Exhibit 10.1

 

STOCK EXCHANGE AGREEMENT

 

THIS STOCK EXCHANGE AGREEMENT (the “Agreement”) is made and entered into
effective January 13, 2006, by and among DYNECO CORPORATION, a Minnesota
corporation (“DynEco”), DYNAMIC LEISURE GROUP, INC., a Florida corporation
(“Dynamic”), and the shareholders of Dynamic listed on the signature page and
Exhibit A hereto, constituting all of the shareholders of Dynamic (collectively,
the “Shareholders”).

 

RECITALS:

 

A.           The Shareholders own all of the issued and outstanding capital
stock of Dynamic, consisting of 5,910,000 shares of common stock, no par value
per share (the “Dynamic Shares”).

 

B.            DynEco desires to acquire the Dynamic Shares from the Shareholders
in exchange for 197,000 shares of Series A preferred stock, $.01 par value per
share, of DynEco (the “DynEco Shares”) to be issued to the Shareholders in the
amounts set forth on Exhibit A.

 

C.            The Shareholders desire to exchange their Dynamic Shares for the
DynEco Shares upon the terms and conditions set forth herein.

 

D.           It is the intention of the parties hereto that: (i) DynEco shall
acquire the Dynamic Shares solely for the consideration set forth below (the
“Exchange”); (ii) the Exchange shall qualify as a transaction exempt from
registration or qualification under the Securities Act of 1933, as amended (the
“Securities Act”), and (iii) the Exchange shall qualify as a “tax-free”
transaction within the meaning of Section 368 of the Internal Revenue Code of
1986.

 

NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties hereto
agree as follows:

 

SECTION 1. EXCHANGE OF SHARES AND OTHER TRANSACTIONS

 

1.1          Exchange of Shares. At the Closing (as hereinafter defined), the
Shareholders shall tender the Dynamic Shares to DynEco, free and clear of all
liens, charges, encumbrances and security interests and DynEco shall issue the
DynEco Shares to the Shareholders, pro-rata, in exchange therefor.

 

1.2          Delivery of Dynamic Shares and Investment Letters. At the Closing
date, the Shareholders shall deliver to DynEco (a) certificates representing all
of the Dynamic Shares, duly endorsed for transfer (or with executed stock
powers) so as to convey good and marketable title to the Dynamic Shares to
DynEco, and, (b) Investment Letters in the Form attached hereto as Exhibit B
each; an “Investment Letter” and, collectively, the “Investment Letters”) and
thereupon, DynEco will deliver certificates evidencing the DynEco Shares to the
Shareholders in the amounts set forth on Exhibit A. The DynEco Shares shall not
be registered under the Securities Act of 1933, as amended (the “Securities
Act”). The designations, rights, powers, preferences and limitations of the
DynEco Shares shall be as set forth on Exhibit C.

 

 

1.3

Dynamic Convertible Securities. At the Closing:

 

(a)           Each common stock purchase warrant to purchase shares of Dynamic
common stock outstanding on the Closing Date shall cease to represent the right
to purchase Dynamic common stock and shall thereafter represent the right to
purchase shares of DynEco stock in the same proportion as

 

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the Shareholders exchange their Dynamic Shares hereunder, subject to adjustment
to reflect any reverse stock split or other change in the capital structure of
DynEco..

 

(b)           Each option to purchase shares of Dynamic common stock outstanding
on the Closing Date shall cease to represent the right to purchase Dynamic
common stock and shall thereafter represent the right to purchase shares of
DynEco stock in the same proportion as the Shareholders exchange their Dynamic
Shares hereunder, subject to adjustment to reflect any reverse stock split or
other change in the capital structure of DynEco..

 

(c)           Each Dynamic convertible promissory note convertible into shares
of Dynamic common stock outstanding on the Closing Date shall cease to represent
the right to convert into Dynamic common stock and shall thereafter be
convertible into DynEco stock in the same proportion as the Shareholders
exchange their Dynamic Shares hereunder, subject to adjustment to reflect any
reverse stock split or other change in the capital structure of DynEco..

 

SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS

 

 

Each of the Shareholders severally represents and warrants to DynEco as follows:

 

2.1          Information in Investment Letter. The representations and
warranties of the Shareholder contained in the Investment Letter to be delivered
by the Shareholder at

Closing is true, complete and accurate.

 

2.2          Ownership of Dynamic Shares and Authorization of Agreement. The
Shareholder is the sole record and beneficial owner of the Dynamic Shares
attributable to the Shareholder on Exhibit A and which are being tendered by the
Shareholder in the Exchange, and are owned by the Shareholder free and clear of
all rights, claims, liens and encumbrances, and have not been sold, pledged,
assigned or otherwise transferred except pursuant to this Agreement. Except as
set forth on Exhibit E, there are no outstanding subscriptions, rights, options,
warrants or other agreements obligating the Shareholder to sell or transfer to
any third person any of the Dynamic Shares owned by the Shareholder, or any
interest therein. The Shareholder has the power to enter into this Agreement and
to carry out his obligations hereunder. This Agreement has been duly executed by
the Shareholder and constitutes the valid and binding obligation of the
Shareholder, enforceable against the Shareholder in accordance with its terms.

 

SECTION 3. REPRESENTATIONS AND WARRANTIES OF DYNAMIC

 

Dynamic, to the best of its knowledge, hereby represents and warrants to DynEco
as follows, with any exceptions thereto being denoted on the applicable schedule
to this Agreement:

 

3.1          Organization and Good Standing. Dynamic is a corporation, duly
organized, validly existing and in good standing under the laws of the State of
Florida, and is entitled to own or lease its properties and to carry on its
business as and in the places where such properties are now owned, leased or
operated and such business is now conducted. Dynamic is qualified to do business
as a foreign corporation in each jurisdiction, if any, in which its property or
business requires such qualification, except where the failure to so qualify
would not have a Dynamic Material Adverse Effect (as hereinafter defined). To
the extent that Dynamic has one or more subsidiary corporations, the
representations and warranties set forth in this Section shall be true and
correct as to each of such subsidiaries such that the inaccuracy of any such
representation or warranty does not have a Dynamic Material Adverse Effect.

 

3.2          Authorization; Enforceability; No Breach. Dynamic has all necessary
corporate power and authority to execute this Agreement and perform its
obligations hereunder. This Agreement constitutes the valid and binding
obligation of Dynamic enforceable against Dynamic in accordance with

 

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its terms, except as may be limited by bankruptcy, moratorium, insolvency or
other similar laws generally affecting the enforcement of creditors’ rights. The
execution, delivery and performance of this Agreement by Dynamic and the
consummation of the transactions contemplated hereby will not:

 

 

(a)

violate any provision of the Articles of Incorporation or By-Laws of Dynamic;

 

(b)           violate, conflict with or result in the breach of any of the terms
of, result in a material modification of, otherwise give any other contracting
party the right to terminate, or constitute (or with notice or lapse of time or
both constitute) a default under, any contract or other agreement to which
Dynamic is a party or by or to which it or any of its assets or properties may
be bound or subject;

 

(c)           violate any order, judgment, injunction, award or decree of any
court, arbitrator or governmental or regulatory body against, or binding upon,
Dynamic, or upon the properties or business of Dynamic; or

 

(d)           violate any statute, law or regulation of any jurisdiction
applicable to the transactions contemplated herein which could have a Material
Adverse Effect (as hereinafter defined) on the business or operations of
Dynamic.

 

3.3          Compliance with Laws. Dynamic have each complied with all federal,
state, county and local laws, ordinances, regulations, inspections, orders,
judgments, injunctions, awards or decrees applicable to it or its business
which, if not complied with, would materially and adversely affect the business
or financial condition of Dynamic .

 

3.4          Consents and Approvals. No filing with, and no permit,
authorization, consent, or approval of, any public body or authority or any
third party is necessary for the consummation by Dynamic of the transactions
contemplated by this Agreement.

 

3.5          Litigation. There is no action, suit or proceeding pending or
threatened, or any investigation, at law or in equity, before any arbitrator,
court or other governmental authority, pending or threatened, nor any judgment,
decree, injunction, award or order outstanding, against or in any manner
involving Dynamic or any of Dynamic's properties or rights which (a) could
reasonably be expected to have a material adverse effect on Dynamic, taken as a
whole, or (b) could reasonably be expected to materially and adversely affect
consummation of any of the transactions contemplated by this Agreement
(collectively, a “Dynamic Material Adverse Effect” or a “Material Adverse Effect
on Dynamic”).

 

3.6          Brokers or Finders. No broker’s or finder’s fee is or will become
payable by Dynamic in connection with the transactions contemplated by this
Agreement, nor will any such fee be incurred as a result of any actions by
Dynamic, except to the extent provided for in a Modification and Waiver
Agreement being entered into by DynEco contemporaneous with the Closing (the
“Modification Agreement”), relating to the debt restructuring described in
Sections 7.1(g) and 7.2(h) of this Agreement.

 

3.7          Real Estate. Dynamic neither owns real property nor is a party to
any leasehold agreement, other than the lease for its executive offices in
Tampa, Florida.

 

3.8          Assets. Except to the extent set forth in the Dynamic Financial
Statements, Dynamic owns all rights, title and interest in and to its assets,
free and clear of all liens, pledges, mortgages, security interests, conditional
sales contracts or any other encumbrances.

 

3.9          Financial Statements. The consolidated unaudited balance sheets of
Dynamic at December 31, 2005 (the “Dynamic Financial Statements”) fairly present
in all material respects the financial position of Dynamic as of the respective
dates thereof, and the other related statements included

 

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therein fairly present in all material respects the results of operations,
changes in shareholders’ equity and cash flows of Dynamic for the respective
periods or as of the respective dates set forth therein,. The Dynamic Financial
Statements are a compilation of internal accounting software reports that have
not been generated or reviewed by a certified public accountant and have not
been prepared in accordance with U.S. generally accepted accounting principles
(“GAAP”) applied on a basis consistent throughout all periods presented.
However, to the best of Dynamic’s knowledge, the Dynamic Financial Statements
present fairly in all material respects the financial position of Dynamic as of
the date and for the periods indicated.

 

Dynamic hereby represents and warrants to DynEco that it has no reason to
believe that the Dynamic Financial Statements cannot be audited and prepared in
accordance with GAAP and SEC requirements, including the instructions to Form
8-K. Dynamic further represents and warrants that it has no reason to believe
that it will not have the necessary financial statements and disclosure for
inclusion in all required Securities Exchange Act of 1934 (the “Exchange Act”)
reports when due following the Closing as the accounting survivor as a result of
the transactions contemplated hereby.

 

3.10        Absence of Changes; No Undisclosed Liabilities. Since December 31,
2005, Dynamic has not incurred any liability material to Dynamic on a
consolidated basis, except in the ordinary course of its business, consistent
with past practices; suffered a change, or any event involving a prospective
change, in the business, assets, financial condition, or results of operations
of Dynamic which has had, or is reasonably likely to have, individually or in
the aggregate, a Dynamic Material Adverse Effect (other than as a result of
changes or proposed changes in federal or state regulations of general
applicability or interpretations thereof, changes in generally accepted
accounting principles, and changes that could, under the circumstances,
reasonably have been anticipated in light of disclosures made in writing by
Dynamic to DynEco pursuant hereto); or subsequent to the date hereof, conducted
its business and operations other than in the ordinary course of business and
consistent with past practices. Dynamic has no liabilities (and Dynamic is not
aware of any basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand against any of them giving
rising to any liability which individually or is in the aggregate are reasonably
likely to have a Material Adverse Effect on Dynamic ) except for (a) liabilities
set forth on the face of the most recent balance sheet included in the Dynamic
Financial Statements, and (b) liabilities which have arisen after the date of
such balance sheet in the ordinary course of business (none of which results
from, arises out of, relates to, is in the nature of, or was caused by any
breach of contract, tort, infringement, or violation of law), that individually
or in the aggregate do not result in a Dynamic Material Adverse Effect.

 

3.11        Capitalization. The authorized capital stock of Dynamic consists of
10,000,000 shares of common stock of which 5,910,000 shares are presently issued
and outstanding, and no shares of preferred stock. Except as set forth on
Exhibit E, Dynamic has not granted, issued or agreed to grant, issue or make
available any warrants, options, subscription rights or any other commitments of
any character relating to the unissued shares of capital stock of Dynamic. All
of the Dynamic Shares are duly authorized and validly issued, fully paid and
non-assessable.

 

3.12        Contracts. A copy of each of the material contracts, instruments,
mortgages, notes, security agreements, leases, agreements, or understandings,
whether written or oral, to which Dynamic is a party that relates to or affects
the assets or operations of Dynamic or to which Dynamic’s assets or operations
may be bound or subject (collectively, the “Contracts”), has been provided to
DynEco. Each of the Contracts is a valid and binding obligation of Dynamic and
in full force and effect, except for where the failure to be in full force and
effect would not, individually or in the aggregate, have a Material Adverse
Effect on DynEco. For purposes of this Agreement a material contract shall be
any contract or agreement involving consideration in excess of $10,000. There
are no existing defaults by Dynamic thereunder or, to the knowledge of Dynamic,
by any other party thereto, which defaults, individually or in the aggregate,
would have a Material Adverse Effect on Dynamic.

 

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3.13        Taxes. All required tax returns or federal, state, county,
municipal, local, foreign and other taxes and assessments have been properly
prepared and filed by Dynamic for all years for which such returns are due
unless an extension for filing any such return has been properly prepared and
filed. Any and all federal, state, county, municipal, local, foreign and other
taxes, assessments, including any and all interest, penalties and additions
imposed with respect to such amounts have been paid or provided for. Dynamic has
not been audited by any local, state or federal tax authority.

 

3.14        (a)            Except to the extent that any inaccuracy of any of
the following (or the circumstances giving rise to such inaccuracy), in the
aggregate, would not reasonably be expected to have a Material Adverse Effect on
Dynamic: (i) Dynamic owns, or is licensed or otherwise has the legally
enforceable right to use (in each case, clear of any liens or encumbrances of
any kind), all Intellectual Property (as hereinafter defined) used in or
necessary for the conduct of its business as currently conducted; (ii) no claims
are pending or, to the knowledge of Dynamic, threatened that Dynamic is
infringing on or otherwise violating the rights of any person with regard to any
Intellectual Property used by, owned by, and/or licensed to Dynamic or any of
its subsidiaries; (ii i) as of the date of this Agreement, to the knowledge of
Dynamic, no person is infringing on or otherwise violating any right of Dynamic
with respect to any Intellectual Property owned by and/or licensed to Dynamic ;
and (iv) as of the date of this Agreement, Dynamic has not received any notice
of any claim challenging the ownership or validity of any Intellectual Property
owned by Dynamic or challenging Dynamic’s license or legally enforceable right
to use any Intellectual Property licensed by it.

 

(b)           For purposes of this Agreement, “Intellectual Property” means
trademarks (registered or unregistered), service marks, brand names,
certification marks, trade dress, assumed names, trade names, and other
indications of origin, the goodwill associated with the foregoing and
registrations in any jurisdiction of, and applications in any jurisdiction to
register, the foregoing, including any extension, modification or renewal of any
such registration or application; inventions, discoveries and ideas, whether
patented, patentable, or not in any jurisdiction; trade secrets and confidential
information and rights in any jurisdiction to limit the use or disclosure
thereof by any person; writings and other works of authorship, whether
copyrighted, copyrightable, or not in any jurisdiction; registration or
applications for registration of copyrights in any jurisdiction, and any
renewals or extensions thereof; any similar intellectual property or proprietary
rights and computer programs and software (including source code, object code,
and data); licenses, immunities, covenants not to sue, and the like relating to
the foregoing; and any claims or causes of action arising out of or related to
any infringement or misappropriation of any of the foregoing.

 

3.15        Labor and Employment Matters. (a) Dynamic is and has been in
compliance in all respects with all applicable laws respecting employment and
employment practices, terms, and conditions of employment and wages and hours,
including, such laws respecting employment discrimination, equal opportunity,
affirmative action, worker’s compensation, occupational safety, and health
requirements and unemployment insurance and related matters, and are not engaged
in and have not engaged in any unfair labor practice; (b) no investigation or
review by or before any governmental entity concerning any violations of any
such applicable laws is pending nor, to the knowledge of Dynamic is any such
investigation threatened or has any such investigation occurred during the last
three years, and no governmental entity has provided any notice to Dynamic or
otherwise asserted an intention to conduct any such investigation; (c) there is
no labor strike, dispute, slowdown, or stoppage actually pending or threatened
against Dynamic; (d) no union representation question or union organizational
activity exists respecting the employees of Dynamic ; (e) no collective
bargaining agreement exists which is binding on Dynamic ; (f) Dynamic has
experienced no work stoppage or other labor difficulty; and (g) in the event of
termination of the employment of any of the current officers, directors,
employees, or agents of Dynamic, Dynamic shall not, pursuant to any agreement or
by reason of anything done prior to the closing by Dynamic be liable to any of
said officers, directors, employees, or agents for so-called “severance pay” or
any other similar payments or benefits, including, without limitation,
post-employment healthcare

 

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(other than pursuant to COBRA) or insurance benefits, except to the extent that
any matter in Items (a), (b), (f) and (g) could not reasonably be expected
individually or in the aggregate to have a Material Adverse Effect on Dynamic .

 

3.16        Employee Benefit Plans. Dynamic is not a party to any written or
formal employee benefit plan (including, without limitation, any “employee
benefit plan” as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”)) policy or agreement that is
maintained (all of the foregoing, the “Benefit Plans”), or is or was contributed
to by Dynamic or pursuant to which Dynamic or any trade or business, whether or
not incorporated (an “ERISA Affiliate”), which together with Dynamic would be
deemed a “single employer” within the meaning of Section 4001 of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), is still
potentially liable for payments, benefits, or claims.

 

3.17        State Anti-Takeover Statutes. The Dynamic Board of Directors has
approved this Agreement and the transactions contemplated hereby and thereby
such approval constitutes approval of the Agreement and other transactions
contemplated hereby and thereby by the Dynamic Board of Directors as required
under Florida law. To the knowledge of Dynamic, no state anti-takeover statute
is applicable to the Exchange.

 

3.18        Absence of Certain Business Practices. Neither Dynamic nor any
director, officer, employer, or agent of Dynamic, nor any person acting on their
behalf, directly or indirectly has to Dynamic’s knowledge given or agree to give
any gift or similar benefit to any customer, supplier, governmental employee or
other person which (a) might subject Dynamic to any damage or penalty in any
civil, criminal, or governmental litigation or proceeding, (b) if not given in
the past, might have had a Material Adverse Effect on Dynamic, or (c) if not
continued in the future, might have a Material Adverse Effect on Dynamic or
which might subject Dynamic to suit or penalty in any private or governmental
litigation or proceeding.

 

3.19        Internal Accounting Controls. Dynamic maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

 

3.20        Full Disclosure. No representation or warranty by Dynamic in this
Agreement or in any document or schedule to be delivered by them pursuant
hereto, and no written statement, certificate or instrument furnished or to be
furnished to DynEco pursuant hereto or in connection with the negotiation,
execution or performance of this Agreement contains, or will contain, any untrue
statement of a material fact or omits, or will omit, to state any fact necessary
to make any statement herein or therein not materially misleading or necessary
to a complete and correct presentation of all material aspects of the businesses
of Dynamic.

 

SECTION 4. REPRESENTATIONS AND WARRANTS OF DYNECO.

 

DynEco, to the best of its knowledge, hereby represents and warrants to Dynamic
and the Shareholders as follows, with any exceptions thereto being denoted on
the applicable schedule to this Agreement:

 

4.1          Organization and Good Standing. DynEco is a corporation duly
organized, validly existing and in good standing under the laws of Minnesota,
and is entitled to own or lease its properties

 

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and to carry on its business as and in the places where such properties are now
owned, leased or operated and such business is now conducted. DynEco is
qualified to do business as a foreign corporation in each jurisdiction, if any,
in which its property or business requires such qualification which (a) could
reasonably be expected to have a material adverse effect on DynEco, taken as a
whole, or (b) could reasonably be expected to materially and adversely affect
consummation of any of the transactions contemplated by this Agreement
(collectively, a “DynEco Material Adverse Effect” or a “Material Adverse Effect
on DynEco”). To the extent that DynEco has one or more subsidiary corporations,
the representations and warranties set forth in this Section shall be true and
correct as to each of such subsidiaries such that the inaccuracy of any such
representation or warranty does not have a DynEco Material Adverse Effect.

 

4.2          Authorization; Enforceability; No Breach. DynEco has all necessary
corporate power and authority to execute this Agreement and perform its
obligations hereunder. This Agreement constitutes the valid and binding
obligation of DynEco enforceable against DynEco in accordance with its terms,
except as may be limited by bankruptcy, moratorium, insolvency or other similar
laws generally affecting the enforcement of creditors’ rights. The execution,
delivery and performance of this Agreement by DynEco and the consummation of the
transactions contemplated hereby will not:

 

 

(a)

violate any provision of the Articles of Incorporation or By-Laws of DynEco;

 

(b)           violate, conflict with or result in the breach of any of the terms
of, result in a material modification of, otherwise give any other contracting
party the right to terminate, or constitute (or with notice or lapse of time or
both constitute) a default under, any contract or other agreement to which
DynEco is a party or by or to which it or any of its assets or properties may be
bound or subject;

 

(c)           violate any order, judgment, injunction, award or decree of any
court, arbitrator or governmental or regulatory body against, or binding upon,
DynEco, or upon the properties or business of DynEco; or

 

(d)           violate any statute, law or regulation of any jurisdiction
applicable to the transactions contemplated herein which could have a Material
Adverse Effect on DynEco.

 

4.3          The DynEco Shares. The DynEco Shares to be issued to the
Shareholders have been, or on or prior to the Closing will have been, duly
authorized by all necessary corporate actions and, when so issued in accordance
with the terms of this Agreement, will be validly issued, fully paid and
non-assessable and will not be issued in violation of the pre-emptive or similar
rights of any person.

 

4.4          Compliance with Laws. DynEco has complied with all federal, state,
county and local laws, ordinances, regulations, inspections, orders, judgments,
injunctions, awards or decrees applicable to it or its business which, if not
complied with, would result in a Material Adverse Effect on DynEco.

 

4.5          Consents and Approvals. No filing with, and no permit,
authorization, consent or approval of, any public body or authority or any third
party is necessary for the consummation by DynEco of the transactions
contemplated by this Agreement.

 

4.6          Litigation. Other than as disclosed in the reports filed by DynEco
with the Securities and Exchange Commission (“SEC”) under the Securities
Exchange Act of 1934, as amended (the “SEC Reports”), there is no action, suit
or proceeding pending or threatened, or any investigation, at law or in equity,
before any arbitrator, court or other governmental authority, pending or
threatened, nor any judgment, decree, injunction, award or order outstanding,
against or in any manner involving DynEco or any of DynEco's properties or
rights which could reasonably be expected to have Material Adverse Effect on
DynEco.

 

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4.7          Brokers or Finders. No broker’s or finder’s fee is or will become
payable by DynEco in connection with the transaction contemplated by this
Agreement, nor will any such fee be incurred as a result of any actions by
DynEco, except to the extent provided for in the Modification Agreement.

 

4.8          Real Estate. DynEco neither owns real property nor is a party to
any leasehold agreement that will survive the Closing.

 

4.9          Assets. Except to the extent otherwise disclosed in the SEC
Reports, DynEco owns all rights, title and interest in and to its assets, free
and clear of all liens, pledges, mortgages, security interests, conditional
sales contracts or any other encumbrances.

 

4.10        Financial Statements. The most recent audited and unaudited
financial statements included in the SEC Reports of DynEco (the “DynEco
Financial Statements”) fairly present in all material respects the financial
position of DynEco as of the respective dates thereof, and the other related
statements included therein fairly present in all material respects the results
of operations, changes in shareholders’ equity and cash flows of DynEco for the
respective periods or as of the respective dates set forth therein, all in
conformity with generally accepted accounting principles consistently applied
during the periods involved, except as otherwise noted therein.

 

4.11        Absence of Changes; No Undisclosed Liabilities. Except as disclosed
in its SEC Reports DynEco has not incurred any liability material to DynEco on a
consolidated basis, except in the ordinary course of its business, consistent
with past practices; suffered a change, or any event involving a prospective
change, in the business, assets, financial condition, or results of operations
of DynEco which has had, or is reasonably likely to have, individually or in the
aggregate, a DynEco Material Adverse Effect (other than as a result of changes
or proposed changes in federal or state regulations of general applicability or
interpretations thereof, changes in generally accepted accounting principles,
and changes that could, under the circumstances, reasonably have been
anticipated in light of disclosures made in writing by DynEco to Dynamic
pursuant hereto); or subsequent to the date hereof, conducted its business and
operations other than in the ordinary course of business and consistent with
past practices. DynEco has no liability (and DynEco is not aware of any basis
for any present or future action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand against any of them giving rising to any
liability which individually or is in the aggregate are reasonably likely to
have a Material Adverse Effect on DynEco) except for (a) liabilities set forth
on the face of the most recent balance sheet included in the DynEco Financial
Statements, and (b) liabilities which have arisen after the date of such balance
sheet in the ordinary course of business (none of which results from, arises out
of, relates to, is in the nature of, or was caused by any breach of contract,
tort, infringement, or violation of law). Exhibit D sets forth all liabilities
and incurred expenses of DynEco as of the date of this Agreement.

 

4.12        Capitalization. The authorized capital stock of DynEco consists of
80,000,000 shares of common stock, $.01 par value per share, of which 34,738,533
shares are presently issued and outstanding, and 20,000,000 shares of preferred
stock, $.01 par value per share, no shares of which have been issued or
designated other than the Series A DynEco Shares. DynEco has not granted, issued
or agreed to grant, issue or make available any warrants, options, subscription
rights or any other commitments of any character relating to the unissued shares
of capital stock of DynEco except as set forth in the SEC Reports and the
Modification Agreement. All of the DynEco Shares are duly authorized and validly
issued, fully paid and non-assessable.

 

4.13        Contracts. A copy of each of the material contracts, instruments,
mortgages, notes, security agreements, leases, agreements, or understandings,
whether written or oral, to which DynEco is a party that relates to or affects
the assets or operations of DynEco or to which DynEco’s assets or operations may
be bound or subject (collectively, the “Contracts”), has been provided to
Dynamic. Each of the Contracts is a valid and binding obligation of DynEco and
in full force and effect, except for where

 

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the failure to be in full force and effect would not, individually or in the
aggregate, have a DynEco Material Adverse Effect. For purposes of this Agreement
a material contract shall be any contract or agreement involving consideration
in excess of $10,000. Except as disclosed in the SEC Reports, there are no
existing defaults by DynEco thereunder or, to the knowledge of DynEco, by any
other party thereto, which defaults, individually or in the aggregate, would
have a Material Adverse Effect on DynEco

 

4.14        Taxes. All required tax returns or federal, state, county,
municipal, local, foreign and other taxes and assessments have been properly
prepared and filed by DynEco for all years for which such returns are due unless
an extension for filing any such return has been properly prepared and filed.
Any and all federal, state, county, municipal, local, foreign and other taxes,
assessments, including any and all interest, penalties and additions imposed
with respect to such amounts have been paid or provided for. DynEco has never
been audited by any local, state or federal tax authority.

 

4.15        (a)          Except as may be disclosed in its SEC Reports and to
the extent that any inaccuracy of any of the following (or the circumstances
giving rise to such inaccuracy), in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on DynEco: (i) DynEco owns, or is
licensed or otherwise has the legally enforceable right to use (in each case,
clear of any liens or encumbrances of any kind), all Intellectual Property (as
hereinafter defined) used in or necessary for the conduct of its business as
currently conducted; (ii) no claims are pending or, to the knowledge of DynEco,
threatened that Dynamic is infringing on or otherwise violating the rights of
any person with regard to any Intellectual Property used by, owned by, and/or
licensed to DynEco or any of its subsidiaries; (iii) as of the date of this
Agreement, to the knowledge of DynEco, no person is infringing on or otherwise
violating any right of DynEco with respect to any Intellectual Property owned by
and/or licensed to DynEco; and (iv) as of the date of this Agreement, neither
DynEco nor any of its subsidiaries have received any notice of any claim
challenging the ownership or validity of any Intellectual Property owned by
DynEco or challenging DynEco’s license or legally enforceable right to use any
Intellectual Property licensed by it.

 

(b)           For purposes of this Agreement, “Intellectual Property” means
trademarks (registered or unregistered), service marks, brand names,
certification marks, trade dress, assumed names, trade names, and other
indications of origin, the goodwill associated with the foregoing and
registrations in any jurisdiction of, and applications in any jurisdiction to
register, the foregoing, including any extension, modification or renewal of any
such registration or application; inventions, discoveries and ideas, whether
patented, patentable, or not in any jurisdiction; trade secrets and confidential
information and rights in any jurisdiction to limit the use or disclosure
thereof by any person; writings and other works of authorship, whether
copyrighted, copyrightable, or not in any jurisdiction; registration or
applications for registration of copyrights in any jurisdiction, and any
renewals or extensions thereof; any similar intellectual property or proprietary
rights and computer programs and software (including source code, object code,
and data); licenses, immunities, covenants not to sue, and the like relating to
the foregoing; and any claims or causes of action arising out of or related to
any infringement or misappropriation of any of the foregoing.

 

4.16        Labor and Employment Matters. (a) DynEco is and has been in
compliance in all respects with all applicable laws respecting employment and
employment practices, terms, and conditions of employment and wages and hours,
including, such laws respecting employment discrimination, equal opportunity,
affirmative action, worker’s compensation, occupational safety, and health
requirements and unemployment insurance and related matters, and are not engaged
in and have not engaged in any unfair labor practice; (b) no investigation or
review by or before any governmental entity concerning any violations of any
such applicable laws is pending nor, to the knowledge of DynEco is any such
investigation threatened or has any such investigation occurred during the last
three years, and no governmental entity has provided any notice to DynEco or
otherwise asserted an intention to conduct any such investigation; (c) there is
no labor strike, dispute, slowdown, or stoppage actually pending or

 

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threatened against DynEco; (d) no union representation question or union
organizational activity exists respecting the employees of DynEco; (e) no
collective bargaining agreement exists which is binding on DynEco; (f) DynEco
has experienced no work stoppage or other labor difficulty; and (g) in the event
of termination of the employment of any of the current officers, directors,
employees, or agents of DynEco, DynEco shall not, pursuant to any agreement or
by reason of anything done prior to the closing by DynEco be liable to any of
said officers, directors, employees, or agents for so-called “severance pay” or
any other similar payments or benefits, including, without limitation,
post-employment healthcare (other than pursuant to COBRA) or insurance benefits,
except to the extent that any matter in Items (a), (b), (f) and (g) could
reasonably be expected individually or in the aggregate to have a Material
Adverse Effect on DynEco.

 

4.17        Employee Benefit Plans. Except as may be disclosed in its public
filings with the SEC, DynEco is not a party to any written or formal employee
benefit plan (including, without limitation, any “employee benefit plan” as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”)) policy or agreement that is maintained (all of the
foregoing, the “Benefit Plans”), or is or was contributed to by DynEco or
pursuant to which DynEco or any trade or business, whether or not incorporated
(an “ERISA Affiliate”), which together with Dynamic would be deemed a “single
employer” within the meaning of Section 4001 of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), is still potentially liable for
payments, benefits, or claims.

 

4.18        State Anti-Takeover Statutes. The DynEco Board of Directors has
approved this Agreement and the transactions contemplated hereby, and thereby
such approval constitutes approval of the Agreement and other transactions
contemplated hereby and thereby by the DynEco Board of Directors as required
under Florida law. To the knowledge of DynEco, no state anti-takeover statute is
applicable to the Exchange.

 

4.19        Absence of Certain Business Practices. Neither DynEco nor any
director, officer, employer, or agent of the foregoing, nor any person acting on
its behalf, directly or indirectly has to DynEco’s knowledge given or agree to
give any gift or similar benefit to any customer, supplier, governmental
employee or other person which (a) might subject Dynamic to any damage or
penalty in any civil, criminal, or governmental litigation or proceeding, (b) if
not given in the past, might have had a Material Adverse Effect on DynEco, or
(c) if not continued in the future, might have a Material Adverse Effect on
DynEco or which might subject DynEco to suit or penalty in any private or
governmental litigation or proceeding.

 

4.20        Internal Accounting Controls. DynEco maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

 

4.21        SEC Reports. DynEco has filed all reports required to be filed by it
under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof.
Such reports comply in all material respects with the requirements of the
Exchange Act and the rules and regulations of the SEC promulgated thereunder,
and none of such reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of DynEco included in the SEC Reports comply in all material respects
with applicable accounting requirements and the rules and regulations of the SEC
with respect thereto as in effect at the time of filing.

 

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4.22        Full Disclosure. No representation or warranty by DynEco in this
Agreement or in any document or schedule to be delivered by them pursuant
hereto, and no written statement, certificate or instrument furnished or to be
furnished to Dynamic pursuant hereto or in connection with the negotiation,
execution or performance of this Agreement contains, or will contain, any untrue
statement of a material fact or omits, or will omit, to state any fact necessary
to make any statement herein or therein not materially misleading or necessary
to a complete and correct presentation of all material aspects of the businesses
of DynEco.

 

SECTION 5. COVENANTS

 

5.1.         Examinations and Investigations. Prior to the Closing, the parties
acknowledge that they have been entitled, through their employees and
representatives, to make such investigation and verification of the assets,
properties, business and operations, books, records and financial condition of
the other, including communications with suppliers, vendors and customers, as
they each may reasonably require. No investigation by a party hereto shall,
however, diminish or waive in any way any of the representations, warranties,
covenants or agreements of the other party under this Agreement. Consummation of
this Agreement shall be subject to the fulfillment of due diligence procedures
to the reasonable satisfaction of each of the parties hereto and its counsel.

 

5.2.         Expenses. Each party hereto agrees to pay its own costs and
expenses incurred in negotiating this Agreement and consummating the
transactions described herein, except that from the date hereof and continuing
to the Closing, Dynamic shall advance such amounts as may be necessary in order
to enable DynEco to pay its expenses as a public corporation, including but not
limited to transfer agent fees, SEC EDGAR filing fees, financial printer fees
and legal and accounting fees and expenses.

 

5.3.         Further Assurances. The parties shall execute such documents and
other papers and take such further action as may be reasonably required or
desirable to carry out the provisions hereof and the transactions contemplated
hereby. Each such party shall use its best efforts to fulfill or obtain in the
fulfillment of the conditions to the Closing, including, without limitation, the
execution and delivery of any documents or other papers, the execution and
delivery of which are necessary or appropriate to the Closing.

 

5.4.         Confidentiality. In the event the transactions contemplated by this
Agreement are not consummated, each of the parties hereto agree to keep
confidential any information disclosed to each other in connection therewith;
provided, however, such obligation shall not apply to information which:

 

 

(a)

at the time of disclosure was public knowledge;

 

(b)           after the time of disclosure becomes public knowledge (except due
to the action of the receiving party); or

 

 

(c)

the receiving party had within its possession at the time of disclosure.

 

5.5.         Post Closing Covenants. Following the Closing, DynEco, through
action of its newly constituted officers and directors, agrees to:

 

(a)           Prepare and file, within four business days’ following execution
of this Agreement, and within four business days’ following consummation of the
Exchange, a Form 8-K under the Exchange Act, containing such information as is
required to be filed thereunder;

 

 

(b)

Remain current in its other reporting obligations under the Exchange Act;

 

 

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(c)           File Post-Effective Amendments to its registration statements on
Form SB-2 (SEC File Nos. 333-112585 and 333-124283), as same may have been
supplemented from time to time, to disclose required information about this
Agreement, the Exchange and the transactions contemplated hereby and thereby;

 

(d)           Promptly respond to comments from the SEC Staff relating to
DynEco’s registration statements and otherwise use its commercially reasonable
best efforts to cause such Post-Effective Amendments to become effective at the
earliest practicable dates;

 

(e)           Honor the obligations of DynEco under its existing agreements, as
same may be amended from time to time,

 

(f)            Take such action as is reasonably necessary in order to cause the
release of any security interest in any assets of DynEco to be released;

 

(g)           Continue to engage the services as Leonard Sculler as a director
of DynEco for a period of at least one year following the Closing Date;

 

(h)           Dynamic shall deliver to DynEco, audited financial statements for
each of the two years ended December 31, 2005 and 2004 (or such shorter period
as Dynamic and its predecessor(s) have been in existence), all prepared in
accordance with the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), Securities and Exchange Commission (“SEC”) rules and regulations
thereunder, including the requirements of Form 8-K, so as to permit such
financial statements to be timely filed with the SEC; and

 

(i)            Convene a special meeting of its shareholders to, among other
things, (i) authorize an increase in the number of authorized shares of common
stock to at least 300,000,000, (ii) approve a “reverse split” of DynEco’s issued
and outstanding common stock at the rate of 30:1, and (iii) reincorporate DynEco
to the State of Florida.

 

SECTION 6. THE CLOSING

 

The closing (the “Closing”) shall take place contemporaneous with the execution
of this Agreement, or at such other time and place as is mutually agreed upon by
DynEco, Dynamic and the Shareholders, following satisfaction or waiver of all
conditions precedent to Closing. At the Closing, (a) DynEco shall execute and
deliver such documents, instruments and other information as may reasonably be
necessary to confirm its compliance with the terms and conditions of this
Agreement and consummate the Exchange and the other transactions and agreements
contemplated hereby, (b) Dynamic shall execute and deliver such documents,
instruments and other information as may reasonably be necessary to confirm its
compliance with the terms and conditions of this Agreement and consummate the
Exchange and the other transactions and agreements contemplated hereby and (c)
each of the Shareholders shall execute and deliver such documents, instruments
and other information as may reasonably be necessary to confirm its compliance
with the terms and conditions of this Agreement and consummate the Exchange and
the other transactions and agreements contemplated hereby.

 

SECTION 7. CONDITIONS PRECEDENT TO CLOSING

 

7.1         Conditions Precedent to the Obligation of DynEco to Issue the DynEco
Shares. The obligation of DynEco to issue the DynEco Shares to the Shareholders
and to otherwise consummate the transactions contemplated hereby is subject to
the satisfaction, at or before the Closing, of each of the conditions set forth
below. These conditions are for DynEco's sole benefit and may be waived by
DynEco at any time in its sole discretion.

 

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(a)           Accuracy of Dynamic’s and the Shareholders’ Representations and
Warranties. The representations and warranties of Dynamic and the Shareholders
shall be true and correct in all material respects as of the date when made and
as of the Closing, as though made at that time.

 

(b)           Performance by Dynamic and the Shareholders. Dynamic and the
Shareholders shall have performed all agreements and satisfied all conditions
required to be performed or satisfied by them at or prior to the Closing,
including without limitation, its obligations under Section 5.2 hereof.

 

(c)           Third Party Consents. All consents necessary for consummation of
the Exchange and the transactions contemplated hereby shall have been received.

 

(d)           No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement.

 

(e)           No Material Adverse Changes. Dynamic shall have suffered no
Dynamic Material Adverse Effect.

 

(f)           Restructure of Indebtedness. DynEco shall have restructured its
debt obligations to Alpha Capital Aktiengesselschaft, JM Investors and related
finders, in the original principal amount of $327,000, upon terms and conditions
reasonably satisfactory to DynEco and Dynamic.

 

(g)           Tender of Dynamic Shares and Investment Letters. The Shareholders
shall have tendered certificates evidencing the Dynamic Shares, duly endorsed
for transfer to DynEco, accompanied by duly executed Investment Letters executed
by each of the Shareholders.

 

(h)           Due Diligence Review. DynEco shall have completed its due
diligence review of Dynamic to its reasonable satisfaction.

 

(i)            Exchange Act Information, Dynamic shall have delivered to DynEco
such information about its business operations and plans, and its management and
ownership as may be necessary in order for DynEco to comply with its reporting
obligations under the Exchange Act.

 

(j)            Miscellaneous. Dynamic and the Shareholders shall have delivered
to DynEco such other documents relating to the transactions contemplated by this
Agreement as DynEco may reasonably request.

 

7.2          Conditions Precedent to the Obligation of the Shareholders to
Exchange Dynamic Shares. The obligation of the Shareholders to exchange their
Dynamic Shares for the DynEco Shares and to otherwise consummate the
transactions contemplated hereby is subject to the satisfaction, at or before
the Closing, of each of the conditions set forth below. These conditions are for
the Shareholders’ sole benefit and may be waived by Dynamic at any time in its
sole discretion.

 

(a)           Accuracy of DynEco's Representations and Warranties. The
representations and warranties of DynEco shall be true and correct in all
material respects as of the date when made and as of the Closing, as though made
at that time.

 

(b)           Performance by DynEco. DynEco shall have performed all agreements
and satisfied all conditions required to be performed or satisfied by it at or
prior to the Closing.

 

 

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(c)           Third Party Consents. All consents necessary for consummation of
the Exchange and the transactions contemplated hereby shall have been received.

 

(d)           No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement.

 

(e)           No Material Adverse Changes. DynEco shall have suffered no DynEco
Material Adverse Effect.

 

(f)           Restrucutre of Indebtedness. DynEco shall have restructured its
debt obligations to Alpha Capital Aktiengesselschaft, JM Investors and related
finders, in the original principal amount of $327,000, upon terms and conditions
reasonably satisfactory to Dynamic.

 

(g)           Agreements with Dr. Edwards. (i) The Employment Agreement dated as
of January 1, 2004 by and between DynEco and Thomas C. Edwards, and all other
employment agreements between DynEco and Dr. Edwards shall have been terminated,
all without further obligation to either party, (ii) .Dr. Edwards shall have
waived all accrued and/or deferred salary and other compensation owned by DynEco
to Dr. Edwards up to and including the date of Closing, (iii) Dr. Edwards shall
have assigned and transferred to DynEco, all of Dr. Edwards’ right, title and
interest in and to that certain Exclusive Patent And Know-How License Agreement
effective January 1, 2004 as same may have been amended from time to time (the
“Patent Agreement”), (iv) DynEco shall have waived all of its right, title and
interest in and to any intellectual property developed or created by Dr. Edwards
during the term of his employment by DynEco other than the intellectual property
that is the subject of the Patent Agreement, (v) DynEco shall assign to Dr.
Edwards or his designee, of all of its right, title and interest in and to the
lease covering DynEco’s facilities at 564 International Place, Rockledge,
Florida, and Dr. Edwards shall assume all of DynEco’s obligations under such
lease and (e) DynEco shall assign to Dr. Edwards or his designee, of all of its
right, title and interest in and to the furniture, fixtures and equipment
located at DynEco’s current facilities at 564 International Place, Rockledge,
Florida, and Dr. Edwards shall assume all of DynEco’s obligations relating to
such furniture, fixtures and equipment.

 

(h)           Resignations. Subject to Section 5.5(g) of this Agreement, the
officers and directors of DynEco shall have delivered their resignations as
such, and, effective at the Closing, until otherwise determined by the directors
and shareholders of DynEco in accordance with applicable law, the officers and
directors of DynEco shall be as follows:

 

 

Daniel G. Brandano

President and Director

 

 

Thomas W. Busch

Vice President, Treasurer and Director

 

Robert A.G. LeVine

Secretary and Director

 

 

Leonard Sculler

Director

 

 

(i)            Exchange Act Compliance. DynEco shall have satisfied all of its
periodic reporting requirements with the SEC through the date of the Closing,
and DynEco shall have delivered to Dynamic all necessary materials, financial
and otherwise in order to continue and maintain accurate records and timely
filings with the SEC.

 

(j)            Due Diligence Review. Dynamic and the Shareholders shall have
completed their due diligence review of DynEco to their reasonable satisfaction.

 

 

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(k)           Miscellaneous. DynEco shall have delivered to the Shareholders
such other documents relating to the transactions contemplated by this Agreement
as the Shareholders may reasonably request.

 

SECTION 8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF DYNECO

 

Notwithstanding any right of Dynamic and the Shareholders fully to investigate
the affairs of DynEco, Dynamic and the Shareholders shall have the right to rely
fully upon the representations, warranties, covenants and agreements of DynEco
contained in this Agreement or in any document delivered by DynEco or any of its
representatives, in connection with the transactions contemplated by this
Agreement. All such representations, warranties, covenants and agreements shall
survive the execution and delivery hereof and the Closing hereunder for 12
months following the Closing.

 

SECTION 9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF DYNAMIC

AND THE SHAREHOLDERS

 

Notwithstanding any right of DynEco fully to investigate the affairs of Dynamic,
DynEco has the right to rely fully upon the representations, warranties,
covenants and agreements of Dynamic and the Shareholders contained in this
Agreement or in any document delivered to DynEco by Dynamic, the Shareholders or
any of their respective representatives, in connection with the transactions
contemplated by this Agreement. All such representations, warranties, covenants
and agreements shall survive the execution and delivery hereof and the Closing
hereunder for 12 months following the Closing.

 

SECTION 10. INDEMNIFICATION

 

10.1        Obligation of DynEco to Indemnify. Subject to the limitations on the
survival of representations and warranties contained in Section 8, DynEco hereby
agrees to indemnify, defend and hold harmless the Shareholders and Dynamic, to
the extent provided for herein, from and against any losses, liabilities,
damages, deficiencies, costs or expenses (including interest, penalties and
reasonable attorneys’ fees and disbursements) (a “Loss”) based upon, arising out
of, or otherwise due to any inaccuracy in or any breach of any representation,
warranty, covenant or agreement of DynEco contained in this Agreement or in any
document or other writing delivered pursuant to this Agreement.

 

10.2        Obligation of the Dynamic and the Shareholders to Indemnify. Subject
to the limitations on the survival of representations and warranties contained
in Section 9, Dynamic and the Shareholders agree to indemnify, defend and hold
harmless DynEco to the extent provided for herein from and against any Loss
based upon, arising out of, or otherwise due to any inaccuracy in or any breach
of any representation, warranty, covenant or agreement made by any of them and
contained in this Agreement or in any document or other writing delivered
pursuant to this Agreement; provided however, that the liability for
indemnification by each of the Shareholders shall be limited to a breach of any
of its representations or warranties contained in Section 2 of this Agreement.

 

SECTION 11. MISCELLANEOUS

 

11.1        Waivers. The waiver of a breach of this Agreement or the failure of
any party hereto to exercise any right under this Agreement shall in no event
constitute a waiver as to any future breach whether similar or dissimilar in
nature or as to the exercise of any further right under this Agreement.

 

11.2        Amendment. This Agreement may be amended or modified only by an
instrument of equal formality signed by the parties or the duly authorized
representatives of the respective parties.

 

 

11.3

Assignment. This Agreement is not assignable except by operation of law.

 

 

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11.4        Notices. Until otherwise specified in writing, the mailing addresses
of both parties of this Agreement shall be as follows:

 

 

DynEco:

DynEco Corporation

 

c/o Steven Sanders

 

7865 Amethyst Lake Pt.

Lake Worth, FL 33467

 

Facsimile No.: (561) 964-6849

 

 

With a copy to:

Steven I. Weinberger, Esq.

 

 

Schneider Weinberger & Beilly LLP

 

 

2200 Corporate Blvd. NW, Suite 210

 

Boca Raton, FL 33431

 

 

Facsimile No.: (561) 362-9612

 

 

 

Dynamic:

Dynamic Leisure Group, Inc.

2203 N. Lois Avenue, Suite 904

Tampa, FL 33611

 

Facsimile No.: (727) 864-1010

 

 

The Shareholders:

Per Exhibit A

 

 

In each case, with

 

 

a copy to:

Robert A. G. LeVine, Esq.

 

 

6015 Benjamin Road, Suite 312

 

Tampa, FL 33634

 

 

Facsimile No.: (813) 221-8013

 

 

The addresses and numbers provided for copies are for the convenience of the
parties, but shall not constitute notice to the parties. Any notice or statement
given under this Agreement shall be sent by reputable overnight courier service,
facsimile transmission or United States Mail to their addresses or facsimile
numbers set forth above or at such other address or number as may be furnished
in writing in accordance with the notice provisions hereof. Notice shall be
deemed to have been given (a) on the date of delivery if sent by courier
service, (b) on the date reflected on printed proof of transmission if sent by
facsimile transmission or (c) three days following the date deposited in the
United States Mail.

 

11.5        Governing Law; Venue. This Agreement shall be governed and construed
in accordance with the laws of the State of Florida, without regard to the
conflicts of law provisions thereof. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the
Counties of Palm Beach and Hillsborough, State of Florida, for the adjudication
of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such courts, that such suit,
action or proceeding is brought in an inconvenient forum or that the venue of
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. Each party also agrees to an automatic
extension of ten (10) days to respond to any such suit. If any provision of this
agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall not affect the validity or enforceability of the
remainder of this

 

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agreement in that jurisdiction or the validity or enforceability of any
provision of this agreement in any other jurisdiction. EACH PARTY HERETO
IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY.

 

11.6        Publicity. No publicity release or announcement concerning this
Agreement or the transactions contemplated hereby shall be issued by either
party hereto at any time from the signing hereof without advance approval in
writing of the form and substance thereof by the other party.

 

11.7        Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto) and the collateral agreements executed in connection with the
consummation of the transactions contemplated herein contain the entire
agreement among the parties with respect to the Exchange and related
transactions, and supersede all prior agreements, written or oral, with respect
thereto.

 

11.8        Headings; Gender. The headings in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement. Use of the masculine gender shall include the feminine and
neuter, as the context shall require.

 

11.9        Severability of Provisions. The invalidity or unenforceability of
any term, phrase, clause, paragraph, restriction, covenant, agreement or other
provision of this Agreement shall in no way affect the validity or enforcement
of any other provision or any part thereof.

 

11.10      Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when so executed, shall constitute an original copy
hereof, but all of which together shall consider but one and the same document.

 

 

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                IN WITNESS WHEREOF, the parties have executed this Agreement on
the date first above written.

 

DYNECO CORPORATION

 

 

 

By:/s/ Dr. Thomas C. Edwards

 

 

Name: Dr. Thomas C. Edwards

 

Title: President

 

 

 

 

DYNAMIC LEISURE GROUP, INC.

 

 

 

By: /s/ Daniel G. Brandano

 

Name: Daniel G. Brandano

 

Title: President

 

 

 

 

SHAREHOLDERS:

 

 

/s/ Daniel G. Brandano

 

Signature

 

 

 

 

STREET VENTURE PARTNERS, LLC

 

 

 

By:

/s/ Daniel G. Brandano

 

Signature

 

 

 

 

CLAUDALE LTD.

 

 

 

By:

/s/ Rosanna Duran

 

Signature

 

 

 

 

DIVERSIFIED ACQUISITION TRUST

 

 

 

By:

Warren Baker, Trustee

 

 

GRQ CONSULTANTS, INC.

 

 

 

By:

/s/ Barry Honig

 

Signature

 

 

 

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MBN CONSULTING, LLC

 

 

 

By:

/s/ Steven Sanders, Manager

 

 

 

/s/ Thomas W. Busch

 

/s/ Brian Brandano

 

/s/ Robert A. G. LeVine

 

 

19

 

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EXHIBIT A

 

SHAREHOLDERS OF DYNAMIC LEISURE GROUP, INC.

EXCHANGE WITH DYNECO CORPORATION

 

 

Name and Address of Dynamic Shareholder

Number of Shares of Dynamic to be Exchanged

Number of Shares of DynEco to be Issued

 

 

 

Daniel G. Brandano

336 4th Avenue North

Tierra Verde, FL 33715-1727

Facsimile:

750,000

25,000

Street Ventures Partners, LLC

336 4th Avenue North

Tierra Verde, FL 33715-1727

Facsimile:

960,000

32,000

Claudale Ltd.

c/o T&T Management

28 Irish Town

Gibraltor

Facsimile:

624,000

20,800

Thomas W. Busch

11618 Tavernay Parkway

Charlotte, NC 28262

Facsimile:

780,000

26,000

Robert A. G. LeVine

5809 S. 2nd Street

Tampa, FL 33611

Facsimile:

240,000

8,000

Brian Brandano

_____________

_____________

Facsimile:

300,000

10,000

Diversified Acquisition Trust

Warren Baker, Trustee

300 Chestnut Street, Suite 200

Needham, MA 02492

Facsimile:

1,716,000

57,200

GRQ Consultants, Inc.

595 S. Federal Highway, Suite 600

Boca Raton, FL 33432

Facsimile:

360,000

12,000

MBN Consulting, LLC

7865 Amethyst Lake Pt.

Lake Worth, FL 33467

Facsimile:

180,000

6,000

 

5,910,000

197,000

TOTAL

 

 

 

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EXHIBIT B

 

INVESTMENT LETTER

 

DynEco Corporation

564 International Place

Rockledge, Florida 32955

 

In connection with and as partial consideration for the receipt by the
undersigned, from DYNECO CORPORATION, a Florida corporation (“Company”),
pursuant to the terms and conditions of the Stock Exchange Agreement dated
January _, 2006 to which the undersigned is a party (the “Agreement”), of the
DynEco Shares (as such term is defined in the Agreement), the undersigned hereby
represents, warrants, covenants and agrees as set forth below.

 

1.           Purchase Entirely for Own Account. The DynEco Shares are being
acquired for investment purposes only, for the Undersigned’s own account, not as
a nominee or agent, and not with a view to the resale or distribution of any
part thereof, and the undersigned has no present intention of selling, granting
any participation in, or otherwise distributing the DynEco Shares or any portion
thereof. Further, the undersigned does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to all or any
portion of the DynEco Shares.

 

2.          No Securities Act Registration. The undersigned understands that the
DynEco Shares have not been registered under the Securities Act of 1933, as
amended (the “Securities Act”), by reason of a specific exemption or specific
exemptions from the registration provisions of the Securities Act which depend
upon, among other things, the bona fide nature of The undersigned’ investment
intent as expressed herein.

 

3.           Restricted Securities. The undersigned acknowledges that, unless
the undersigned has been advised by the Company that a current registration
statement is in effect covering the resale of the DynEco Shares, because the
DynEco Shares have not been registered under the Securities Act, the DynEco
Shares must be held by the undersigned indefinitely unless subsequently
registered under the Securities Act or an exemption from such registration is
available. The undersigned is aware of the provision of Rule 144 promulgated
under the Securities Act that permits the limited resale of shares purchased in
a private placement subject to the satisfaction of certain conditions,
including, among other things, the satisfaction of having held the DynEco Shares
for a certain duration of time, the availability of certain current public
information about the Company, the sale being through a “broker’s transaction”
[as provided by Rule 144(f)), and the volume of shares sold not exceeding
specified limitations (unless the sale is within the requirements of Rule
144(k)].

 

4.            Accredited and Sophisticated Investor. The undersigned: (a) is an
accredited investor as defined in Rule 501(a) of Regulation D of the Securities
and Exchange Commission; or, (b)(i) either alone or with the undersigned’s
professional advisor or advisors, has such knowledge and experience in financial
and business matters as to be capable of evaluating the

 

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merits and risks of acquiring the DynEco Shares, and (c) is able to bear the
economic risk of the investment in the DynEco Shares, including a complete loss
of the investment.

 

5.           Opportunity to Ask Questions. The undersigned has had an
opportunity to ask questions of and receive answers from the DynEco or its
representatives concerning the terms of the undersigned’ investment in the
DynEco Shares, all such questions have been answered to the full satisfaction of
the undersigned, and the undersigned has had the opportunity to request and
obtain any additional information the undersigned deemed necessary to verify or
supplement the information contained therein. The undersigned has reviewed and
understands the disclosure provided in DynEco’s SEC Reports (as such term is
defined in the Agreement).

 

6.           Investment Risks. The undersigned recognizes that an investment in
the DynEco Shares involves substantial risks, and is fully aware of and
understands all of the risk factors related to the acquisition of the DynEco
Shares. The undersigned has determined that the acquisition of the DynEco Shares
is consistent with the undersigned’s investment objectives. The undersigned is
able to bear the economic risks of an investment in the DynEco Shares, and at
the present time could afford a complete loss of such investment.

 

7.          Limitation on Manner of Offering. The DynEco Shares were not offered
to the undersigned by any means of general solicitation or general advertising.

 

8.           Tax and Other Matters. The undersigned is not relying on DynEco
with respect to tax and other economic considerations involved in the
acquisition of the DynEco Shares. The undersigned has carefully considered and
has, to the extent the undersigned believes such discussion necessary, discussed
with the undersigned’ professional, legal, tax, accounting and financial
advisors the suitability of an investment in the DynEco Shares for the
undersigned’s particular tax and financial situation and the undersigned has
determined that the DynEco Shares are a suitable investment for him.

 

9.          Restrictive Legends. The undersigned understands that the DynEco
Shares shall bear one or more of the following restrictive legends:

 

 

(a)

“THESE SECURITIES HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”) OR THE SECURITIES LAWS OF ANY STATE. THEY MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT
THAT SUCH REGISTRATION AND QUALIFICATION UNDER THE ACT AND SUCH LAWS IS NOT
REQUIRED”

 

 

(b)

Any legend required by applicable state law.

 

22

 

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10.        Successors. The representations and warranties contained herein shall
be binding upon the heirs, executors, administrators, personal representatives
and other successors of the undersigned and shall inure to the benefit of and be
enforceable by DynEco.

 

11.         Address. The address, telephone number and facsimile number set
forth at the end of this letter are the undersigned’s true and correct address.

 

12.         Counsel. The undersigned has had the opportunity to discuss this
letter and the Agreement with counsel of its selection and the undersigned has
availed itself of the opportunity to do so to the extent he desires. The
undersigned is not relying upon the advice of DynEco or counsel to DynEco to
advise the undersigned in connection with the risks and merits of consummating
the transactions contemplated by the Agreement.

 

 

 

SHAREHOLDER

 

 

 

________________________________

 

(Signature)

 

 

 

 

Address:

_______________________

 

 

_______________________

 

 

_______________________

 

 

Telephone:

_______________________

 

 

Social Security Number_______________

 

23

 

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EXHIBIT C

 

FORM OF

STATEMENT OF DESIGNATIONS

FOR SERIES A PREFERRED STOCK

OF

DYNECO CORPORATION

[Under Section 302A.401(3) of the Minnesota Business Corporation Act]

 

The undersigned, being the President of DYNECO CORPORATION., a corporation
organized and existing under and by virtue of the Minnesota Business Corporation
Act (the "Corporation"), and being duly authorized to do so, does hereby certify
that the following resolutions were duly adopted by the Board of Directors of
the Corporation as required by Section 302A.401(3) of the Minnesota Business
Corporation Act:

 

RESOLVED, that by virtue of the authority contained in the Articles of
Incorporation of the Corporation, the Corporation has authority to issue
20,000,000 shares of $.01 par value per share preferred stock, the designation
and amount thereof and series, together with the powers, preferences, rights,
qualifications, limitations or restrictions thereof, to be determined by the
Board of Directors pursuant to the applicable laws of the State of Minnesota.

 

RESOLVED, that pursuant to the authority granted to the Board of Directors under
the Articles of Incorporation, there is hereby created a series of preferred
stock, to be denominated as the Corporation’s Series A preferred stock,
consisting of 350,000 shares of preferred stock, $.01 par value per share,
having the rights, preferences, privileges, powers and limitations set forth
below.

 

RESOLVED, that of the 20,000,000 shares of preferred stock, par value $.01 per
share, authorized pursuant to the Articles of Incorporation, as amended, 350,000
of such shares are hereby designated as “Series A Preferred Stock.” The powers,
designations, preferences, rights, privileges, qualifications, limitations and
restrictions applicable to the Series A Preferred Stock are as follows:

 

A.           Designation. There is hereby designated a series of Preferred Stock
denominated as “Series A Preferred Stock,” consisting of 350,000 shares, $.01
par value per share, having the powers, preferences, rights and limitations
herein set forth.

 

B.           Liquidation Rights. The holders of the Series A Preferred Stock
shall have liquidation rights pari passu with holders of the Corporation’s
Common Stock.

 

C.           Conversion. Each share of Series A Preferred Stock shall
automatically be converted, without further action or consent of the holders of
the Series A Preferred Stock, into shares of the Corporation’s Common Stock, at
the rate of 1,000 shares of Common Stock for each share of Series A Preferred
Stock, at such time as the Corporation’s Articles of Incorporation have been
amended to authorize the issuance of a number of shares of Common Stock
sufficient to permit the shares of Series A Preferred Stock to be converted
pursuant to this provision to be so converted.

 

24

 

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D.           Voting Rights. The holders of the Series A Preferred Stock (a)
shall be entitled to notice of all matters submitted to a vote of holders of the
Corporation’s Common Stock, in the same manner as such notice is provided to
holders of the Common Stock, (b) shall vote as a group with holders of the
Corporation’s Common Stock on all matters submitted to a vote of the
Corporation’s shareholders and (c) shall be entitled to 1,000 votes per share of
Series A Preferred Stock on any and all matters brought to a vote of the
Corporation’s shareholders. Except as otherwise set forth herein, holders of
Series A Preferred Stock shall have not have class voting rights on any matter.

 

E.           Protective Provisions. So long as shares of Series A Preferred
Stock are outstanding, the Corporation shall not, without first obtaining the
approval of the holders of at least a majority of the then outstanding shares of
Series A Preferred Stock:

 

 

•

Alter or change the rights, preferences or privileges of the shares of Series A
Preferred Stock so as to affect adversely the Series A Preferred Stock; or

 

 

•

Do any act or thing not authorized or contemplated by this Designation which
would result in taxation of the holders of shares of the Series A Preferred
Stock under Section 305 of the Internal Revenue Code of 1986, as amended (or any
comparable provision of the Internal Revenue Code as hereafter from time to time
amended).

 

F.            Redemption of Series A Preferred Stock. The holders of the Series
A Preferred Stock shall have redemption rights pari passu with holders of the
Corporation’s Common Stock.

 

G.           Dividends. The holders of the Series A Preferred Stock shall have
dividend rights pari passu with holders of the Corporation’s Common Stock.

 

H.           Preferences. Subject to the provisions of the Series A Preferred
Stock set forth herein, nothing herein shall be construed to prevent the Board
of Directors of the Corporation from issuing one or more series of preferred
stock with such preferences as may be determined by the Board of Directors, in
its discretion.

 

I.             Amendments. Subject to Section E above, the designation, number
of, and voting powers, designations, preferences, limitations, restrictions and
relative rights of the Series A Preferred Stock may be amended by a resolution
of the Board of Directors.

 

The foregoing resolutions and amendment were duly adopted by the Board of
Directors of the Corporation by Unanimous Written Consent in Lieu of Meeting
dated January __, 2006.

 

25

 

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IN WITNESS WHEREOF, the undersigned, being the President of the Corporation has
executed this Statement of Designations as of January __, 2006.

 

DYNECO CORPORATION

 

 

 

By:

__________________________

Dr. Thomas C. Edwards

President

 

26

 

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EXHIBIT D

 

SCHEDULE OF INDEBTEDNESS OF DYNECO CORPORATION

 

27

 

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SCHEDULE E

 

SCHEDULE OF CONVERTIBLE NOTES, WARRANTS AND OPTIONS OF DYNAMIC

 

28

 

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