
Waiver.  No consent or waiver, express or implied, by Payee to
or for any breach of or deviation from any covenant, condition or duty by
Sandstone or Maker shall be deemed a consent or waiver to or of any other breach
of the same or any other covenant, condition or duty.

    


    4.8           Headings.  The
headings, captions, and arrangements used in this Agreement are for convenience
only and shall not affect the interpretation of this Agreement.

    


    4.9           ENTIRE
AGREEMENT.  THIS AGREEMENT, THE NOTE, THE LOAN AGREEMENT, THE
OTHER LOAN DOCUMENTS AND ALL OTHER INSTRUMENTS, DOCUMENTS AND AGREEMENTS
EXECUTED AND DELIVERED IN CONNECTION HEREWITH AND THEREWITH EMBODY THE FINAL,
ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR
ORAL, RELATING TO THE SUBJECT MATTER HEREOF, AND MAY NOT BE CONTRADICTED OR
VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR
DISCUSSIONS OF THE PARTIES HERETO.  THERE ARE NO ORAL AGREEMENTS AMONG
THE PARTIES HERETO.

    


    


    [Signatures on immediately following
page.]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    



    Executed
as of the date first written above.

    


    CONSOLIDATED
MORTGAGE, LLC

     

    


    


    By: /s/Todd B. Parriott

    Todd B.
Parriott

    President

     

    
 

    DESERT
CAPITAL TRS, INC.

    


    


    


    By: /s/Stacy M. Riffe

    Stacy M.
Riffe

    Chief
Financial Officer

     

    


    


    


    By execution hereof, Sandstone Equity
Investors, LLC, a Delaware limited liability company (“Sandstone”) hereby
consents and agrees to this Modification of Note and the First Amendment to Loan
Agreement dated of even date herewith between Maker and Payee and agrees that
the Pledge Agreement dated November 21, 2007 to which it is a party, is in full
force and effect and shall remain in full force and effect and shall continue to
be the legal, valid and binding obligation of Sandstone enforceable against
Sandstone in accordance with its terms.  Sandstone further
acknowledges and agrees that the term “Indebtedness” as defined in the Pledge
Agreement includes, without limitation, the indebtedness, liabilities and
obligations of Maker to Payee evidenced by the Note, as modified
hereby.

    


    


    SANDSTONE EQUITY INVESTORS,
LLC

    


    


    


    By: /s/Todd B. Parriott

    Todd B.
Parriott

    President