Exhibit 10.1

 

SETTLEMENT AGREEMENT

 

This Settlement Agreement (“Agreement”) dated as of July 31, 2007 is entered
into by and among Dynamic Leisure Corporation, a Minnesota corporation (the
“Company”) and the subscribers identified on the signature page hereto (the
“Subscribers”).

 

WHEREAS, the Company and the Subscribers are parties to a Securities Purchase
Agreement (“Purchase Agreement”) dated November 9, 2006 pursuant to which
Subscribers purchased 6% secured convertible notes of the Company in the
aggregate principal amount of One Million Dollars ($1,000,000) (“Notes”)
convertible into Common Stock of the Company and Common Stock Purchase Warrants
(“Warrants”) (the “Financing”);

 

WHEREAS, in connection with the Financing the Company and the Subscribers
entered into a Security Agreement, Intellectual Property Security Agreement and
Registration Rights Agreement (the “Ancillary Agreements”);

 

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

 

WHEREAS, the Parties mutually desire to resolve all claims that each may have
against the other, including but not limited to any and all outstanding claims
arising out of the Purchase Agreement, the Note, the Warrant or the Ancillary
Agreements, and forever release the other party from any liability whatsoever,
except as may otherwise be set forth below in this Agreement.

 

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.   Consideration. The Company shall pay to the Subscribers $1.2 million in
immediately available funds and agrees to issue to the Subscribers an aggregate
of 500,000 shares of the Company’s common stock (the “Shares”), in full
satisfaction of all of the Company’s obligations under the Notes, the Securities
Purchase Agreement and the Ancillary Agreements. The Shares shall be evidenced
by certificates bearing the following restrictive legend:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY OTHER APPLICABLE
SECURITIES LAWS, AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT AND SUCH OTHER SECURITIES LAWS, IF
APPLICABLE. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED,
ENCUMBERED, HYPOTHECATED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, OR PURSUANT TO A TRANSACTION
THAT IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION REQUIREMENTS.

 

2.         Cancellation of Agreements. Upon the payment of the cash
consideration and the issuance of the Shares, the Purchase Agreement, the Notes
and the Ancillary Agreements shall be cancelled and of no further force and
effect.

 

3.         Termination of Security Interest. Upon the payment of the
Consideration, the security interest granted pursuant to the Security Agreement
shall terminate and all rights to the Collateral shall revert to Company. Upon
such termination Subscribers hereby authorizes Company to file any UCC
termination statements necessary to effect such termination and Subscribers will
execute and deliver to Company any additional documents or instruments as
Company shall reasonably request to evidence such termination.

 

4.         Amendment of Warrants. In addition, the terms and conditions of the
Warrants shall be amended as set forth in Exhibit A attached hereto.

 

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5.         Release by Subscribers. In consideration for the Company’s promise
pay to the Subscribers $1.2 million as set forth above and the other
consideration as set forth herein, the Subscribers hereby release and forever
discharge the Company and any and all of its past, present and future affiliated
entities, licensees, partners, shareholders, independent contractors, parent
corporations, subsidiary corporations, successors, agents, directors, officers,
assigns, employees, representatives, insurers, attorneys, and all others
(“Company Affiliates”) of and from all claims, demands, liabilities, debts,
obligations, accounts, actions and causes of action, including claims arising
out of or in any way associated with the acts or omissions of the Company or the
Company Affiliates. This includes, but is not limited to, any and all claims for
breach of contract, claims for breach of fiduciary duty, claims for outstanding
interest, claims of entitlement to securities, claims for violations of
securities laws or regulations, or civil claims of any other kind including any
and all claims for punitive damages.

 

6.         Release by Company. In consideration for the Subscribers’ release of
any and all claims against the Company and the Company Affiliates as set forth
above, the Company hereby releases and forever discharges the Subscribers and
any and all of their past, present and future affiliated entities, licensees,
partners, shareholders, independent contractors, parent corporations, subsidiary
corporations, successors, agents, directors, officers, assigns, employees,
representatives, insurers, attorneys, and all others (“Subscriber Affiliates”)
of and from all claims, demands, liabilities, debts, obligations, accounts,
actions and causes of action, including claims arising out of or in any way
associated with the acts or omissions of the Subscribers or the Subscriber
Affiliates. This includes, but is not limited to, any and all claims for breach
of contract, claims for breach of fiduciary duty, claims for outstanding
interest, claims of entitlement to securities, claims for violations of
securities laws or regulations, or civil claims of any other kind including any
and all claims for punitive damages.

 

7.         Miscellaneous. This Settlement 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.

 

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

 

IN WITNESS WHEREOF, the undersigned Subscribers and the Company have caused this
Agreement to be duly executed as of the date first above written.

 

DYNAMIC LEISURE CORPORATION

 

/s/ Daniel G. Brandano

Daniel G. Brandano

Chief Executive Officer

 

SUBSCRIBERS

 

AJW PARTNERS, LLC

By: SMS Group, LLC

 

/s/ Corey S. Ribotsky

Corey S. Ribotsky

Manager

 

RESIDENCE: Delaware

 

ADDRESS:

1044 Northern Boulevard

 

Suite 302

 

Roslyn, New York 11576

 

Facsimile: (516) 739-7115

 

Telephone: (516) 739-7110

 

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AJW OFFSHORE, LTD.

By: First Street Manager II, LLC

 

/s/ Corey S. Ribotsky

Corey S. Ribotsky

Manager

 

RESIDENCE: Cayman Islands

 

ADDRESS:

AJW Offshore, Ltd.

 

P.O. Box 32021 SMB

 

Grand Cayman, Cayman Island, B.W.I.

 

AJW QUALIFIED PARTNERS, LLC

By: AJW Manager, LLC

 

/s/ Corey S. Ribotsky

Corey S. Ribotsky

Manager

 

RESIDENCE: New York

 

ADDRESS:

1044 Northern Boulevard

 

Suite 302

 

Roslyn, New York 11576

 

Facsimile: (516) 739-7115

 

Telephone: (516) 739-7110

 

NEW MILLENNIUM CAPITAL PARTNERS II, LLC

By: First Street Manager II, LLP

 

/s/ Corey S. Ribotsky

Corey S. Ribotsky

Manager

 

RESIDENCE: New York

 

ADDRESS:

1044 Northern Boulevard

 

Suite 302

 

Roslyn, New York 11576

 

Facsimile: (516) 739-7115

 

Telephone: (516) 739-7110

 

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AMENDED AND RESTATED STOCK PURCHASE WARRANT

THIS CERTIFIES THAT, for value received, ___________ or its registered assigns,
is entitled to purchase from Dynamic Leisure Corporation, a Minnesota
corporation (the “Company”), at any time or from time to time during the period
specified in Paragraph 2 hereof, ________ fully paid and nonassessable shares of
the Company’s Common Stock, par value $.01 per share (the “Common Stock”), at an
exercise price per share equal to $1.50 (the “Exercise Price”). The term
“Warrant Shares,” as used herein, refers to the shares of Common Stock
purchasable hereunder.

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

Section 1.        Manner of Exercise; Issuance of Certificates; Payment for
Shares. Subject to the provisions hereof, this Warrant may be exercised by the
holder hereof, in whole or in part, by the surrender of this Warrant, together
with a completed exercise agreement in the form attached hereto (the “Exercise
Agreement”), to the Company during normal business hours on any business day at
the Company’s principal executive offices (or such other office or agency of the
Company as it may designate by notice to the holder hereof), and upon (i)
payment to the Company in cash, by certified or official bank check or by wire
transfer for the account of the Company of the Exercise Price for the Warrant
Shares specified in the Exercise Agreement. The Warrant Shares so purchased
shall be deemed to be issued to the holder hereof or such holder’s designee, as
the record owner of such shares, as of the close of business on the date on
which this Warrant shall have been surrendered, the completed Exercise Agreement
shall have been delivered, and payment shall have been made for such shares as
set forth above. Certificates for the Warrant Shares so purchased, representing
the aggregate number of shares specified in the Exercise Agreement, shall be
delivered to the holder hereof within a reasonable time after this Warrant shall
have been so exercised. The certificates so delivered shall be registered in the
name of such holder or such other name as shall be designated by such holder. If
this Warrant shall have been exercised only in part, then, unless this Warrant
has expired, the Company shall, at its expense, at the time of delivery of such
certificates, deliver to the holder a new Warrant representing the number of
shares with respect to which this Warrant shall not then have been exercised.

Notwithstanding anything in this Warrant to the contrary, in no event shall the
holder of this Warrant be entitled to exercise a number of Warrants (or portions
thereof) in excess of the number of Warrants (or portions thereof) upon exercise
of which the sum of (i) the number of shares of Common Stock beneficially owned
by the holder and its affiliates (other than shares of Common Stock which may be
deemed beneficially owned through the ownership of the unexercised Warrants and
the unexercised or unconverted portion of any other securities of the Company
(including the Notes (as defined in the Securities Purchase Agreement)) subject
to a limitation on conversion or exercise analogous to the limitation contained
herein) and (ii) the number of shares of Common Stock issuable upon exercise of
the Warrants (or portions thereof) with respect to which the determination
described herein is being made, would result in beneficial ownership by the
holder and its affiliates of more than 4.9% of the outstanding shares of Common
Stock. For purposes of the immediately preceding sentence, beneficial ownership
shall be determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended, and Regulation 13D-G thereunder, except as otherwise
provided in clause (i) of the preceding sentence. Notwithstanding anything to
the contrary contained herein, the limitation on exercise of this Warrant set
forth herein may not be amended without (i) the written consent of the holder
hereof and the Company and (ii) the approval of a majority of shareholders of
the Company.

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Section 2.        Period of Exercise. This Warrant is exercisable at any time or
from time to time on or after the date on which this Warrant is issued and
delivered pursuant to the terms of the Securities Purchase Agreement and before
6:00 p.m., New York, New York time on the seventh (7th) anniversary of the date
of issuance (the “Exercise Period”).

Section 3.        Mandatory Exercise Of Warrant. The Company shall have the
right to require the exercise of this Warrant in whole or in part, if (i) the
Common Stock underlying the Warrant has been registered on a registration
statement declared effective by the Securities Exchange Commission, and such
registration statement is effective, and (ii) the average closing bid price of
the Company’s Common Stock as quoted on the Principal Market (as reported by
Bloomberg Financial Markets (“Bloomberg”) through its “Volume at Price”
function) for the ten (10) trading days immediately prior to the proposed date
of the mandatory exercise of the Warrant is greater than or equal to $2.00 per
share. For purposes of this paragraph “Principal Market” means the New York
Stock Exchange, the American Stock Exchange, the Nasdaq National Market, the
Nasdaq SmallCap Market, whichever is at the time the principal trading exchange
or market for such security, or the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg or, if no bid or sale
information is reported for such security by Bloomberg, then the average of the
bid prices of each of the market makers for such security as reported in the
“pink sheets” by the National Quotation Bureau, Inc.

Section 4.        Certain Agreements of the Company. The Company hereby
covenants and agrees as follows:

(a)        Shares to be Fully Paid. All Warrant Shares will, upon issuance in
accordance with the terms of this Warrant, be validly issued, fully paid, and
nonassessable and free from all taxes, liens, and charges with respect to the
issue thereof.

(b)       Reservation of Shares. The Company shall at all times have authorized,
and reserved for the purpose of issuance upon exercise of this Warrant, a
sufficient number of shares of Common Stock to provide for the exercise of this
Warrant.

(c)        Certain Actions Prohibited. The Company will not, by amendment of its
charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other impairment, consistent with the tenor and purpose of
this Warrant. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Common Stock receivable upon
the exercise of this Warrant above the Exercise Price then in effect, and (ii)
will take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant.

(d)       Successors and Assigns. This Warrant will be binding upon any entity
succeeding to the Company by merger, consolidation, or acquisition of all or
substantially all the Company’s assets.

Section 5.        Antidilution Provisions. During the Exercise Period, the
Exercise Price and the number of Warrant Shares shall be subject to adjustment
from time to time as provided in this Paragraph 5. In the event that any
adjustment of the Exercise Price as required herein results in a fraction of a
cent, such Exercise Price shall be rounded up to the nearest cent.

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(a)        Subdivision or Combination of Common Stock. If the Company at any
time subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced. If the Company at any
time combines (by reverse stock split, recapitalization, reorganization,
reclassification or otherwise) the shares of Common Stock acquirable hereunder
into a smaller number of shares, then, after the date of record for effecting
such combination, the Exercise Price in effect immediately prior to such
combination will be proportionately increased.

(b)       Adjustment in Number of Shares. Upon each adjustment of the Exercise
Price pursuant to the provisions of this Paragraph 4, the number of shares of
Common Stock issuable upon exercise of this Warrant shall be adjusted by
multiplying a number equal to the Exercise Price in effect immediately prior to
such adjustment by the number of shares of Common Stock issuable upon exercise
of this Warrant immediately prior to such adjustment and dividing the product so
obtained by the adjusted Exercise Price.

(c)        Consolidation, Merger or Sale. In case of any consolidation of the
Company with, or merger of the Company into any other corporation, or in case of
any sale or conveyance of all or substantially all of the assets of the Company
other than in connection with a plan of complete liquidation of the Company,
then as a condition of such consolidation, merger or sale or conveyance,
adequate provision will be made whereby the holder of this Warrant will have the
right to acquire and receive upon exercise of this Warrant in lieu of the shares
of Common Stock immediately theretofore acquirable upon the exercise of this
Warrant, such shares of stock, securities or assets as may be issued or payable
with respect to or in exchange for the number of shares of Common Stock
immediately theretofore acquirable and receivable upon exercise of this Warrant
had such consolidation, merger or sale or conveyance not taken place. In any
such case, the Company will make appropriate provision to insure that the
provisions of this Paragraph 4 hereof will thereafter be applicable as nearly as
may be in relation to any shares of stock or securities thereafter deliverable
upon the exercise of this Warrant. The Company will not effect any
consolidation, merger or sale or conveyance unless prior to the consummation
thereof, the successor corporation (if other than the Company) assumes by
written instrument the obligations under this Paragraph 4 and the obligations to
deliver to the holder of this Warrant such shares of stock, securities or assets
as, in accordance with the foregoing provisions, the holder may be entitled to
acquire.

(d)       Distribution of Assets. In case the Company shall declare or make any
distribution of its assets (including cash) to holders of Common Stock as a
partial liquidating dividend, by way of return of capital or otherwise, then,
after the date of record for determining shareholders entitled to such
distribution, but prior to the date of distribution, the holder of this Warrant
shall be entitled upon exercise of this Warrant for the purchase of any or all
of the shares of Common Stock subject hereto, to receive the amount of such
assets which would have been payable to the holder had such holder been the
holder of such shares of Common Stock on the record date for the determination
of shareholders entitled to such distribution.

(e)        Notice of Adjustment. Upon the occurrence of any event which requires
any adjustment of the Exercise Price, then, and in each such case, the Company
shall give notice thereof to the holder of this Warrant, which notice shall
state the Exercise Price resulting from such adjustment and the increase or
decrease in the number of Warrant Shares purchasable at such price upon
exercise, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based. Such calculation shall be certified
by the Chief Financial Officer of the Company.

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Section 6.        Minimum Adjustment of Exercise Price. No adjustment of the
Exercise Price shall be made in an amount of less than 1% of the Exercise Price
in effect at the time such adjustment is otherwise required to be made, but any
such lesser adjustment shall be carried forward and shall be made at the time
and together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such
Exercise Price.

Section 7.        No Fractional Shares. No fractional shares of Common Stock are
to be issued upon the exercise of this Warrant, but the Company shall pay a cash
adjustment in respect of any fractional share which would otherwise be issuable
in an amount equal to the same fraction of the Market Price of a share of Common
Stock on the date of such exercise.

Section 8.        Other Notices. In case at any time:

(a)        the Company shall declare any dividend upon the Common Stock payable
in shares of stock of any class or make any other distribution (including
dividends or distributions payable in cash out of retained earnings) to the
holders of the Common Stock;

(b)       the Company shall offer for subscription pro rata to the holders of
the Common Stock any additional shares of stock of any class or other rights;

(c)        there shall be any capital reorganization of the Company, or
reclassification of the Common Stock, or consolidation or merger of the Company
with or into, or sale of all or substantially all its assets to, another
corporation or entity; or

(d)       there shall be a voluntary or involuntary dissolution, liquidation or
winding up of the Company;

then, in each such case, the Company shall give to the holder of this Warrant
(a) notice of the date on which the books of the Company shall close or a record
shall be taken for determining the holders of Common Stock entitled to receive
any such dividend, distribution, or subscription rights or for determining the
holders of Common Stock entitled to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up and (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, notice of
the date (or, if not then known, a reasonable approximation thereof by the
Company) when the same shall take place. Such notice shall also specify the date
on which the holders of Common Stock shall be entitled to receive such dividend,
distribution, or subscription rights or to exchange their Common Stock for stock
or other securities or property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, or
winding-up, as the case may be. Such notice shall be given at least 30 days
prior to the record date or the date on which the Company’s books are closed in
respect thereto. Failure to give any such notice or any defect therein shall not
affect the validity of the proceedings referred to in clauses (i), (ii), (iii)
and (iv) above.

Section 9.        Issue Tax. The issuance of certificates for Warrant Shares
upon the exercise of this Warrant shall be made without charge to the holder of
this Warrant or such shares for any issuance tax or other costs in respect
thereof, provided that the Company shall not be required to pay any tax which
may be payable in respect of any transfer involved in the issuance and delivery
of any certificate in a name other than the holder of this Warrant.

Section 10.      No Rights or Liabilities as a Shareholder. This Warrant shall
not entitle the holder hereof to any voting rights or other rights as a
shareholder of the Company. No provision of this Warrant, in the absence of
affirmative action by the holder hereof to purchase Warrant Shares, and no mere
enumeration herein of the rights or privileges of the holder hereof, shall give
rise to any liability of such holder for the Exercise Price or as a shareholder
of the Company, whether such liability is asserted by the Company or by
creditors of the Company.

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Section 11.      Transfer, Exchange, and Replacement of Warrant.

(a)        Restriction on Transfer. This Warrant and the rights granted to the
holder hereof are transferable, in whole or in part, upon surrender of this
Warrant, together with a properly executed assignment in the form attached
hereto, at the office or agency of the Company referred to in Paragraph 16(e)
below, provided, however, that any transfer or assignment shall be subject to
the conditions set forth in Paragraph 16(f) hereof and to the applicable
provisions of the Securities Purchase Agreement. Until due presentment for
registration of transfer on the books of the Company, the Company may treat the
registered holder hereof as the owner and holder hereof for all purposes, and
the Company shall not be affected by any notice to the contrary.

(b)       Warrant Exchangeable for Different Denominations. This Warrant is
exchangeable, upon the surrender hereof by the holder hereof at the office or
agency of the Company referred to in Paragraph 7(e) below, for new Warrants of
like tenor representing in the aggregate the right to purchase the number of
shares of Common Stock which may be purchased hereunder, each of such new
Warrants to represent the right to purchase such number of shares as shall be
designated by the holder hereof at the time of such surrender.

(c)        Replacement of Warrant. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant and, in the case of any such loss, theft, or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

(d)       Cancellation; Payment of Expenses. Upon the surrender of this Warrant
in connection with any transfer, exchange, or replacement as provided in this
Paragraph 7, this Warrant shall be promptly canceled by the Company.

(e)        Register. The Company shall maintain, at its principal executive
offices (or such other office or agency of the Company as it may designate by
notice to the holder hereof), a register for this Warrant, in which the Company
shall record the name and address of the person in whose name this Warrant has
been issued, as well as the name and address of each transferee and each prior
owner of this Warrant.

(f)        Exercise or Transfer Without Registration. If, at the time of the
surrender of this Warrant in connection with any exercise, transfer, or exchange
of this Warrant, this Warrant (or, in the case of any exercise, the Warrant
Shares issuable hereunder), shall not be registered under the Securities Act of
1933, as amended (the “Securities Act”) and under applicable state securities or
blue sky laws, the Company may require, as a condition of allowing such
exercise, transfer, or exchange, (i) that the holder or transferee of this
Warrant, as the case may be, furnish to the Company a written opinion of
counsel, which opinion and counsel are acceptable to the Company, to the effect
that such exercise, transfer, or exchange may be made without registration under
said Act and under applicable state securities or blue sky laws, (ii) that the
holder or transferee execute and deliver to the Company an investment letter in
form and substance acceptable to the Company and (iii) that the transferee be an
“accredited investor” as defined in Rule 501(a) promulgated under the Securities
Act; provided that no such opinion, letter or status as an “accredited investor”
shall be required in connection with a transfer pursuant to Rule 144 under the
Securities Act. The first holder of this Warrant, by taking and holding the
same, represents to the Company that such holder is acquiring this Warrant for
investment and not with a view to the distribution thereof.

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Section 12.      Notices. All notices, requests, and other communications
required or permitted to be given or delivered hereunder to the holder of this
Warrant shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to such holder at the address shown for such holder on
the books of the Company, or at such other address as shall have been furnished
to the Company by notice from such holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at 5680A W. Cypress Street,
Tampa, FL 33607, Attention: Chief Executive Officer, or at such other address as
shall have been furnished to the holder of this Warrant by notice from the
Company. Any such notice, request, or other communication may be sent by
facsimile, but shall in such case be subsequently confirmed by a writing
personally delivered or sent by certified or registered mail or by recognized
overnight mail courier as provided above. All notices, requests, and other
communications shall be deemed to have been given either at the time of the
receipt thereof by the person entitled to receive such notice at the address of
such person for purposes of this Paragraph 9, or, if mailed by registered or
certified mail or with a recognized overnight mail courier upon deposit with the
United States Post Office or such overnight mail courier, if postage is prepaid
and the mailing is properly addressed, as the case may be.

Section 13.      Governing Law. THIS WARRANT SHALL BE ENFORCED, GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK,
NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS
ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT
SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
THIS WARRANT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
DISPUTE.

Section 14.      Miscellaneous.

(a)        Amendments. This Warrant and any provision hereof may only be amended
by an instrument in writing signed by the Company and the holder hereof.

(b)       Descriptive Headings. The descriptive headings of the several
paragraphs of this Warrant are inserted for purposes of reference only, and
shall not affect the meaning or construction of any of the provisions hereof.

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(c)        Remedies. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the holder, by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
under this Warrant will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Warrant, that the
holder shall be entitled, in addition to all other available remedies at law or
in equity, and in addition to the penalties assessable herein, to an injunction
or injunctions restraining, preventing or curing any breach of this Warrant and
to enforce specifically the terms and provisions thereof, without the necessity
of showing economic loss and without any bond or other security being required.

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
authorized officer.

 

DYNAMIC LEISURE CORPORATION

 

 

By:

/s/ Daniel G. Brandano

 

Daniel G. Brandano

 

Chief Executive Officer

 

Dated as of July 31, 2007

 

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