UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT PURSUANT
TO
SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of report (Date of earliest event
reported): November 13, 2009
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Desert
Capital REIT, Inc.
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(Exact
Name of Registrant as Specified in
Its Charter)
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Maryland
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(State
or Other Jurisdiction of Incorporation)
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0-51344
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20-0495883
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(Commission
File Number)
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(IRS
Employer Identification No.)
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1291
W. Galleria Drive, Suite 200, Henderson, Nevada
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89014
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(800) 659-3849
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(Registrant's
Telephone Number, Including Area Code)
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NONE.
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(Former
Name or Former Address, if Changed Since Last
Report)
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Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions (see General Instruction A.2.
below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01 Entry
into a Material Definitive Agreement.
3MO,
LLC (“3MO”), an indirect wholly owned subsidiary of Desert Capital REIT, Inc.
(the “Company”), entered into a Lease (the “Lease”) with Vegas Valley Food &
Beverage, LLC (“Vegas Valley”) effective as of November 16,
2009.
The
Lease covers certain land and a building owned by 3MO and located in Las Vegas,
Nevada (the “Premises”) as well as all tangible and intangible assets used in
connection with the operation of the business at the Premises. The
Lease has a term of four years commencing on November 16, 2009, the effective
date of the Lease. Base rent payable under the Lease by Vegas Valley
is equal to $40,000 per month. In addition to base rent, Vegas Valley
is also required to pay monthly percentage rent in an amount equal to 30% of the
Net Profits (as such term is defined in the Lease) generated from Vegas Valley’s
business operations at the Premises. On the first anniversary of the
commencement date of the Lease, Vegas Valley is also required to pay 3MO
$100,000 as additional rent. The Lease is a triple net lease with
Vegas Valley also being responsible for payment of all insurance, taxes, repairs
and maintenance and utilities. Pursuant to the terms of the Lease,
Vegas Valley has been granted an option to purchase the Premises, beginning on
the first date of the Lease and ending ninety (90) days prior to the end of the
term. If Vegas Valley exercises the purchase option, the purchase
price for the Premises shall be $10,000,000. During the term of the
Lease, if 3MO desires to sell or convey the Premises, or any portion thereof, to
a third party, Vegas Valley has a right of first refusal to purchase all or such
portion of the Premises on terms no less favorable than those offered by the
third party.
3MO
and Vegas Valley also entered into an Addendum to the Lease stating that the
parties will enter into a Management Agreement pursuant to which Vegas Valley
will manage the business at the Premises and be responsible for all expenses
incurred in connection with the operation of the business at the
Premises.
Item
3.01 Material
Modification to Rights of Security Holders.
On November 13, 2009, the Board of Directors of the Company adopted an Amended and Restated Limited Right of Redemption Upon Death of a Stockholder by the Estate of the Stockholder Plan (the “Redemption Plan”). The Redemption Plan places the following limitations on the Company’s obligation to redeem shares of the Company’s common stock upon the death of any registered owner of shares of common stock:
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The
Company will only redeem shares with a total redemption price of up to
$100,000 per natural person on a one time
basis.
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In
any one calendar year, the Company will only redeem shares for an
aggregate redemption price of
$2,000,000.
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The
annual aggregate redemption limitation is not
cumulative.
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The
Company will only redeem shares four times each
year.
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The
Company’s obligation to redeem any shares is subject to its availability
of cash for such purpose as determined by the Board of Directors of the
Company and the requirements of applicable
law.
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The
Board of Directors of the Company may amend or suspend this limited right
of redemption.
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In order to redeem shares under the Redemption Plan, the Company’s transfer agent must receive:
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A
written request for redemption signed by the personal representative or
surviving joint tenant(s) of the registered owner within 180 days of the
death of the registered owner;
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Notice
of the number of shares to be
redeemed;
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Appropriate
evidence of death and ownership of such shares at death;
and
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Appropriate
evidence of the authority of such personal representative or surviving
joint tenant(s) to sell the shares.
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Any
redemption will be made in cash. If the Company is then conducting an offering
of common stock, the redemption price will be the current offering price or the
actual purchase price, whichever is less, plus accrued and unpaid dividends.
During periods when the Company is not engaged in an offering of common stock,
the redemption price will be the net asset value as of the end of the most
recent fiscal quarter as determined by our Board of Directors.
Any shares that are not redeemed in any period because the aggregate limitation discussed above, will be held for redemption in subsequent periods until such shares are redeemed.
The Redemption Plan will become effective 30 days from the date of adoption.
The Company is currently not making redemptions under the Redemption Plan.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Date: November
19, 2009
DESERT
CAPITAL REIT, INC.
By: /s/ Todd
B.
Parriott
Todd
B. Parriott
Chief
Executive Officer