Exhibit No. 10.1

 

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITY LAWS. THESE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD,
PLEDGED, ASSIGNED OR OTHERWISE DISPOSED OF, AND NO TRANSFER OF THE SECURITIES
WILL BE MADE BY THE COMPANY OR ITS TRANSFER AGENT, IN THE ABSENCE OF SUCH
REGISTRATION OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.

 

WARRANT NO. 2006-

 

WARRANT FOR PURCHASE OF SHARES OF COMMON STOCK

OF

GRAND SIERRA RESORT CORP.

 

Dated: May 15, 2006

 

Dotronix, Inc. (the “Holder”), is entitled to purchase from Grand Sierra Resort
Corp., a Nevada corporation (the “Company”) with its principal place of business
at 2500 East Second Street, Reno, NV 89595 (the “Company”), up to Five Million
(5,000,000) shares of the Company’s common stock, $.001 par value (such class of
stock being hereinafter referred to as the “Common Stock” and such Common Stock
as may be acquired upon exercise hereof being hereinafter referred to as the
“Warrant Stock”), at a price of Forty Cents (40¢) per share (the “Warrant
Exercise Price”).

 

 

This Warrant is subject to the following provisions, terms and conditions:

 

1.           Unless otherwise decided in the sole discretion of the Company, the
Holder’s rights to acquire the Warrant Stock shall terminate immediately unless
the Holder exercises its rights under this Warrant as follows:

 

(a)          On or before May 26, 2006, the Holder shall exercise this Warrant
in part by paying Five Hundred Thousand Dollars ($500,000) to the Company to
acquire One Million Two Hundred Fifty Thousand (1,250,000) shares of Warrant
Stock. The remaining Warrant shall expire on the earlier of (i) June 22, 2006 or
(ii) the date of the closing of the purchase of the Reno Hilton Hotel by a
subsidiary of the Company if such closing occurs prior to any of the Exercise
Dates.

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(b)          The rights represented by this Warrant must be exercised by the
Holder by written notice of exercise delivered to the Company accompanied by the
surrender of this Warrant at the principal office of the Company and upon
payment to it, in cash, by certified check or wire transfer, of the Warrant
Exercise Price for such shares as set forth above. The Company agrees that the
Warrant Stock so purchased shall be and is deemed to be issued as of the close
of business on the date on which this Warrant shall have been surrendered and
payment made for such Warrant Stock as aforesaid. Certificates for the shares of
Warrant Stock so purchased shall be delivered to the Holder within thirty (30)
days after the rights represented by this Warrant shall have been so exercised.

 

2.           The Company covenants and agrees that all shares of Warrant Stock
that may be issued upon the exercise of this Warrant will, upon issuance, be
duly authorized and issued, fully paid and nonassessable and free from all liens
and encumbrances, with the exception of any taxes arising out of the exercise of
such Warrant, which taxes shall be payable by the Holder. The Company further
covenants and agrees that until expiration of this Warrant, the Company will at
all times have authorized, and reserved for the purpose of issuance or transfer
upon exercise of this Warrant, a sufficient number of shares of Common Stock to
provide for the exercise of this Warrant.

 

3.           This Warrant shall not entitle the Holder to any voting rights or
other rights as shareholders of the Company.

 

4.          The Holder, by acceptance hereof, represent and warrant that (a) the
Holder is acquiring this Warrant for its own account for investment purposes
only and not with a view to its resale or distribution and (b) the Holder has no
present intention to resell or otherwise dispose of all or any part of this
Warrant or any shares of the Warrant Stock, other than (i) with the Company’s
prior written consent and (ii) pursuant to registration under federal and state
securities laws or an exemption from such registration, the availability of
which the Company shall determine in its sole discretion. The Company may
condition such issuance or sale, pledge, assignment or other disposition on the
receipt from the party to whom this Warrant is to be so transferred or to whom
Warrant Stock is to be issued or so transferred of any representations and
agreements requested by the Company in order to permit such issuance or transfer
to be made pursuant to exemptions from registration under federal and applicable
state securities laws. Each certificate representing the Warrant (or any part
thereof) and any shares of Warrant Stock shall be stamped with appropriate
legends setting forth these restrictions on transferability. The Holder, by
acceptance hereof, agrees to give written notice to the Company before
exercising or transferring its Warrant or transferring any shares of Warrant
Stock of the Holder’s intention to do so, describing briefly the manner of any
proposed exercise or transfer. Within thirty (30) days after receiving such
written notice, the Company shall notify the Holder as to whether the Company
consents to such exercise or transfer and as to whether such exercise or
transfer may be effected. The Company makes no representation or warranty to the
Holder as to the availability of any exemptions under either state or federal
law should the Holder desire to transfer the Warrant or shares of Warrant Stock.
Such determination must be made by the Holder and by any transferee of the
Warrant Stock. The Company may request an opinion of counsel from the Holder
and/or the Holder’s transferee before allowing the issuance of a Stock
Certificate, or Certificates, evidencing the Warrant Stock, but the Company’s
failure to make such a request shall not be considered the Company’s
acknowledgment of the availability of state and/or federal exemptions relating
to such transfer of the Warrant Stock. This Warrant shall be transferable only
on the books of the Company by the Holder in person, or by duly authorized
attorney, on surrender of the Warrant, properly assigned.

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5.           Neither this Warrant nor any term hereof may be changed, waived,
discharged or terminated orally but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought.

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
authorized officer and to be dated as of the date set forth above.

 

 

 

 

GRAND SIERRA RESORT CORP.

 

 

 

 

By: 

/s/ Thomas Schrade

 

 

 

 

 

 

Its:

President

 

 

 

 

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