Exhibit 10.32

 

Exhibit A

 

NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON THE EXERCISE OF THIS
WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY STATE SECURITIES LAWS. NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (i)
EFFECTIVE REGISTRATION STATEMENTS RELATED THERETO, (ii) AN OPINION OF COUNSEL
FOR THE HOLDER, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATIONS
ARE NOT REQUIRED, (iii) RECEIPT OF NO-ACTION LETTERS FROM THE APPROPRIATE
GOVERNMENTAL AUTHORITIES, OR (iv) OTHERWISE COMPLYING WITH THE PROVISIONS OF
SECTION 7 OF THIS WARRANT.

 

DYNAMIC LEISURE CORPORATION

 

WARRANT TO PURCHASE SHARES

OF COMMON STOCK

3,000,000 Shares

THIS CERTIFIES THAT, for value received, the undersigned purchaser MMA Capital,
LLC, a Delaware Limited Liability Company, or its assigns (the “Holder”), is
entitled to purchase THREE MILLION (3,000,000) Shares of Common Stock (as
adjusted pursuant to Section 3 hereof) (“Shares”) of Dynamic Leisure
Corporation, a Minnesota corporation (the “Company”), at a price of One Dollar
Fifty Cents ($1.50 U.S.) per share (such price and such other price as shall
result, from time to time, from the adjustments specified in Section 3 hereof is
herein referred to as the “Exercise Price”), subject to the provisions and upon
the terms and conditions hereinafter set forth. As used herein, (a) the term
“Common Stock” shall mean the Company’s presently authorized Common Stock, and
any stock into or for which such Common Stock may hereafter be converted or
exchanged, and (b) the term “Date of Grant” shall mean March 5, 2007.

This Warrant is granted by the Company in accordance with the terms of the
Settlement Agreement dated March 5, 2007 (the “Agreement”) by and between the
Company and Holder of even date herewith. All terms of the Agreement, including,
but not limited to §§ 2(b) and 3(b) therein, are expressly incorporated herein.
Any capitalized terms not defined herein are ascribed the meaning given them in
the Agreement.

 

Notwithstanding anything to the contrary in this Warrant, this Warrant shall
automatically terminate and expire unless exercised on or prior to 5:00 p.m.
(Delaware Time) three (3) years from the Date of Grant.

 

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1.

Method of Exercise: Payment.

 

(a)          Mechanics of Exercise. Subject to the terms and conditions hereof,
this Warrant may be exercised by the Holder on any day on or after the date
hereof, in whole or in part, by (i) delivery of a written notice, in the form
attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election
to exercise this Warrant and (ii) (A) payment to the Company of an amount equal
to the applicable Exercise Price multiplied by the number of Warrant Shares as
to which this Warrant is being exercised (the “Aggregate Exercise Price”) in
cash or wire transfer of immediately available funds or (B) by notifying the
Company that this Warrant is being exercised pursuant to a Cashless Exercise (as
defined in Section 1(g)). Upon exercise in full of this Warrant, the Holder
shall deliver the original Warrant in order to effect an exercise hereunder, or,
in the alternative, an affidavit of lost instrument in form reasonably
satisfactory to the Company. Execution and delivery of the Exercise Notice with
respect to less than all of the Warrant Shares shall have the same effect as
cancellation of the original Warrant and issuance of a new Warrant evidencing
the right to purchase the remaining number of Warrant Shares.

 

(b)          Share Delivery. On or before the first business day following the
date on which the Company has received each of the Exercise Notice and the
Aggregate Exercise Price (or notice of a Cashless Exercise) (the “Exercise
Delivery Documents”), the Company shall transmit by facsimile an acknowledgment
of confirmation of receipt of the Exercise Delivery Documents to the Holder and
the Company’s transfer agent (the “Transfer Agent”). On or before the fifth
business day following the date on which the Company has received all of the
Exercise Delivery Documents (the “Share Delivery Date”), the Company shall (X)
provided that the Transfer Agent is participating in The Depository Trust
Company (“DTC”) Fast Automated Securities Transfer Program and if the Holder is
entitled to receive shares not bearing a legend pursuant to Section 6 of the
Subscription Agreement, upon the request of the Holder, credit such aggregate
number of shares of Common Stock to which the Holder is entitled pursuant to
such exercise to the Holder’s or its designee’s balance account with DTC through
its Deposit Withdrawal Agent Commission system, or (Y) if the Transfer Agent is
not participating in the DTC Fast Automated Securities Transfer Program or the
Holder is not entitled to receive shares not bearing a legend, issue and
dispatch by overnight courier to the address as specified in the Exercise
Notice, a certificate, registered in the Company’s share register in the name of
the Holder or its designee, for the number of shares of Common Stock to which
the Holder is entitled pursuant to such exercise.

 

(c)          Holder. Upon delivery of the Exercise Notice and Aggregate Exercise
Price referred to in Section 1(a) above or notification to the Company of a
Cashless Exercise referred to in Section 1(g) below, the Holder shall be deemed
for all corporate purposes to have become the holder of record of the Warrant
Shares with respect to which this Warrant has been exercised, irrespective of
the date of delivery of the certificates evidencing such Warrant Shares.

 

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(d)          Partial Exercise. If this Warrant is submitted in connection with
any exercise pursuant to Section 1(a) and the number of Warrant Shares
represented by this Warrant submitted for exercise is greater than the number of
Warrant Shares being acquired upon an exercise, then the Company shall as soon
as practicable and in no event later than three business days after any exercise
and at its own expense, issue a new Warrant representing the right to purchase
the number of Warrant Shares purchasable immediately prior to such exercise
under this Warrant, less the number of Warrant Shares with respect to which this
Warrant is exercised.

 

(e)          Taxes. The Company shall pay any and all stamp taxes which may be
payable with respect to the issuance and delivery of Warrant Shares upon
exercise of this Warrant. The Holder shall pay any and all franchise, income or
similar taxes payable with respect to the exercise of the Warrant Shares.

 

(f)           Company’s Failure to Timely Deliver Securities. If the Company
shall fail for any reason or for no reason to issue to the Holder within five
(5) business days of receipt of the Exercise Delivery Documents, a certificate
for the number of shares of Common Stock to which the Holder is entitled and
register such shares of Common Stock on the Company’s share register or to
credit the Holder’s balance account with DTC for such number of shares of Common
Stock to which the Holder is entitled upon the Holder’s exercise of this
Warrant, then, in addition to all other remedies available to the Holder, the
Company shall pay in cash to the Holder on each day after such fifth business
day that the issuance of such shares of Common Stock is not timely effected an
amount equal to two percent (2%) of the product of (A) the sum of the number of
shares of Common Stock not issued to the Holder on a timely basis and to which
the Holder is entitled and (B) the closing sale price of the shares of Common
Stock on the trading day immediately preceding the last possible date which the
Company could have issued such shares of Common Stock to the Holder without
violating Section 1(b).

 

(g)         Cashless Exercise. Notwithstanding anything contained herein to the
contrary, if following one hundred eighty (180) days after the date of issuance
of this Warrant a registration statement covering the Warrant Shares that are
the subject of the Exercise Notice (the “Unavailable Warrant Shares”) is not
available for the resale of such Unavailable Warrant Shares, the Holder may, in
its sole discretion, exercise this Warrant in whole or in part and, in lieu of
making the cash payment otherwise contemplated to be made to the Company upon
such exercise in payment of the Aggregate Exercise Price, elect instead to
receive upon such exercise the “Net Number” of shares of Common Stock determined
according to the following formula (a “Cashless Exercise”):

 

 

Net Number = (A x B) - (A x C)

 

B

 

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For purposes of the foregoing formula:

 

A= the total number of shares with respect to which this Warrant is then being
exercised.

 

B= the closing sale price of the shares of Common Stock (as reported by
Bloomberg) on the date immediately preceding the date of the Exercise Notice.

 

C= the Exercise Price then in effect for the applicable Warrant Shares at the
time of such exercise.

 

2.           Stock Fully Paid: Reservation of Shares. All Shares that may be
issued upon the exercise of the rights represented by this Warrant will, upon
issuance pursuant to the terms and conditions herein, be fully paid and
nonassessable, and free from all taxes, liens and charges with respect to the
issue thereof, except as set forth in the Company’s Articles of Incorporation or
Bylaws and other than the restrictions on transfer contained in this Agreement
and under applicable state and federal securities laws. During the period within
which the rights represented by this Warrant may be exercised, the Company will
at all times have authorized, and reserved for the purpose of the issue upon
exercise of the purchase rights evidenced by this Warrant, a sufficient number
of shares of its Common Stock to provide for the exercise of the rights
represented by this Warrant.

 

3.          Adjustment of Exercise Price and Number of Shares. The number and
kind of securities purchasable upon the exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:

 

(a)         Reclassification or Merger. In case of any reclassification, change
or conversion of securities of the class issuable upon exercise of this Warrant
(other than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination), or in
case of any merger of the Company with or into another corporation (other than
(i) a merger in which the stockholders of the Company prior to the transaction
continue to hold at least fifty percent (50%) of the voting power of the
successor corporation following the transaction in the same relative
proportions, or (ii) a merger with another corporation in which the Company is
the acquiring and the surviving corporation and which does not result in any
reclassification or change of outstanding securities issuable upon exercise of
this Warrant), or in case of any sale of all or substantially all of the assets
of the Company, the Company, or such successor or purchasing corporation, as the
case may be, shall duly execute and deliver to the Holder of this Warrant a new
Warrant (in form and substance reasonably satisfactory to the Holder of this
Warrant), so that the Holder of this Warrant shall have the right to receive, at
a total purchase price not to exceed that payable upon the exercise of the
unexercised portion of this Warrant, and in lieu of the shares of

 

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Common Stock theretofore issuable upon exercise of this Warrant, the kind and
amount of shares of stock, other securities, money and property receivable upon
such reclassification, change or merger by a holder of the number of shares of
Common Stock then purchasable under this Warrant. Such new Warrant shall provide
for adjustments that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 3. The provisions of this subparagraph
(a) shall similarly apply to successive reclassifications, changes, mergers,
consolidations and transfers.

 

(b)         Subdivision or Combination of Shares. If the Company at any time
while this Warrant remains outstanding and unexpired shall subdivide, by split
or otherwise, or combine its outstanding shares of Common Stock, the Exercise
Price shall be proportionately decreased in the case of a subdivision or
increased in the case of a combination, effective at the close of business on
the date the subdivision or combination becomes effective. When any adjustment
is required to be made to the Exercise Price, the number of shares issuable upon
the exercise of this Warrant shall be changed to the number determined by
dividing (i) an amount equal to the number of shares issuable upon the exercise
of this Warrant immediately prior to such adjustment, multiplied by the Exercise
Price in effect immediately prior to such adjustment, by (ii) the Exercise Price
in effect immediately after such adjustment, such that the aggregate purchase
price payable for the total number of shares purchasable under this Warrant (as
adjusted) shall remain the same.

 

(c)         Adjustment upon Issuance of Common Stock. If and whenever on or
after the Date of Grant the Company issues or sells, or in accordance with this
Section 3 is deemed to have issued or sold, any shares of Common Stock
(including the issuance or sale of shares of Common Stock owned or held by or
for the account of the Company for a consideration per share (the “New Issuance
Price”) less than a price (the “Applicable Price”) equal to the Exercise Price
in effect immediately prior to such issue or sale or deemed issuance or sale
(the foregoing, a “Dilutive Issuance”), other than:

 

i)            up to three (3) million shares of Common Stock and options,
warrants or other rights to purchase Common Stock in any twelve (12) month
period issued to employees, officers or directors of, or consultants or advisors
to the Corporation or any subsidiary pursuant to restricted stock purchase
agreements, stock option plans or similar arrangements (as adjusted for any
stock dividend, stock split, combination of shares, reorganization,
recapitalization, reclassification or other similar event. (a
“Recapitalization”));

 

ii)           shares of Common Stock issued upon the exercise or conversion of
options or convertible securities outstanding as of the date of this Warrant;

 

iii)         shares of Common Stock issued or issuable pursuant to the
acquisition of another corporation by the Company by merger, purchase of
substantially all of the assets or other reorganization or to a joint venture
agreement, provided, that such issuances are approved by the Board of Directors;

 

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iv)          shares of Common Stock issued or issuable to banks, equipment
lessors or other commercial financial institutions pursuant to a commercial debt
financing or commercial leasing transaction approved by the Board of Directors;

 

v)           up to two (2) million shares of Common Stock issued or issuable in
any twelve (12) month period in connection with any settlement of any action,
suit, proceeding or litigation approved by the Board of Directors;

 

vi)          shares of Common Stock issued or issuable in connection with
sponsored research, collaboration, technology license, development, OEM,
marketing or other similar agreements or strategic partnerships approved by the
Board of Directors; and

 

vii)        shares of Common Stock issued or issuable to suppliers or third
party service providers in connection with the provision of goods or services
pursuant to transactions approved by the Board of Directors;

 

then immediately after such Dilutive Issuance the Exercise Price, but not the
number of Warrant Shares, then in effect shall be reduced to an amount equal to
the New Issuance Price. The number of Warrant Shares shall not be subject to
adjustment pursuant to this Section 3(c).

 

(d)         Other Events. If any event occurs of the type contemplated by the
provisions of this Section 3(c) but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the
Company’s Board of Directors will make an appropriate adjustment in the Exercise
Price so as to protect the rights of the holder of this Warrant; provided that
no such adjustment pursuant to this Section 3 will increase the Exercise Price
or decrease the number of Warrant Shares.

 

4.           Notice of Adjustments. Whenever the Exercise Price or the number of
Shares purchasable hereunder shall be adjusted pursuant to Section 3 hereof, the
Company shall make a certificate setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated, and the Exercise Price and the number of Shares
purchasable hereunder after giving effect to such adjustment, which shall be
mailed by first class mail, postage prepaid, to the Holder of this Warrant.

 

5.          Fractional Shares. No fractional shares of Common Stock will be
issued in connection with any exercise hereunder, but in lieu of such fractional
shares, the Company shall make a cash payment therefor based on the fair market
value of the Common Stock on the date of exercise as reasonably determined in
good faith by the Company’s Board of Directors.

 

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6.           Non-Circumvention. The Company hereby covenants and agrees that the
Company will not, by amendment of its Certificate of Incorporation or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities, or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant, and
will at all times in good faith carry out all the provisions of this Warrant and
take all action as may be required to protect the rights of the holder of this
Warrant. Without limiting the generality of the foregoing, the Company (i) will
not increase the par value of any shares of Common Stock receivable upon the
exercise of this Warrant above the Exercise Price then in effect, (ii) will take
all such actions as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable shares of Common
Stock upon the exercise of this Warrant, and (iii) will, so long as any of the
Warrants are outstanding, take all action necessary to reserve and keep
available out of its authorized and unissued Common Stock, solely for the
purpose of effecting the exercise of the Warrants, 100% of the number of shares
of Common Stock as shall from time to time be necessary to effect the exercise
of the Warrants then outstanding (without regard to any limitations on
exercise).

 

 

7.

Compliance with Securities Act: Disposition of Warrant or Shares.

 

(a)         Compliance with Securities Act. The Holder of this Warrant, by
acceptance hereof, agrees that this Warrant, and the shares of Common Stock to
be issued upon exercise hereof are being acquired for investment and that such
Holder will not offer, sell or otherwise dispose of this Warrant, or any shares
of Common Stock to be issued upon exercise hereof except under circumstances
which will not result in a violation of the Securities Act of 1933, as amended
(the “Act”). Upon exercise of this Warrant, unless the Shares being acquired are
registered under the Act or an exemption from such registration is available,
the Holder hereof shall confirm in writing, by executing the form attached as
Schedule 1 to Exhibit A hereto, that the shares of Common Stock so purchased are
being acquired for investment and not with a view toward distribution or resale.
This Warrant and all shares of Common Stock issued upon exercise of this Warrant
(unless registered under the Act) shall be stamped or imprinted with a legend in
substantially the following form:

 

“THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. NO SALE OR DISPOSITION
MAY BE EFFECTED WITHOUT (i) EFFECTIVE REGISTRATION STATEMENTS RELATED THERETO,
(ii) AN OPINION OF COUNSEL FOR THE HOLDER, REASONABLY SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATIONS ARE NOT REQUIRED, (iii) RECEIPT OF NO-ACTION
LETTERS FROM THE APPROPRIATE GOVERNMENTAL AUTHORITIES, OR (iv) OTHERWISE
COMPLYING WITH THE PROVISIONS OF SECTION 7 OF THE WARRANT UNDER WHICH THESE
SECURITIES WERE ISSUED, DIRECTLY OR INDIRECTLY.”

 

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In addition, in connection with the issuance of this Warrant, the Holder
specifically represents to the Company by acceptance of this Warrant as follows:

 

(i)         The Holder is acquiring this Warrant for its own account for
investment purposes only and not with a view to, or for the resale in connection
with, any “distribution” thereof for purposes of the Act.

 

(ii)        The Holder understands that this Warrant and any securities issuable
upon the exercise hereof might not have not been registered under the Act in
reliance upon a specific exemption therefrom, which exemption depends upon,
among other things, the bona fide nature of the Holder’s investment intent as
expressed herein. In this connection, the Holder understands that, in the view
of the Securities and Exchange Commission (the “SEC”), the statutory basis for
such exemption may be unavailable if the Holder’s representation was predicated
solely upon a present intention to hold the Warrant for the minimum capital
gains period specified under tax statutes, for a deferred sale, for or until an
increase or decrease in the market price of the Warrant, or for a period of one
year or any other fixed period in the future.

 

(iii)       The Holder further understands that this Warrant and any securities
issuable upon the exercise hereof must be held indefinitely unless subsequently
registered under the Act and any applicable state securities laws, or unless
exemptions from registration are otherwise available.

 

(iv)       The Holder is aware of the provisions of Rule 144, promulgated under
the Act, which, in substance, permit limited public resale of “restricted
securities” acquired, directly or indirectly, from the issuer thereof (or from
an affiliate of such issuer), in a non-public offering subject to the
satisfaction of certain conditions, if applicable, including, among other
things: The availability of certain public information about the Company, the
resale occurring not less than one (1) year after the party has purchased and
paid for the securities to be sold; the sale being made through a broker in an
unsolicited “broker’s transaction” or in transactions directly with a market
maker (as said term is defined under the Securities Exchange Act of 1934, as
amended) and the amount of securities being sold during any three-month period
not exceeding the specified limitations stated therein.

 

(v)        The Holder further understands that at the time it wishes to sell
this Warrant and any securities issuable upon the exercise hereof there may be
no public market upon which to make such a sale, and that, even if such a public
market then exists, the Company may not be satisfying the current public
information requirements of Rule 144, and that, in such event, the Holder may be
precluded from selling this Warrant and any securities issuable upon the
exercise hereof under Rule 144 even if the one-year minimum holding period had
been satisfied.

 

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(vi)       The Holder further understands that in the event all of the
requirements of Rule 144 are not satisfied, registration under the Act,
compliance with Regulation A, or some other registration exemption will be
required; and that, notwithstanding the fact that Rule 144 is not exclusive, the
Staff of the SEC has expressed its opinion that persons proposing to sell
private placement securities other than in a registered offering and otherwise
than pursuant to Rule 144 will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or
sales, and that such persons and their respective brokers who participate in
such transactions do so at their own risk.

 

(b)         Disposition of Warrant or Shares. With respect to any offer, sale or
other disposition of this Warrant or any shares of Common Stock acquired
pursuant to the exercise of this Warrant, the Holder hereof and each subsequent
Holder of this Warrant agrees to give written notice to the Company, describing
the manner thereof to the extent required by applicable securities laws,
provided, however, that, at any time that the Common Stock is publicly traded,
such Common Stock may be offered, sold or otherwise disposed of without any such
notice. To the extent applicable any certificate representing this Warrant or
the shares of Common Stock transferred shall bear a legend as to the applicable
restrictions on transferability.

 

8.           No Rights as a Stockholder. No Holder of this Warrant, as such,
shall be entitled to vote or receive dividends or be deemed the holder of Common
Stock or any other securities of the Company which may at any time be issuable
on the exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Holder of this Warrant, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to receive notice of meetings, or to receive dividends or subscription rights
or otherwise until this Warrant shall have been exercised and the Shares
purchasable upon the exercise hereof shall have become deliverable, as provided
herein.

 

9.           Representations and Warranties. The Company represents and warrants
to the Holder of this Warrant as follows:

 

(a)         This Warrant has been duly authorized and executed by the Company
and is a valid and binding obligation of the Company enforceable in accordance
with its terms, subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and the rules of law or principles at
equity governing specific performance, injunctive relief and other equitable
remedies;

 

(b)        The Shares have been duly authorized and reserved for issuance by the
Company and, when issued in accordance with the terms hereof, will be validly
issued, fully paid and nonassessable;

 

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(c)         The execution and delivery of this Warrant are not, and the issuance
of the Shares upon exercise of this Warrant in accordance with the terms hereof
will not be, inconsistent with the Company’s Articles of Incorporation or
bylaws, as amended, do not and will not contravene any material law,
governmental rule or regulation, judgment or order applicable to the Company,
and do not and will not conflict with or contravene any provision of, or
constitute a default under, any material indenture, mortgage, contract or other
instrument of which the Company is a party or by which it is bound or require
the consent or approval of, the giving of notice to, the registration or filing
with or the taking of any action in respect of or by, any Federal, state or
local government authority or agency or other person, except for the filing of
notices pursuant to federal and state securities laws, which filings will be
effected by the time required thereby.

 

10.        Modification and Waiver. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the Company and the registered Holder of this Warrant.

 

11.        Notices. Any notice, request, communication or other document
required or permitted to be given or delivered to the Holder hereof or the
Company shall be delivered, or shall be sent by certified or registered mail,
postage prepaid, to the Holder at its address as shown on the books of the
Company or to the Company at the address indicated therefor on the signature
page of this Warrant.

 

12.        Binding Effect on Successors. Except as otherwise set forth herein,
this Warrant shall be binding upon any corporation succeeding the Company by
merger, consolidation or acquisition of all or substantially all of the
Company’s assets and shall be binding upon any Holder of this Warrant.

 

13.        Lost Warrants or Stock Certificates. The Company covenants to the
Holder hereof that, upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in
the case of any such loss, theft or destruction, upon receipt of an indemnity
reasonably satisfactory to the Company and its transfer agent, or in the case of
any such mutilation upon surrender and cancellation of such Warrant, the Company
will make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.

 

14.        Descriptive Headings. The descriptive headings of the several
paragraphs of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant.

 

15.        Governing Law. This Warrant shall be construed and enforced in
accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Warrant shall be governed by, the
internal laws of the State of California without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of California or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of California.

 

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16.          Dispute Resolution. In the case of a dispute as to the
determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall submit the disputed determinations or arithmetic
calculations via facsimile within two business days of receipt of the Exercise
Notice giving rise to such dispute, as the case may be, to the holder of this
Warrant. If the holder of this Warrant and the Company are unable to agree upon
such determination or calculation of the Exercise Price or the Warrant Shares
within three business days of such disputed determination or arithmetic
calculation being submitted to the Holder, then the Company shall, within two
business days submit via facsimile (a) the disputed determination of the
Exercise Price to an independent, reputable investment bank selected by the
Company and approved by the holder of this Warrant or (b) the disputed
arithmetic calculation of the Warrant Shares to the Company’s independent,
outside accountant. The Company shall cause at its expense the investment bank
or the accountant, as the case may be, to perform the determinations or
calculations and notify the Company and the Holder of the results no later than
ten business days from the time it receives the disputed determinations or
calculations. Such investment bank’s or accountant’s determination or
calculation, as the case may be, shall be binding upon all parties absent
demonstrable error.

 

17.          Remedies; Other Obligations, Breaches, and Injunctive Relief. The
remedies provided in this Warrant shall be cumulative and in addition to all
other remedies available under this Warrant, the Note and the Subscription
Agreement, at law or in equity (including a decree of specific performance
and/or other injunctive relief), and nothing herein shall limit the right of the
holder of this Warrant to pursue actual damages for any failure by the Company
to comply with the terms of this Warrant. The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the holder of
this Warrant and that the remedy at law for any such breach may be inadequate.
The Company therefore agrees that, in the event of any such breach or threatened
breach, the holder of this Warrant shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach, without the
necessity of showing economic loss and without any bond or other security being
required.

 

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This Warrant was issued by the Company and the terms hereof were accepted by the
Holder of this Warrant on March 5, 2007.

 

“THE COMPANY”

 

DYNAMIC LEISURE CORPORATION

 

/s/ Daniel G. Brandano

 

By: Daniel G. Brandano

 

Title: President

 

Address:

5680-A West Cypress Street

Tampa, FL 33607

Tel: 813-877-6300

Fax: 813-877-6333

 

“HOLDER”

 

MMA CAPITAL, LLC

 

/s/ Gary Armitage

 

By:Gary Armitage

 

Title: Managing Member

 

Address:

456 Montgomery Street Suite 2200

San Francisco, CA 94104

 

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EXHIBIT A

 

NOTICE OF EXERCISE

 

 

To:

Dynamic Leisure Corporation

 

_____________________

 

 

_____________________

 

 

1.          The undersigned hereby elects to exercise this Warrant as to
__________ shares of Common Stock of Dynamic Leisure Corporation pursuant to the
terms of the attached Warrant, and tenders herewith payment of the purchase
price of such shares in full. The purchase price is being paid by (check one):

 

 

___

(i)

certified check, bank check or cashier’s check.

 

___

(ii)

wire transfer.

 

2.           Please issue a certificate or certificates representing said shares
in the name of the undersigned.

 

3.          The undersigned represents that the aforesaid shares are being
acquired for the account of the undersigned for investment and not with a view
to, or for resale in connection with, the distribution thereof and that the
undersigned has no present intention of distributing or reselling such shares.
In support thereof, the undersigned has executed an Investment Representation
Statement attached hereto as Schedule 1.

 

 

Holder:

 

_______________________________

(Signature)

 

_______________________________

(Date)

 

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Schedule 1

 

INVESTMENT REPRESENTATION STATEMENT

 

Purchaser:

________________________

 

Company:

Dynamic Leisure Corporation

 

Security:

Common Stock

 

Amount:

_____________

 

Date:

_____________

 

In connection with the purchase of the above-listed securities (collectively,
the “Securities”), the undersigned (the “Purchaser”) represents to the Company
as follows:

 

(a)         The Purchaser is aware of the Company’s business affairs and
financial condition, and has acquired sufficient information about the Company
to reach an informed and knowledgeable decision to acquire the Securities. The
Purchaser is purchasing the Securities for its own account for investment
purposes only and not with a view to, or for the resale in connection with, any
“distribution” thereof for purposes of the Securities Act of 1933, as amended
(the “Act”).

 

(b)        The Purchaser understands that the Securities have not been
registered under the Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of the
Purchaser’s investment intent as expressed herein. In this connection, the
Purchaser understands that, in the view of the Securities and Exchange
Commission (“SEC”), the statutory basis for such exemption may be unavailable if
the Purchaser’s representation was predicated solely upon a present intention to
hold these Securities for the minimum capital gains period specified under tax
statutes, for a deferred sale, for or until an increase or decrease in the
market price of the Securities, or for a period of one year or any other fixed
period in the future.

 

(c)         The Purchaser further understands that the Securities must be held
indefinitely unless subsequently registered under the Act or unless an exemption
from registration is otherwise available. Moreover, the Purchaser understands
that the Company is under no obligation to register the Securities. In addition,
the Purchaser understands that the certificate evidencing the Securities will be
imprinted with the legend referred to in the Warrant under which the Securities
are being purchased.

 

(d)        The Purchaser is aware of the provisions of Rule 144, promulgated
under the Act, which, in substance, permit limited public resale of “restricted
securities” acquired, directly or indirectly, from the issuer thereof (or from
an affiliate of such issuer), in a non-public offering subject to the
satisfaction of certain conditions, if

 

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applicable, including, among other things: The availability of certain public
information about the Company, the resale occurring not less than one year after
the party has purchased and paid for the securities to be sold; the sale being
made through a broker in an unsolicited “broker’s transaction” or in
transactions directly with a market maker (as said term is defined under the
Securities Exchange Act of 1934, as amended) and the amount of securities being
sold during any three-month period not exceeding the specified limitations
stated therein.

 

(e)         The Purchaser further understands that at the time it wishes to sell
the Securities there may be no public market upon which to make such a sale, and
that, even if such a public market then exists, the Company may not be
satisfying the current public information requirements of Rule 144, and that, in
such event, the Purchaser may be precluded from selling the Securities under
Rule 144 even if the one-year minimum holding period had been satisfied.

 

(f)         The Purchaser further understands that in the event all of the
requirements of Rule 144 are not satisfied, registration under the Act,
compliance with Regulation A, or some other registration exemption will be
required; and that, notwithstanding the fact that Rule 144 is not exclusive, the
Staff of the SEC has expressed its opinion that persons proposing to sell
private placement securities other than in a registered offering and otherwise
than pursuant to Rule 144 will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or
sales, and that such persons and their respective brokers who participate in
such transactions do so at their own risk.

 

Purchaser:

 

_______________________________

(Signature)

 

_______________________________

(Date)

 

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