Common use of Conversion of Debentures Clause in Contracts

Conversion of Debentures. (a) As provided in paragraph 4 of the Debentures, Purchaser may give Notice of Conversion of the Debentures to PSI by facsimile to the number set forth in Section 10 below. Conversion of Debentures may take place at any time until the Maturity Date of the Debentures, as defined in the Debentures. As provided in paragraph 4 of the Debentures, within 10 business days of receipt of a Notice of Conversion, PSI shall deliver to the Purchaser giving such notice, or to an account designated by such Purchaser in the Notice of Conversion, certificates representing the shares of common stock to which the Purchaser shall be entitled by reason of the conversion ("CERTIFICATES"). Notwithstanding anything to the contrary contained in paragraph 4 of the Debentures, PSI may demand, in writing, that the Purchaser pay outstanding principal amounts of the Debentures ("DEMAND") even though Purchasers have not convened all or any amount of the Debentures into shares of common stock, as provided in subsections (A) and (B) below. The Demand is a provision for payment of the Debenture only. Conversions of the Debentures into shares of common stock shall be done in accordance with paragraph 4 of the Debentures, and may be in an amount which is no less than $10,000 but not necessarily as much as the Demand. However, a Demand may only be made in aggregate increments of $100,000, commencing 20 business days from the Closing Date of the purchase of the Debentures, as set forth in the Agreement, each Demand being no less than 20 business days from the last Demand, and provided that the closing bid price of PSI's common stock for the previous 5 consecutive trading days has nor fallen below $.05 per share. On any single trading day, Purchaser may sell in the aggregate common stock equal to the greater of (i) 10% of the total trading volume of PSI's common stock at any time during a day when PSI's common stock trades or (ii) 6,000 shares of common stock (either (i) or (ii) being "MAXIMUM SALES"). However, in the event that Purchaser does not accomplish Maximum Sales on any trading day, the difference between the Maximum Sales and the dollar amount of sales actually done shall cumulate ("CUMULATIVE SALES") and Purchaser may accomplish the Cumulative Sales on any other trading day even if the Maximum Sales have been done on such day. (b) if PSI fails to timely deliver Certificates, as provided in Section 5(a) above, then PSI shall pay Purchaser $150 per day for each day late in delivering Certificates up to and including the 10th late day, and $500 per day for each day late in delivering the Certificates after the 10th late day ("LIQUIDATED DAMAGES"). Any Liquidated Damages incurred by PSI shall be payable immediately and in cash upon demand in writing by Purchaser, or its agent, to PSI. However, such Liquidated Damages may be deducted from any amounts owed to PSI by Purchaser pursuant to this Section 5. Notwithstanding anything contained in the Agreement to the contrary, including but not limited to the provisions of Section 6 regarding the registration of restricted Conversion Shares, Purchaser shall be required to pay the Liquidated Damages set forth in this Section 5(b).

Conversion of Debentures. (a) As provided in paragraph 4 of the Debentures, Purchaser may give Notice of Conversion of the Debentures to PSI by facsimile to the number set forth in Section 10 below. Conversion of Debentures may take place at any time until the Maturity Date of the Debentures, as defined in the Debentures. As provided in paragraph 4 of the Debentures, within 10 business days of receipt of a Notice of Conversion, PSI The Company shall deliver to the Purchaser giving such notice, or to an account designated by such Purchaser in the Notice of Conversion, certificates representing the issue shares of common stock to which (the Purchaser shall be entitled by reason of the conversion ("CERTIFICATES"). Notwithstanding anything “Converted Shares”) to the contrary contained in paragraph 4 Holder pursuant to overdue monthly redemptions owed as of December 1, 2006, January 1, 2007 and February 1, 2007, to the Debentures, PSI may demandextent such Converted Shares are registered for resale pursuant to the Registration Statements. The Company shall issue 7,025,789 Converted Shares upon the monthly liquidation of, in writingthe aggregate, that the Purchaser pay outstanding $608,433.15 in principal amounts of the Debentures ("DEMAND") even though Purchasers have not convened all or any amount of the Debentures into shares of common stock, as provided in subsections (A) and (B) below. The Demand is a provision for payment of the Debenture only. Conversions of the Debentures into shares of common stock shall be done in accordance with paragraph 4 of the Debentures, and may be in an amount which is no less than $10,000 but not necessarily as much as the Demand. However, a Demand may only be made in aggregate increments of $100,000, commencing 20 business days from the Closing Date of the purchase of the Debentures, as set forth in on Exhibit A hereto. Within 3 Trading Days of the date hereof, the Company shall have delivered the Converted Shares to the Depository Trust Account of the Holder pursuant to the instructions set forth on the Holder’s signature page hereto. The Converted Shares shall be registered for resale pursuant to the Registration Statements and free of any legends or restrictions on resale by the Holder. The Holder waives any anti-dilution adjustments that would otherwise occur to securities held by Holder as a result of the issuance of the Converted Shares; provided, however, that such waiver does not extend to any adjustment to a third party holder of the Company’s securities that received an adjustment to their securities to less than $0.0866, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement, each Demand being no less than 20 business days from as a result of the last Demand, and provided issuance of the Converted Shares. The Company shall keep the Registration Statements effective until the earlier of the date that the closing bid price Holder no longer holds any Exercised Shares or Converted Shares or such shares may be sold pursuant to Rule 144(k). Upon the conversion of PSI's common stock for debentures, the previous 5 consecutive trading days has nor fallen below $.05 per share. On any single trading day, Purchaser may sell in the aggregate common stock equal to the greater of (i) 10% remaining principal amount due of the total trading volume of PSI's common stock at any time during a day when PSI's common stock trades or (ii) 6,000 shares of common stock (either (i) or (ii) being "MAXIMUM SALES"). However, in the event that Purchaser does not accomplish Maximum Sales on any trading day, the difference between the Maximum Sales and the dollar amount of sales actually done shall cumulate ("CUMULATIVE SALES") and Purchaser may accomplish the Cumulative Sales on any other trading day even if the Maximum Sales have been done on such day. (b) if PSI fails to timely deliver Certificates, Debentures is as provided in Section 5(a) above, then PSI shall pay Purchaser $150 per day for each day late in delivering Certificates up to and including the 10th late day, and $500 per day for each day late in delivering the Certificates after the 10th late day ("LIQUIDATED DAMAGES"). Any Liquidated Damages incurred by PSI shall be payable immediately and in cash upon demand in writing by Purchaser, or its agent, to PSI. However, such Liquidated Damages may be deducted from any amounts owed to PSI by Purchaser pursuant to this Section 5. Notwithstanding anything contained in the Agreement to the contrary, including but not limited to the provisions of Section 6 regarding the registration of restricted Conversion Shares, Purchaser shall be required to pay the Liquidated Damages set forth in this Section 5(b)on Exhibit A hereto.

Conversion of Debentures. (a) As provided in paragraph 4 of the Debentures, Purchaser may give Notice of Conversion of the Debentures to PSI by facsimile to the number set forth in Section 10 below. Conversion of Debentures may take place at any time until the Maturity Date of the Debentures, as defined in the Debentures. As provided in paragraph 4 of the Debentures, within 10 business days of receipt of a Notice of Conversion, PSI shall deliver to the Purchaser giving such notice, or to an account designated by such Purchaser in the Notice of Conversion, certificates representing the shares of common stock to which the Purchaser shall be entitled by reason of the conversion ("CERTIFICATES"). Notwithstanding anything to the contrary contained in paragraph 4 of the Debentures, PSI may demand, in writing, that the Purchaser pay outstanding principal amounts of the Debentures ("DEMAND") even though Purchasers have not convened all or any amount of the Debentures into shares of common stock, as provided in subsections (A) and (B) below. The Demand is a provision for payment of the Debenture only. Conversions of the Debentures into shares of common stock shall be done in accordance with paragraph 4 of the Debentures, and may be in an amount which is no less than $10,000 but not necessarily as much as the Demand. : However, a Demand may only be made in aggregate increments of $100,000, commencing 20 business days from the Closing Date of the purchase of the Debentures, as set forth in the Agreement, each Demand being no less than 20 business days from the last Demand, and provided that the closing bid price of PSI's common stock for the previous 5 consecutive trading days has nor fallen below $.05 per share. On any single trading day, Purchaser may sell in the aggregate common stock equal to the greater of (i) 10% of the total trading volume of PSI's common stock at any time during a day when PSI's common stock trades or (ii) 6,000 shares of common stock (either (i) or (ii) being "MAXIMUM SALES"). However, in the event that Purchaser does not accomplish Maximum Sales on any trading day, the difference between the Maximum Sales and the dollar amount of sales actually done shall cumulate ("CUMULATIVE SALES") and Purchaser may accomplish the Cumulative Sales on any other trading day even if the Maximum Sales have been done on such day. (b) if PSI fails to timely deliver Certificates, as provided in Section 5(a) above, then PSI shall pay Purchaser $150 per day for each day late in delivering Certificates up to and including the 10th late day, and $500 per day for each day late in delivering the Certificates after the 10th late day ("LIQUIDATED DAMAGES"). Any Liquidated Damages incurred by PSI shall be payable immediately and in cash upon demand in writing by Purchaser, or its agent, to PSI. However, such Liquidated Damages may be deducted from any amounts owed to PSI by Purchaser pursuant to this Section 5. Notwithstanding anything contained in the Agreement to the contrary, including but not limited to the provisions of Section 6 regarding the registration of restricted Conversion Shares, Purchaser shall be required to pay the Liquidated Damages set forth in this Section 5(b).