Document:

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

    Presidentex10_21.htm

     

    Exhibit
10.21

    GUARANTY

    TO: Jeffrey K. Holloway,
Trustee of the Sage Trust dated 8/17/93 as to an undivided
$3,000,000/$13,675,000 interest; Jeffrey K. Holloway, Trustee of the Rich Living
Trust dated 7/10/98 as to an undivided $400,000/$13,675,000 interest; The
DeBellis Family Limited Partnership, whose manager is Rocky Joe, LLC, a Nevada
limited liability company, as to an undivided $2,200,000/$13,675,000 interest;
Pete Kubena, Trustee of the Pete P. Kubena Trust as to an undivided
$2,975,000/$13,675,000 interest; Laurence R. Meyerson, an unmarried man as to an
undivided $300,000/$13,675,000 interest; the R.L. Faiman 1995 Irrevocable Trust
dated 8/8/95, Deborah L. Shoofey, Trustee as to an undivided
$750,000/$13,675,000 interest; RLF Diversified General Partnership, Deborah L.
Shoofey General Partner as to an undivided $750,000/$13,675,000 interest; Russel
E. Warthen Separate Property Trust as to an undivided $1,400,000/$13,675,000
interest; Russel E. Warthen IRA, First Savings Bank Custodian as to an undivided
$115,000/$13,675,000 interest; Dana Warthen Wainwright, a married woman as her
sole and separate property as to an undivided $310,000/$13,675,000 interest; the
Judith G. Lally Trust as to an undivided $225,000/$13,675,000 interest; R. Mark
Warthen, a single man, as to an undivided $175,000/$13,675,000 interest; Tara
Warthen Madson, a married woman as her sole and separate property as to an
undivided $150,000/$13,675,000 interest; the John E. Warthen Family Trust as to
an undivided $355,000/$13,675,000 interest; John Merrill Warthen Family Trust as
to an undivided  $250,000/$13,675,000 interest; Rebecca Warthen, a
single woman, as to an undivided $120,000/$13,675,000 interest; and the Linda M.
Tucker Trust as to an undivided $200,000/$13,675,000 interest (Beneficiaries)

    1.       FOR
VALUE RECEIVED and in consideration of any loan or other financial accommodation
heretofore or hereafter at any time made or granted to WARM JONES, LLC, a Nevada
limited liability company (hereinafter called Company) by Jeffrey K. Holloway,
Trustee of the Sage Trust dated 8/17/93 as to an undivided
$3,000,000/$13,675,000 interest; Jeffrey K. Holloway, Trustee of the Rich Living
Trust dated 7/10/98 as to an undivided $400,000/$13,675,000 interest; The
DeBellis Family Limited Partnership, whose manager is Rocky Joe, LLC, a Nevada
limited liability company, as to an undivided $2,200,000/$13,675,000 interest;
Pete Kubena, Trustee of the Pete P. Kubena Trust as to an undivided
$2,975,000/$13,675,000 interest; Laurence R. Meyerson, an unmarried man as to an
undivided $300,000/$13,675,000 interest; the R.L. Faiman 1995 Irrevocable Trust
dated 8/8/95, Deborah L. Shoofey, Trustee as to an undivided
$750,000/$13,675,000 interest; RLF Diversified General Partnership, Deborah L.
Shoofey General Partner as to an undivided $750,000/$13,675,000 interest; Russel
E. Warthen Separate Property Trust as to an undivided $1,400,000/$13,675,000
interest; Russel E. Warthen IRA, First Savings Bank Custodian as to an undivided
$115,000/$13,675,000 interest; Dana Warthen Wainwright, a married woman as her
sole and separate property as to an undivided $310,000/$13,675,000 interest; the
Judith G. Lally Trust as to an undivided $225,000/$13,675,000 interest; R. Mark
Warthen, a single man, as to an undivided $175,000/$13,675,000 interest; Tara
Warthen Madson, a married woman as her sole and separate property as to an
undivided $150,000/$13,675,000 interest; the John E. Warthen Family Trust as to
an undivided $355,000/$13,675,000 interest; John Merrill Warthen Family Trust as
to an undivided  $250,000/$13,675,000 interest; Rebecca Warthen, a
single woman, as to an undivided $120,000/$13,675,000 interest; and the Linda M.
Tucker Trust as to an undivided $200,000/$13,675,000 interest (hereinafter
called the "Beneficiaries") and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the undersigned
(hereinafter called Guarantor) hereby  unconditionally guarantees and
promises to pay to Beneficiaries, or order, on demand, in lawful money of the
United States, any and all Indebtedness of Company.  The word
"Indebtedness" means any and all debts, obligations and liabilities of the
Company whether Company may be liable individually or jointly with others, or
whether recovery upon such Indebtedness may be, or hereafter becomes, barred by
any statute of limitations, or whether such Indebtedness may be, or hereafter
becomes, otherwise unenforceable, together with all interest thereon and all
penalties, fees and expenses, including all attorneys' fees and legal expenses
paid or incurred by Beneficiaries in connection with any of the
foregoing.

    2.       The
Guarantor, agrees to pay all expenses, including all attorneys' fees and legal
expenses, paid or incurred by the Beneficiaries in endeavoring to collect the
guaranteed Indebtedness or any part thereof and in enforcing this
Guaranty.

    3.       This
Guaranty shall bind and obligate each of the undersigned, his heirs,
administrators, executors, legatees, devisees, personal representatives,
successors and assigns, jointly and severally, for the payment of said
Indebtedness precise as if the same had been contracted and was due and owing by
him personally.  All references herein to Company shall be deemed to
include any successor or successors, whether immediate or remote, to such
Company.  The obligations hereunder are joint and several and
independent of the obligations of Company and a separate action or actions may
be brought and prosecuted against the Guarantor regardless of whether an action
is brought against Company or whether Company may be joined in any such action
or actions; and Guarantor waives the benefit of any statute of limitations
affecting his liability hereunder or the enforcement
hereof.  Guarantor further waives the benefit of any statute which may
require that an action be brought against the Company.

    4.       This
Guaranty in all respects shall be an absolute and unconditional Guaranty, and
shall remain in full force and effect (notwithstanding, without limitation, the
death, incompetency or dissolution of the Guarantor or that at any time
or  from time to time all Indebtedness may have been paid in
full).

    5.       Guarantor
further agrees that if at any time all or any part of any payment theretofore
applied by the Beneficiaries to any of the Indebtedness is or must be rescinded
or returned to the Beneficiaries for any reason whatsoever (including, without
limitation, the insolvency, bankruptcy or reorganization of any Company) such
Indebtedness shall, for the purposes of this Guaranty, be deemed to have
continued in existence, notwithstanding such application by the Beneficiaries,
to the extent that such payment is or must be rescinded or returned, and this
Guaranty shall continue to be effective or be reinstated, as the case may be, as
to such Indebtedness, all as though such application by the Beneficiaries had
not been made.

    6.       Guarantor
hereby authorizes Beneficiaries, in its sole discretion, from time to time and
at any time, whether before or after any discontinuance of this Guaranty,
without notice to Guarantor hereunder, to take any or all of the following
actions: (a) renew, compromise, extend, accelerate or otherwise change the time
for payment or the terms of any of the Indebtedness, including increase or
decrease of the rate of interest thereon; (b) retain or obtain a security
interest in any property to secure any of the Indebtedness or this Guaranty; (c)
apply such property and direct the order or manner of sale thereof as
Beneficiaries, in its sole discretion, may determine; (d) retain or obtain the
primary or secondary obligation of any obligor or obligors, in addition to the
Guarantor, with respect to any of the Indebtedness; (e) extend or renew for one
or more periods (whether or not longer than the original period), alter or
exchange any of the Indebtedness or release or compromise any obligation of the
Guarantor hereunder or any obligation of any nature of any other obligor with
respect to any of the Indebtedness; (f) release its security interest in, or
surrender, release or permit any substitution or exchange for, all or any part
of any property securing any of the Indebtedness or this Guaranty, or extend or
renew for one or more periods (whether or not longer than the original period)
or release, compromise, alter or exchange any obligations of any nature of any
obligor with respect to any such property; and (g) resort to the Guarantor for
payment of any or all of the Indebtedness, whether or not the Beneficiaries
shall have resorted to any property securing any of the Indebtedness or this
Guaranty or shall have proceeded against the  Guarantor or any other
obligor primarily or secondarily obligated with respect to any of the
Indebtedness.

    7.       Guarantor
waives any right to require Beneficiaries to proceed against or exhaust any
security pledged by Company, Guarantor or any other obligors or to pursue any
other remedy whatsoever.  Guarantor further hereby waives: (a) notice
of the creation, existence, or non-payment of all or any part of the
Indebtedness; (b) notice of the acceptance by the Beneficiaries of the Guaranty;
(c) presentment, demand, notice of dishonor, protest and all other notices
whatsoever; (d) any and all defenses to Company's liability for the full and
complete repayment of the entire Indebtedness; and (d) all diligence in the
collection or protection of or realization upon the Indebtedness or any part
thereof, any obligation hereunder or any security for any of the
foregoing.

    8.       Any
amounts received by Beneficiaries from whatsoever source on account of the
Indebtedness may be applied by it toward the payment of such of the
Indebtedness, and in such order of application, as Beneficiaries may from time
to time elect.  Notwithstanding any payments made by or for the
account of Guarantor pursuant to this Guaranty, Guarantor hereby waives, to the
fullest extent permitted by law, any and all rights of subrogation in the
Collateral until such time as Beneficiaries shall have received payment in full
of all the Indebtedness.  Rights of subrogation arising by reason of
partial payments of the Indebtedness: (i) shall be limited to an interest in
cash proceeds in excess of the Indebtedness actually received by Beneficiaries,
which proceeds may be withheld from return, repayment or rescission and which
proceeds may be withheld from Guarantor for a period not in excess of 100 days
from the later of the date of such partial payment or payment in full of the
Indebtedness; (ii) shall be subject and subordinate to Beneficiaries' prior
right to receive payment in full of the Indebtedness; and (iii) may be refused
by Beneficiaries if the proposed payment would give rise to rights of
subrogation in the Indebtedness or the collateral security therefor which, in
Beneficiaries' sole and absolute discretion, would affect in any manner
whatsoever Beneficiaries' ability to exercise exclusive control over the
application of such collateral to the Indebtedness.  Guarantor further
agrees that any rights of subrogation to which he may be entitled hereby or by
operation of law and which are not effectively waived hereunder shall be subject
to Beneficiaries' rights to deal with the collateral in any manner permitted
hereby or by law, and Beneficiaries shall have no liability and no fiduciary
obligation to Guarantor nor  shall Beneficiaries' recourse hereunder
be impaired in any manner whatsoever by reason of Beneficiaries' exercise of its
rights and remedies granted in any document evidencing or securing the
Indebtedness or permitted hereunder or by applicable law with respect to the
collateral, notwithstanding the fact that exercise of such rights by
Beneficiaries may decrease the value of such collateral, render it valueless or
make it otherwise unavailable.

    9.       No
delay on the part of the Beneficiaries in the exercise of any right or remedy
shall operate as a waiver thereof, and no single or partial exercise by the
Beneficiaries of any right or remedy shall preclude other or further exercise
thereof or the exercise of any other right or remedy; nor shall any modification
or waiver of any of the provisions of this Guaranty be binding upon the
Beneficiaries except as expressly set forth in writing duly signed and delivered
on behalf of the Beneficiaries.  No action of the Beneficiaries
permitted hereunder shall in any way affect or impair the rights or the
Beneficiaries or the obligations of the Guarantor under this
Guaranty.

    10.              The
Beneficiaries may, from time to time, whether before or after any discontinuance
of this Guaranty, and without notice to the Guarantor, assign or transfer any or
all of the Indebtedness or any interest therein; and notwithstanding any such
assignment or transfer, or any subsequent assignment or transfer thereof, such
Indebtedness shall be and remain Indebtedness for the purpose of this Guaranty,
and each and every immediate and successive assignee, or transferee of any of
the Indebtedness or of any interest therein, shall, to the extent of the
interest of such assignee or transferee in the Indebtedness, be entitled to the
benefits of this Guaranty to the same extent as if such assignee or transferee
were the Beneficiaries; provided, however, that unless the Beneficiaries shall
otherwise consent in writing, the Beneficiaries shall have an unimpaired right
prior and superior to that of any such assignee or transferee, to enforce this
Guaranty for the benefit of the Ban, as to that portion of the Indebtedness
which the Beneficiaries has not assigned or transferred.

    11.              Guarantor
hereby grants to Beneficiaries a lien upon, a security interest in, and a right
of set-off against, any and all monies, credits, securities and other property
of Guarantor of every kind and description now or hereafter in the possession or
control of or on deposit with Beneficiaries, or with any agent or bailee for the
Beneficiaries, whether held in a general or special account or deposit, or for
safekeeping or otherwise; and every such lien, security interest and right of
set-off may be exercised without demand upon, or notice to, any
Guarantor.  No lien, security interest or right of set-off shall be
deemed to have been waived by any act or conduct on the part of the
Beneficiaries, or by any neglect to exercise such right of set-off, or to
enforce such lien or security interest, by any delay in so doing, and every
right of set-off and lien shall continue in full force and effect until such
right of set-off or lien is specifically waived or released by an instrument in
writing executed by Beneficiaries.  Guarantor acknowledges that any
and all monies, negotiable instruments, documents of title, securities, deposit
accounts, and other cash equivalents in which the Beneficiaries has hereby been
given a lien upon, security interest in and right to set-off against, shall
constitute and be treated as "cash collateral" as defined in the Beneficiaries
Reform Act of 1978, as such may be amended from time to
time.  Guarantor further acknowledges that the lien, security interest
and right of set-off granted hereunder is in addition to all liens and rights of
set-offs otherwise available at either law or equity against the monies,
securities and other property of Guarantor.

    12.              The
Guaranty is exclusive and cumulative as to amounts and shall not serve to revoke
or alter or any other form of Guaranty previously delivered to Beneficiaries or,
unless otherwise specifically provided in writing at the date and execution
thereof, be revoked by any Guaranty subsequently delivered to
Beneficiaries.  This Guaranty does not in any manner whatsoever limit
the amount of any borrowing heretofore or hereafter made under any other
financing arrangement with any of the Company, the Guarantor or with any third
parties.

    13.              Any
married person who signs this Guaranty hereby expressly agrees that recourse may
be had against his/her separate and community property for all his/her
obligations under this Guaranty.

    14.              Each
Guarantor agrees that this Guaranty is binding upon him/her/it, without the
signature of any other person, or the existence of any other
Guaranty.

    15.              The
creation or existence from time to time of Indebtedness in excess of the amount
to which the right of recovery under this Guaranty is limited is hereby
authorized, without notice to any Guarantor, and shall in no way affect or
impair the rights of the Beneficiaries and the obligations of any Guarantor
under this Guaranty.

    16.              In
all cases where there is but a single Guarantor, all words used herein in the
plural shall be deemed to have been used in the singular where the context and
construction so require; and when there is more than one Borrower named herein,
or when this Guaranty is executed by more than one Guarantor, the word "Company"
and the word "Guarantors" respectively, shall mean all and any one or more of
them.

    17.              This
Guaranty shall be governed by and construed under the laws of the State of
Nevada.  Whenever possible, each provision of this Guaranty shall be
interpreted in such manner as to be effective and valid under said laws;
provided, however, if any provision of this Guaranty shall be held to be
prohibited or invalid under applicable law, such provision shall be ineffective
only to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this
Guaranty.

    18.              Beneficiaries
shall have the sole and absolute right to refuse tender of any partial
payment(s) hereunder.  In the event Beneficiaries accepts any partial
payment(s) it shall not be deemed to be a waiver of or forgiveness of any other
amount(s) for which Guarantor is obligated to Beneficiaries.

    19.              Guarantor
acknowledges and agrees that any defense of Company which may be asserted
against Beneficiaries by Guarantor (whether by operation of law or otherwise)
shall be subject to such defenses and/or counterclaims which Beneficiaries may
have against Company with respect thereto, and, further, may be waived, released
or otherwise discharged by act or omission of Company (including Company'
written release) without Guarantor’s consent.

    20.              Guarantor
acknowledges and agrees that, upon satisfaction in full of the Indebtedness
(which may include, at Beneficiaries' option, a written release of Beneficiaries
by Company from any further liability, demand or claim under the documents
evidencing or securing the Indebtedness), Guarantor's rights of subrogation in
the Indebtedness or the collateral security therefor may be satisfied by
Beneficiaries' assignment to Guarantor of such Indebtedness and rights in such
of the collateral, if any, as may still secure the Indebtedness, which
assignment may be, at Beneficiaries' option, without recourse, representation or
warranty of any kind whatsoever.  The Guarantor shall not be
subrogated to any rights of the Beneficiaries including but not limited to the
right to acquire an interest in any security agreements or security for the
Indebtedness, until such time as the Beneficiaries shall receive payment of the
full amount of all Indebtedness and full performance of all obligations of the
Guarantor hereunder and this Guaranty shall have been satisfied as to the
Guarantor.

    21.              If
there is more than one Guarantor, surety or other obligor (other than Company)
of the Indebtedness, Beneficiaries may accept payments from all or any of such
persons without notice to Guarantor.  Beneficiaries shall have no
responsibility to determine the relative interests or priorities among any
paying Guarantor, surety or other obligor.  In the event payment is
made by more than one such person Beneficiaries, at its option, shall have the
right to refrain from taking any of such persons executed and deliver to
Beneficiaries a written consent to Beneficiaries' release of funds, documents
and instruments in its possession to which subrogation other obligors or to a
court of competent jurisdiction, in any interpleader action, and upon such
delivery, from which Beneficiaries may withhold its costs, including reasonable
attorneys' fees, arising in connection with enforcement or exercise of such
subrogation rights.  Beneficiaries shall have no further liability to
any such Guarantors, sureties or other obligors.

    22.              Guarantor
acknowledges and agrees that unless he is otherwise notified in writing by a
paying Guarantor, surety or other obligor prior to Beneficiaries' receipt of
payment or performance of the Indebtedness, all payments and performance by such
persons on account of the Indebtedness shall be conclusively presumed to be
payment or performance on behalf of Company pursuant to the documents evidencing
and securing the Indebtedness, rather than pursuant to this
Guaranty.

    23.              WAIVER
of Provisions of N.R.S. 40.430, the Nevada "one-action rule." Guarantor,
pursuant to N.R.S. 40.495, hereby expressly waives the provisions of N.R.S.
40.430.

    24.              Any
notice or communication made under the Guaranty or required to be made by
Beneficiaries, its successors and assigns, any Trustee under any Deed of Trust,
any Trustee in Beneficiaries or the like, shall be made to the last address
given by the Guarantor to the Beneficiaries officer responsible for the
Indebtedness hereby guaranteed.

    IN
WITNESS WHEREOF the undersigned Guarantor has executed and delivered this
Guaranty this 17th day of
September, 2007.

    

    
      	
               

              NOTICE TO
      GUARANTOR

               

              You
      are being asked to guarantee the debt of the Company listed in this
      document.  Think carefully before you do.  If the
      Company does not pay the debt, you will have to.  Be sure you
      can afford to pay if you have to, and that you want to accept this
      responsibility.

              You
      may have to pay up to the full amount of the debt if the Company does not
      pay.  You may also have to pay late fees or collection costs,
      which increases this amount.

              The
      creditor can collect this debt from you without first trying to collect
      from the Company.  The creditor can use the same collection
      methods against you that can be used against the Company, such as suing
      you, garnishing your wages, etc. if this debt is ever in default, that
      fact may become a part of your credit
      record.

              CAUTION:  IT
      IS IMPORTANT THE GUARANTOR THOROUGHLY READS THIS NOTICE BEFORE
      SIGNING

            

    

    

    Desert
Capital REIT, INC

    A
Maryland Corporation

    

    

            BY:
/s/Todd Parriott

                Todd
Parriott, President CEO

        Address for
Notice: 1291 Galleria
Dr, Ste 200 Henderson,
NV  89014

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