SETTLEMENT AGREEMENT AND RELEASE

Captive Audience, LLC, and its past, present and future officers, directors, members, parents, subsidiaries, affiliates, predecessors in interest and employees (hereinafter “Captive”) and PSI, Inc. (formerly known as Friendlyway, Inc.), and its past, present and future officers, directors, members, parents, subsidiaries, affiliates, predecessors in interest and employees (hereinafter “PSI”) have reached the following agreement as of November 13, 2006 (the “Settlement Agreement”).

WHEREAS , Captive and PSI are parties to a certain Asset Purchase Agreement (as amended by an addendum, dated July 31, 2006, and a rider, dated August 10, 2006) (hereinafter the “APA”) dated March 18, 2006, pursuant to which, on [August 22, 2006], PSI purchased from Captive the digital signage assets and contract rights described on the schedules attached to the APA (the “Acquired Assets”) for a purchase price of $2.4 million, consisting of (i) cash in the amount of $1.1 million payable in accordance with a payment schedule attached to the APA and (ii) 5,909,091 shares of common stock of PSI having an agreed value of $1.3 million (the “Acquisition Shares”);

WHEREAS , in connection with the purchase of the Acquired Assets, PSI made partial purchase price payments to Captive in the aggregate amount of $195,000 and other partial payments (the “Partial Payments”);

WHEREAS , certain disputes have arisen between the parties relating to Captive’s sale, assignment and transfer of the Acquired Assets and PSI’s payment of the purchase price therefor;

WHEREAS , on or about October 18, 2006, Captive advised PSI that it intended to commence a lawsuit against the PSI and/or its affiliates, Pantel Systems, Inc. and Ignition Media Group, Inc. (collectively with PSI, the “Purchaser Parties”), in the United States District Court, District of New Jersey, seeking, among other relief, a permanent injunction to prevent the Purchaser Parties from impairing Captive’s use of the Acquired Assets as well as damages based on allegations that the Purchaser Parties breached obligations owing to Captive under the APA;

WHEREAS , the action is currently pending under the caption Captive Audience, LLC v. Pantel Systems, Inc. a/k/a Friendlyway, Inc. and Ignition Media Group, Inc., Civil Action No. 06-5020 (JAG) (the “Action”);

WHEREAS , the parties now wish to rescind the transactions contemplated by the APA and settle this matter by resolving their differences amicably according to the conditions set forth herein.

NOW, THEREFORE , in consideration of the following covenants and agreements and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties have agreed as follows:

1.   Upon the execution of this Settlement Agreement, PSI shall pay to Greenbaum, Rowe, Smith & Davis LLP, as attorneys for Captive by either check from an attorney trust account or by wire transfer of immediately available funds, the amount of $90,000.00 (Ninety Thousand United States Dollars (the “Settlement Sum”). Effective upon receipt of the Settlement Sum, the purchase and sale of the Acquired Assets pursuant to the APA shall be deemed rescinded, terminated, cancelled and null and void ab initio , and the APA and all ancillary agreements executed in connection therewith or contemplated thereby (collectively with the APA, the “Transaction Documents”) shall be deemed rescinded, terminated, cancelled and null and void ab initio .

2.   Captive hereby agrees, for itself and on behalf of each of its members, that it relinquishes all right, title and interest in and to the Acquisition Shares. Likewise, PSI hereby agrees that it relinquishes all right, title and interest in and to any and all contracts, assignments and/or any assets of any kind whether or not included in the Acquired Assets that had anything to do with the purchase of assets from Captive. Captive hereby agrees to assume, pay and discharge any and all liabilities or obligations, regardless of when same shall have accrued, under such contracts and does hereby further agree to indemnify, defend and hold each Purchaser Party harmless from any losses, liabilities, costs, suits, judgments, claims or damages, which any Purchaser Party may suffer or incur in connection with any such contract. The parties further agree that Captive shall be entitled to retain the Partial Payments and that certain digital signage equipment of PSI currently in Captive’s possession or otherwise under its control, which equipment consists of five installed 42-inch LCD video screens and five 42-inch uninstalled LCD video screens.

3.   Upon receipt of the payment referred to in this Settlement Agreement, Captive shall immediately withdraw and dismiss the Action with prejudice and immediately deliver to PSI the original executed promissory note, dated August 21, 2006 (the “Promissory Note”), included in the Transaction Documents, which Promissory Note shall have been prominently marked “Cancelled” by an authorized officer of Captive.

4.   Captive, on behalf of its members, partners, shareholders, officers, directors, successors and assigns, hereby fully and forever releases and discharges each of the Purchaser Parties and all of their respective representatives, agents, attorneys, consultants, shareholders, officers, directors, employees, parents, subsidiaries, affiliates, successors and assigns from any and all claims, demands, losses, costs, damages, rights and causes of action, debts, liabilities and obligations whatsoever, at law or in equity, which Captive ever had, now has or may have against them with respect to the claims that were asserted or could have been asserted in the Action or that arose out of the Transaction Documents from the beginning of the world to the date hereof.

5.   PSI, on behalf of itself and the other Purchaser Pa