Exhibit 10.1

MODIFICATION AND WAIVER AGREEMENT

This Modification and Waiver Agreement (“Agreement”) dated as of June 4, 2007 is
entered into by and among Dynamic Leisure Corporation, a Minnesota corporation
(the “Company”) and the subscribers and Finders identified on the signature page
hereto (each herein a “Subscriber” and collectively “Subscribers” or the
“Parties”).

WHEREAS, the Company and the Subscribers are parties to Subscription Agreements
(“Subscription Agreements”) dated March 2, 2005 relating to an aggregate
investment of $327,000 by Subscribers in secured convertible notes (“Notes”)
convertible into Common Stock of the Company and Common Stock Purchase Warrants
(“Warrants”);

WHEREAS, the Company and the Subscribers are parties to a Modification and
Waiver Agreement dated as of January 13, 2006 pursuant to which the terms of the
Notes were amended by the Parties; and

WHEREAS, the Company is in default of material terms of the Notes; and

WHEREAS, the Company and Subscribers desire to restructure the terms of the
Notes to their mutual benefit.

NOW THEREFORE, in consideration of the mutual covenants and other agreements
contained in this Agreement, the Company and the Subscribers hereby agree as
follows:

1.             All the capitalized terms employed herein shall have the meanings
attributed to them in the Subscription Agreements and the documents and
agreements delivered therewith (“Transaction Documents”).

 

2.

The Note is amended as follows:

(a)           The principal amount of the Notes are amended as set forth in
Schedule A attached hereto.

(b)           The Note shall bear simple interest at the rate of five percent
(5%) per annum beginning from the date of this Agreement.

 

(c)

Interest shall accrue and be payable on any Conversion Date or the Maturity Date

 

(d)

The Maturity Date of the Note is hereby extended to December 4, 2007.

 

(e)

The Fixed Conversion Price is $0.75.

 

(f)

Section 3.4(b)(D) is amended as follows:

 

“Share Issuance. So long as this Note is outstanding, if the Borrower shall
issue any Common Stock except for the Excepted Issuances (as set forth below),
prior to the complete conversion of this Note for a consideration less than
$0.485 per share, then, and thereafter successively upon each such issuance, the
Fixed Conversion Price shall be reduced to such other lower issue price. For
purposes of this adjustment, the issuance of any security or debt instrument of
the Borrower carrying the right to convert such security or debt instrument into
Common Stock or of any warrant, right or option to purchase Common Stock shall
result in an adjustment to the Fixed Conversion Price upon the issuance of the
above-described security, debt instrument, warrant, right, or option and again
upon the issuance of shares of Common Stock upon exercise of such conversion or
purchase rights if such issuance is at a price lower than the then applicable
Conversion Price. The reduction of the Fixed Conversion Price described in this
paragraph is in addition to the other rights of the Holder described herein.

For purposes of this Section 3.4(b)(D), Excepted Issuances means (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

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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 Note; (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; (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.

 

3.

Section 3.4 of the Warrants shall be amended as follows:

“Share Issuance. Until the Expiration Date, if the Company shall issue any
Common Stock except for the Excepted Issuances (as set forth below), prior to
the complete exercise of this Warrant for a consideration less than $0.485 per
share, then, and thereafter successively upon each such issuance, the Purchase
Price shall be reduced to such other lower issue price. For purposes of this
adjustment, the issuance of any security or debt instrument of the Company
carrying the right to convert such security or debt instrument into Common Stock
or of any warrant, right or option to purchase Common Stock shall result in an
adjustment to the Purchase Price upon the issuance of the above-described
security, debt instrument, warrant, right, or option and again upon the issuance
of shares of Common Stock upon exercise of such conversion or purchase rights if
such issuance is at a price lower than the then applicable Conversion Price. The
reduction of the Purchase Price described in this paragraph is in addition to
the other rights of the Holder described herein.

For purposes of this Section 3.4, Excepted Issuances means the issuance of (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; (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.

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4.             The Subscribers waive exercise of the remedies and rights
available to them for Events of Default existing as of the Modification
Effective Date and the payment of liquidated or other damages related thereto.

5.             The Subscribers agree to convert an aggregate $150,000 of the
amount owed on the Notes, proportionate to the amount owed to each Subscriber as
set forth in Schedule A, into shares of the Company’s Common Stock effective as
of the date of this Agreement (the “Conversion”). Upon the Conversion the
Company will issue shares to the Subscriber in the amounts set forth in Schedule
B (the “Converted Shares”).

6.             The Converted Shares must be delivered to the Subscribers no
later than 5 business day after the date of this Agreement.

7.             The holding period of the Notes and any stock issued upon the
Conversion and future conversion of the Notes tacks back to the original issue
date of the Notes for Rule 144 purposes and all stock will be issued without any
restrictive legend in accordance with Rule 144(k).

8.             All other terms and conditions of the Transaction Documents,
including the accrual of regular interest shall remain in full force and effect
and payable.

9.             This Modification and Waiver Agreement may be executed in two or
more counterparts, all of which when taken together shall be considered one and
the same agreement and shall become effective when counterparts have been signed
by each party and delivered to any other party, it being understood that all
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
were an original thereof. A copy of this Agreement annexed to the Note or
Warrants shall be sufficient to reflect the amendment thereto.

10.          Each of the undersigned states that he has read the foregoing
Agreement and understands and agrees to it.

 

 

DYNAMIC LEISURE CORPORATION

 

the “Company”

 

 

By: /s/ Daniel Brandano, President

 

/s/ Konrad Ackerman

/s/ Jeffrey Rubin

ALPHA CAPITAL AKTIENGESELLSCHAFT

JM INVESTORS, LLC

(“Subscriber”)

(“Subscriber”)

 

 

/s/ Seymore Brau

/s/ Jeffrey Rubin

LIBRA FINANCE, S.A. (“Finder”)

JM INVESTORS, LLC (“Finder”)

 

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Schedule A

 

 

Subscriber

 

New Principle
Amount

 

New Principal
being Converted

 

Amount Owing
after Conversion

Alpha Capital Anstalt (Subscriber)

 

$

262,154.52

 

$

92,898.47

 

$

169,256.05

JM Investors, LLC (Subscriber)

 

$

131,077.26

 

$

46,449.23

 

$

84,628.03

JM Investors, LLC (Finder)

 

$

16,224.16

 

$

5,749.28

 

$

10,474.88

Libra Finance, S.A. (Finder)

 

$

13,836.06

 

$

4,903.02

 

$

8,933.04

Total

 

$

423,292.00

 

$

150,000.00

 

$

273,292.00

 

 

 

Schedule B

 

 

Subscriber

 

Shares to be received
upon conversion

Alpha Capital Anstalt

 

123,865

JM Investors, LLC

 

61,932

JM Investors, LLC

 

7,666

Libra Finance, S.A.

 

6,537

Total

 

200,000

 

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