DTLL
Exhibit
10.1
DTLL
March
15,
2006
Board
of
Directors
GRAND
SIERRA RESORTS
0000
Xxxx
Xxxxxx
Xxxxxxx
Heights MN 55126
RE:
Proposed Transaction
Dear
Members of the Board,
This
letter is to outline our intentions to enter into Share Exchange Agreements
(“Agreements”) with Grand Sierra Resorts (“GSR”) shareholders as follows:
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(1)
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Pursuant
to the terms and conditions of the Agreement, the holders of common
shares
will exchange $1.25 per share of GSR common stock in exchange for
newly
authorized DTLL Series A GSR Preferred as per the attached term
sheet.
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|
(2)
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DTLL
is highly confident that it has secured debt and equity financing
of at
least $135,000,000 to close the transaction to purchase the Xxxx
Xxxxxx
from Xxxxxx’x Entertainment on or before April 7,
2006.
|
|
(3)
|
DTLL
is highly confident that it has up to $2,600,000 available in a bridge
loan to pay for working capital requirements until closing of the
transaction.
|
|
(4)
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DTLL
will enter into two year management contracts with the designated
management team to implement the agreed upon business
plan.
|
We
look
forward to working with the company to close this transaction and agree to
keep
this offer open until 5 pm EST on Friday March 17, 2006.
Sincerely,
Dual
Xxxxxx
President
Destination
Travel Leisure International
0000
Xxxx 00xx
Xxxxxx, Xxxxx 0000, Xxxxxxxxxxx, XX 00000
-1-
TERM
SHEET
This
Term
Sheet summarizes the principal terms of the purchase by DTLL, Inc., a Minnesota
corporation (the “Company”)
of up
to one hundred percent (100%) of the common stock of Grand Sierra Resort Corp.,
a Nevada corporation (“GSRC”).
Any
purchase of GSRC’s common stock shall be made only pursuant to a mutually
acceptable share exchange agreement and related documentation executed by the
Company, GSRC and the selling shareholders. It
is
expressly understood that no liability or obligation of any nature whatsoever
is
intended to be created by this Term Sheet between the parties signing below,
except
as
otherwise indicated herein. The
Company reserves the right in its sole discretion to accept or reject this
transaction. This
Term
Sheet does evidence the good faith intention of the parties signing below to
proceed with the proposed transaction on the conditions and terms described
herein, subject to customary conditions, due diligence, legal review and
documentation that is satisfactory to the parties.
NON-BINDING
PROVISIONS
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Issuer:
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DTLL,
Inc.
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Securities
to be Issued by the Company:
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The
Company will issue one share of its Series A Preferred Equity Redeemable
Convertible Stock, (“Series
A Preferred”)
for every sixteen (16) shares of GSRC’s common stock which are exchanged.
|
|
Minimum/Maximum
Offering:
|
The
minimum number of shares of common stock of GSRC that the Company
will
purchase is fifty-one percent (51%) of its issued and outstanding
shares.
In the event that less than fifty-one percent (51%) of the shareholders
of
GSRC elect to exchange their shares for the Series A Preferred,
then the
Company will not issue any Series A Preferred and this offering
shall
terminate. The maximum number of shares that the Company will purchase
is
one hundred percent (100%) of the issued and outstanding shares
of common
stock of GSRC. The Company reserves the right to lower the minimum
percentage in its sole discretion.
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Closing:
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The
closing (the “Closing”)
shall occur on or before April 6, 2006 and at such time and place
as is
mutually agreed upon by the parties.
|
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Dividends:
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The
Series A Preferred will carry a 7% cumulative dividend compounded
annually, payable in cash or in kind, at the Company’s
option.
|
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Liquidation
Preference:
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Upon
liquidation, the holders of the Series A Preferred shall be entitled
to
receive, in preference to holders of other classes of common stock,
$50
per share plus accrued dividends. Thereafter, any proceeds available
for
distribution will be distributed pro rata to holders of common
stock.
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-2-
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Voting
Rights:
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The
holders of Series A Preferred shares shall be entitled to one vote
per
share in all matters upon which shareholders of the Company are
entitled
to vote. The Series A Preferred shareholders shall have the right
to
appoint three (3) of the seven (7) directors of the Company.
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|
Optional
Conversion:
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The
Series A Preferred shall be convertible 1:1 to common stock of
the Company
at any time at option of holder, subject to adjustments for stock
dividends, splits, combinations and similar events. The conversion
price
shall be based on the average of the price of the Company's stock
in the
10 consecutive trading days immediately preceding the date that
the
conversion notice is given by the holder.
|
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Mandatory
conversion:
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The
Company will have the ability to cause the Series A Preferred holders
to
convert their stock into common stock if (i) a registration statement
is
effective and available for use by the holders of the Series A
Preferred
on the date the conversion notice is given by the Company, and
(ii) the
closing price of the common stock exceeded 125% of the conversion
price
subject to adjustment based on the average price of the Company's
stock in
the 10 consecutive trading days immediately preceding the date
that the
conversion notice is given by the Company.
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Redemption
Rights:
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The
Series A Preferred shall be redeemable from funds legally available
for
distribution at the option of holders of at least 51%
of the Series A Preferred commencing any time after the third
anniversary of the Closing at a price of $30 per share of Series
A
Preferred, subject to adjustments. Upon such a redemption request,
the
shares of the holders of the Series A Preferred shares that requested
such
a redemption shall be redeemed.
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Undertaking
to Register the Shares:
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The
Company shall undertake and agree to use its best efforts to: (i)
file, as
soon as practicable the Closing, a registration statement with
the SEC in
order to register the shares of Common Stock issuable the upon
the
conversion of the Series A Preferred shares; and (ii) to cause
such
registration statement to become effective.
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|
Representations
and Warranties:
|
Standard
representations and warranties by the Company, GSRC and the shareholders
of GSRC shall be contained in the share exchange agreement and
related
transaction documents.
|
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Mandatory
Redemption Fund:
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Within
a reasonable time period after the Closing, the Company shall fund
a
mandatory redemption fund pursuant to which the Company shall pay
the
Series A Preferred shareholders a fixed price per share which shall
increase on each anniversary of the Closing.
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No
Partnership:
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Nothing
contained herein will be deemed to or construed by the parties
hereto or
by any third person to create the relationship of principal and
agent or
partnership or joint venture.
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-3-
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Term
and Termination:
|
Unless
extended by mutual agreement in writing of the parties, or earlier
terminated by mutual agreement in writing of the parties, the term
of this
Term Sheet shall be from the date hereof until the earliest of:
(i) ten
days after written notice given by the Company, GSRC or fifty percent
(50%) or more of the shareholders of GSRC; (ii) twenty-one (21)
days from
the date of this letter;
or
(iii) the date of execution by the parties of a definitive Securities
Purchase Agreement (the “Term”).
Upon any termination or expiration of this Term Sheet, none of
the
Company, GSRC, the shareholders of GSRC or their affiliates shall
have any
obligation or liability to any other party under this Term Sheet,
except
with respect to breaches that occurred during the Term. Notwithstanding
the foregoing, the provisions contained under the heading “Exclusivity”
and "No Trading DTLL Shares" shall survive any termination of this
Term
Sheet.
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BINDING
PROVISIONS
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Exclusivity:
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Without
the prior approval of the Company, for a period of twenty-one (21)
days
from the date set forth below neither GSRC nor any of GSRC's shareholders,
directors, principals, officers, employees, agents or representatives
will
solicit, knowingly encourage or entertain proposals from or enter
into
discussions or continue negotiations or discussions with or furnish
any
nonpublic information to any other person or entity regarding the
possible
sale of some or all of GSRC's stock, including and without limitation,
the
fact that such discussions are taking place and the status thereof
and the
terms and conditions of any transaction under consideration, other
than as
required by law. If this exclusivity agreement is breached, in
addition to
any other compensation for damages, GSRC and/or its shareholders,
jointly
and severally, shall promptly upon demand pay to the Company an
amount
equal to all expenses incurred by the Company in connection with
this
proposed transaction, including the expenses of their agents, advisors,
bankers, investment partners, attorneys, accountants and other
representatives. For purposes of clarification, GSRC and its shareholders
during the period outlined above, shall deal exclusively with the
Company
concerning the sale of the shares of common stock of GSRC and discontinue
any discussions with respect to any previously received third party
proposals with respect to the sale of such shares.
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No
Trading DTLL Shares:
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GSRC
and each GSRC shareholder hereby acknowledge that they are in receipt
of
“inside information” as such term is defined by applicable securities laws
and agree that they will not, individually or collectively, buy,
sell or
trade any shares of DTLL during the Term.
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[SIGNATURES
ARE ON THE FOLLOWING PAGE]
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Agreed
and accepted this
___
day of March, 2006
Grand
Sierra Resort Corp.,
a
Nevada corporation
By:
____________________
Its:____________________
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Agreed
and accepted this
___
day of March, 2006
DTLL,
Inc.,
a
Minnesota corporation
By:
______________________
Its:_______________________
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Shareholders
of Grand Sierra Resort Corp.,
a
Nevada
corporation
By:_________________________________
Printed
Name:________________________
By:_________________________________
Printed
Name:________________________
By:_________________________________
Printed
Name:________________________
By:_________________________________
Printed
Name:________________________
By:_________________________________
Printed
Name:________________________
By:_________________________________
Printed
Name:________________________
By:_________________________________
Printed
Name:________________________
By:_________________________________
Printed
Name:________________________
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