8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 22, 2006

friendlyway Corporation

(Exact name of Registrant as Specified in its Charter)

Nevada	0-20317	88-0270266
(State or Other Jurisdiction of Incorporation or Organization)	(Commission file number)	(I.R.S. Employer Identification Number)

7222 Commerce Center Drive, Suite 240

Colorado Springs, CO 80919

(Address of Principal Executive Offices including Zip Code)

(719) 359-5533

(Registrant's Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

SECTION 1 - REGISTRANT’S BUSINESS AND OPERATIONS

Item 1.01 Entry into a Material Definitive Agreement.

The descriptions of the agreements in Item 2.01 are incorporated herein by reference.

Item 2.01 Completion of Acquisition or Disposition of Assets.

On August 22 , 2006, our wholly owned subsidiary, Ignition Media Group, Inc, a Nevada Corporation, acquired substantially all of the assets of Ignition Media Group, LLC, a Pennsylvania limited liability company (“IMG”) pursuant to an Asset Purchase Agreement (the “Purchase Agreement”) effective August 22, 2006. In consideration for the Purchase Agreement, we shall pay to IMG One million Dollars (US 1,000,000.00) (the “Cash Consideration”) in cash and delivered 6,818,182 shares of our common stock, $.001 par value per share (the “Common Stock”). The Cash Consideration shall be paid to IMG in twelve (12) monthly installments; each such payment to be made on or before the fifteenth day of each calendar month. The first installment was made at Closing. The Cash Consideration may be prepaid in whole or in part, without penalty. The purchased assets consists of all of the assets used by IMG including but not limited to quotes, customer lists, accounts receivable, contracts, office furnishings, trademarks and other registered marks, all deposits including cash on hand, all intellectual property, domain names and rights owned by IMG against third parties.

Friendlyway delivered to IMG a certificate or certificates for Friendlyway common stock (the “Stock”) representing shares having an agreed aggregate value of One Million Five Hundred Thousand Dollars (US $1,500,000.00) (the “Stock Consideration”). The number of shares issued for the Stock Consideration was determined by dividing the foregoing agreed aggregate value by the average closing bid price for the ten days prior to closing. For purposes of this paragraph, “adjusted closing bid price” shall mean the closing bid price of the Stock on the Closing Date, as reflected on the Over-the-Counter Bulletin Board.

Also, on August 22 , 2006, our wholly owned subsidiary, Ignition Media Group, Inc, a Nevada Corporation, acquired substantially all of the assets of Captive Audience, LLC, a New Jersey limited liability company (“CA”) pursuant to an Asset Purchase Agreement (the “Purchase Agreement”) effective August 22, 2006. In consideration for the Purchase Agreement, we shall pay to CA One million Dollars (US 1,100,000.00) (the “Cash Consideration”) in cash and delivered 5,909,091 shares of our common stock, $.001 par value per share (the “Common Stock”). The Cash Consideration shall be paid to CA in twelve (12) monthly installments; each such payment to be made on or before the fifteenth day of each calendar month. The first installment was made at Closing. The Cash Consideration may be prepaid in whole or in part, without penalty. The purchased assets consists of all of the assets used by CA including but not limited to quotes, customer lists, accounts receivable, contracts, office furnishings, trademarks and other registered marks, all deposits including cash on hand, all intellectual property, domain names and rights owned by CA against third parties.

Friendlyway delivered to CA a certificate or certificates for Friendlyway common stock (the “Stock”) representing shares having an agreed aggregate value of One Million Three Hundred Thousand Dollars (US $1,300,000.00) (the “Stock Consideration”). The number of shares issued for the Stock Consideration was determined by dividing the foregoing agreed aggregate value by the average closing bid price for the ten days prior to closing. For purposes of this paragraph, “adjusted closing bid price” shall mean the closing bid price of the Stock on the Closing Date, as reflected on the Over-the-Counter Bulletin Board.

This above description of the Purchase and the transactions contemplated thereby is not a complete description of the terms of the Purchase Agreement or the transactions contemplated thereby and is qualified in its entirety by reference to the agreements entered into in connection with the transaction, copies of which are included as exhibits to this Current Report on Form 8-K.

SECTION 3 - SECURITIES AND TRADING MARKETS

Item 3.02. Unregistered Sales of Equity Securities.

In connection with the transactions described in Item 2.01, we issued shares of Common Stock described therein. The shares were issued in reliance on the exemption from registration provided by Section 4(2) of the Act, on the basis that its issuance did not involve a public offering, no underwriting fees or commissions were paid by us in connection with such sale, IMG and CA represented to us that is was an “accredited investor”, as defined in the Act.

[Missing Graphic Reference]

SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits.

Number	Documents
10.1	Asset Purchase Agreement: Ignition Media, LLC
10.2	Addendum to Asset Purchase Agreement: Ignition Media, LLC
10.3 20.1 20.2 20.3	Promissory Note between friendlway Corporation and Ignition Media, LLC Asset Purchase Agreement: Captive Audience, LLC Addendum to Asset Purchase Agreement: Captive Audience, LLC Promissory Note between friendlway Corporation and Captive Audience, LLC
99.1	Press Release, issued on August 23, 2006.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	Friendlyway Corporation
Date:  August 25, 2006	By:	/s/ Ken Upcraft
		Ken Upcraft
		Chief Executive Officer

EX-10.1

ASSET PURSCHASE AGREEMENT

AGREEMENT dated as of August 22, 2006, by and between friendlyway Inc., a Nevada based publicly traded company with offices at 1255 Battery St. Suite 200, San Francisco, CA 94111, hereinafter referred to as friendlyway and Ignition Media Group., Inc., a Nevada based wholly owned subsidiary of friendlyway, with offices at7222 Commerce Center Drive, Suite 240, Colorado Springs, CO 80919 hereinafter referred to as “IMG” and collectively with friendlyway referred to as “Buyer” and Ignition Media Group., LLC., with offices at1760 Market St., Philadelphia, PA 19103 hereinafter referred to as (“Seller”)

Background

Seller agrees, in principal, to sell to Buyer all of the assets of Seller set forth on Schedule A hereto (“Assets”).

Therefore, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows, Seller desires to sell the Assets to Buyer and Buyer desires to purchase the Assets from Seller on the terms and conditions set forth below.

1.Purchase and Sale.

(a) In consideration of Buyer’s payment of two million five hundred thousand dollars (US $2,500,000) (the “Purchase Price”), Seller hereby sells, assigns, transfers and delivers the Assets to Buyer. The Purchase Price shall be paid as follows: (i) cash in the amount of one million dollars ( US $1,000,000) to Seller, five hundred thousand dollars (US $500,000) of which shall be paid at the closing, and (ii) shares of friendlyway’s, common stock (having an agreed aggregate value of one million five hundred thousand dollars (US $1,500,000) (“Common Stock”). The number of shares to be issued shall be equal to dividing the agreed aggregate value above by the average closing bid price of the Buyer’s public stock during the ten days preceding closing.

(b)In connection with the sale of the Assets to Buyer, Seller shall execute and deliver to Buyer at Closing the bill of sale and the assignments of contracts and other assets attached hereto as Schedules A, B and C, respectively.

(c) Buyer shall pay Seller a non-refundable deposit of twenty-five thousand dollars (US $25,000) at the execution of this agreement which shall be credited to the cash paid at closing.

(d) Seller shall pay Buyer twenty percent (20%) of the gross revenue generated from the operations of IMG commencing on the closing and ending on December 31, 2006, hereinafter referred to as (“Revenue Payments”). The Revenue Payments shall automatically be paid to Seller as the revenue is collected by IMG on the first of each month.

(e)Seller shall pay Buyer an amount equal to five hundred thousand dollars (US $500,000) minus the amount of the Revenue Payments paid to Seller as defined in section 1(d) hereinafter referred to as (“Primary Payment”). The Primary Payment shall me made on the first of the month and paid in increments of one hundred and fifty thousand dollars ($150,000) commencing on January 1, 2007.

(d)On the one year anniversary of the closing of this Asset Purchase if the average closing bid price for the ten days preceding the anniversary date is lower than the average closing bid price defined in Par 1(a) above then the Seller will be entitle to an increase adjustment to the number of shares issued according to the following formula:

(1,000,000 / “x”) - (1,000,000 / “y”)

where

x: the average closing bid price for the ten days preceding the one year anniversary of the closing of this transaction

y: the average closing bid price for the ten days preceding the closing of this transaction

2.Liabilities. Buyer is not assuming any existing, contingent or future liability of Seller (the “Excluded Liabilities”). Without limitations, the Excluded Liabilities include:

(i)any liability for taxes of Seller;

(ii) any obligations of Seller in respect of the assets of Seller not included in the Assets acquired hereunder;

(iii)  any liability of Seller pursuant to any employee benefit plan; 

(iv) any liabilities or obligations of Seller to affiliates of Seller;

(v) all claims, liabilities, or obligations of Seller as an employer, including, without limitation, liabilities for wages, supplemental unemployment benefits, vacation benefits, severance benefits, retirement benefits, Federal Consolidated Omnibus Budget Reconciliation Act of 1985 benefits, Federal Family and Medical Leave Act of 1993 benefits, Federal Workers Adjustment and Retraining Notification Act obligations and liabilities, or any other employee benefits, withholding tax liabilities, workers’ compensation, or unemployment compensation benefits or premiums, hospitalization or medical claims, occupational disease or disability claims, or other claims attributable in whole or in part to employment or termination by Seller or arising out of any labor matter involving Seller as an employer, and any claims, liabilities and obligations arising from or relating to any employee benefit plans;

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(vi) all claims, liabilities, losses, damages, or expenses relating to any litigation, proceeding, or investigation of any nature arising out of the Business or ownership of the Assets on or prior to the Closing Date including, without limitation, any claims against or any liabilities for injury to, or death of, persons or damage to or destruction of property, any workers’ compensation claims, and any warranty claims;

(vii) except as may otherwise be provided herein, any accounts payable, other indebtedness, obligations or accrued liabilities of Seller; and

3. Remedies. In the event Buyer is unable to make Primary Payment to Seller, Seller shall be entitled to thirty percent of the gross revenue derived from the operation of IMG, hereinafter referred to as Secondary Payments. Secondary Payments shall me made to seller on the first of each month. Buyer shall no longer receive Secondary Payments when the sum of the Revenue Payments, Primary Payment, and Secondary Payments is equal to five hundred thousand dollars (US $500,000).

4.Representations and Warranties of Seller. Seller hereby represents and warrants to Buyer as follows:

(a)   As of the Closing, Seller is a limited liability company duly organized and validly existing under the laws of the State of Pennsylvania; Seller has full power and authority to execute and deliver this Agreement and all other agreements to be executed and delivered by Seller hereunder or in connection herewith (the “Ancillary Agreements”) and to consummate the transactions hereby or thereby contemplated; all necessary corporate action has been taken to authorize Seller to enter into this Agreement and the Ancillary Agreements;

(b)   This Agreement and the Ancillary Agreements have been duly executed and delivered by Seller and each such agreement constitutes the legal, valid and binding obligations of Seller enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or other laws for the protection of debtors;

(c)   Neither the execution, delivery or performance of this Agreement, the Ancillary Agreements, nor the transactions contemplated hereby or thereby will violate Seller’s operating agreement or any other agreements or instruments, law, regulation, judgment or order by which Seller is bound;

(d)   At the Closing, Seller will transfer to the Buyer good and valid title to all the Assets, free and clear of all liens, claims or other encumbrances.

(e)   Consents. No consent, authorization, approval, order, license, certificate or permit of or from, or declaration or filing with, any federal, state, local or other governmental authority or any court or other tribunal, and no consent or waiver of any party to any contract to which Seller is a party is required or declaration to or filing with any governmental or regulatory authority, or any other third party is required to: (i) execute this Agreement or any Ancillary Agreement, (ii) consummate this Agreement or any Ancillary Agreement and the transactions contemplated hereby or thereby, or (iii) permit Seller to assign or transfer the Assets (including without limitation, the Material Contracts) to Buyer.

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(f)   Litigation. There are no actions, suits, proceedings, orders or claims pending or threatened against Seller, or pending or threatened by Seller against any third party, at law or in equity, or before or by any governmental department, commission, board, bureau, agency or instrumentality which relate to, or in any way affect, the Business or the Assets (including, without limitation, any actions, suits, proceedings or investigations with respect to the transactions contemplated by this Agreement or any Ancillary Agreement). Seller is not subject to any judgment, order or decree of any court or other governmental agency, and Seller has received no written opinion or memorandum from legal counsel to the effect that it is exposed, from a legal standpoint, to any liability which relates to the Business or the Assets.

(g)   Intellectual Property. The Seller does not use any third party patent, trademark, copyright, trade secrets or other intellectual or industrial property rights, other than non-exclusively licensed use of commercially available software, in the Business.

(h)   Material Contracts. Each Material Contract is valid and binding on and enforceable against Seller and, to the knowledge of Seller, each other party thereto and is in full force and effect. Seller is not in breach or default under any Material Contract. Seller does not know of, and has not received notice of, any violation or default under (nor, to the knowledge of Seller, does there exist any condition which with the passage of time or the giving of notice or both would result in such a violation or default under) any Material Contract by any other party thereto. Prior to the date hereof, Seller has made available to Buyer true and complete copies of all Material Contracts.

5.Representations and Warranties of Buyer. Buyer represents and warrants to Seller as follows:

(a)   Buyer is a corporation duly organized and validly existing under the laws of the State of Nevada; Buyer has full power and authority to execute and deliver this Agreement and all other agreements to be executed and delivered by Buyer hereunder or in connection herewith the “Ancillary Agreements” and to consummate the transactions hereby or thereby contemplated; all necessary corporate action has been taken to authorize Buyer to enter into this Agreement and the Ancillary Agreements;

(b)   This Agreement and the Ancillary Agreements have been duly executed and delivered by Buyer and each such agreement constitutes the legal, valid and binding obligations of Buyer enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or other laws for the protection of debtors;

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(c)   Neither the execution, delivery or performance of this Agreement, the Ancillary Agreements, nor the transactions contemplated hereby or thereby will violate Buyer’s Articles of Incorporation or by-laws or any other agreements or instruments, law, regulation, judgment or order by which Buyer is bound;

6. Closing. Provided that all consents set forth in Section 3 have been obtained or waived by the Buyer, the closing of the transactions contemplated hereby (the “Closing”) shall occur on or before July 31, 2006 at 3:00 PM. If closing does not occur by the time and date noted above, friendlyway shall pay the Seller an additional $50,000 in full satisfaction of any damages realized or not realized by the failure for the Buyer to close. Unless both parties agree in writing, this agreement shall not survive past July 31, 2006 and shall become null and void without recourse (except as noted herein). If the parties agree to extend the closing date, then all funds advanced to the Seller shall be credited to the cash component of the purchase.

7. Accounts Payable and Accounts Receivable. (a) It is the intention of the parties that all rights to and the benefit of the accounts receivable from the Business shall be included in the Assets transferred by Seller to Buyer. Accordingly, all accounts receivable outstanding on the Closing Date shall be collected by Buyer. At Closing, Seller shall deliver to Buyer a complete statement of each account receivable as of the Closing Date. Seller agrees to cooperate with Buyer to effect the purpose and intent of this Section 6, including, but not limited to, immediately turning over to Buyer any and all such accounts receivable which are received or collected by Seller.

8. Indemnification by Seller. Seller agrees to indemnify, defend and hold Buyer and its affiliates harmless from and against any and all losses, liabilities, obligations, suits, proceedings, demands, judgments, damages, claims, expenses and costs, including, without limitation, reasonable fees, expenses and disbursements of counsel (collectively, “Damages”), which any of them may suffer, incur or pay in connection with (i) any breach of a representation or warranty made by Seller, (ii) any liability accruing prior to the Closing Date incurred in connection with the Business or Assets other than those constituting Assumed Liabilities, (iii) the non-fulfillment by Seller of any covenant contained herein or in the Ancillary Agreements or (iv) any Excluded Liabilities.

9.Indemnification by Buyer. Buyer agrees to indemnify defend and hold Seller and its affiliates harmless from and against any and all Damages which any of them may suffer, incur or pay in connection with (i) any breach of a representation or warranty made by Buyer herein, (ii) any liability arising under or in connection with the use and/or ownership of the Assets arising on or after the Closing Date, (iii) the non-fulfillment by Buyer of any covenant contained herein or in the Ancillary Agreements or (iv) any Assumed Liabilities.

10. Survival. The representations, warranties, indemnification, covenants and agreements of Seller and Buyer contained in this Agreement shall survive the execution and delivery hereof for a period of three years.

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11. Severability. If any provision of this Agreement is determined to be invalid, illegal or incapable of being enforced by reason of any rule of law or public policy, all other provisions of this agreement shall remain in full force and effect.

12. No Waiver. No waiver by any party of any breach or nonperformance of any provision or obligation of this Agreement shall be deemed to be a waiver of any preceding or succeeding breach of the same or any provision of this agreement.

13. Entire Agreement. This Agreement is the entire agreement of the parties with respect to the subject matter hereof, supersedes all prior agreements and understandings, oral and/or written, relating to the subject matter hereof, and may not be amended, supplemented, or modified, except by written instrument executed by all parties hereto. This Agreement shall be binding upon and inure to the benefit of the parties hereto, their successors and permitted assigns. Where the context so requires, the singular shall include the plural and vice versa.

14. Execution in Counterparts. This Agreement may be executed in one or more counterparts, each of which shall constitute an original and all of which shall constitute one and the same document.

15. Governing Law; Counsel. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada, without giving effect to conflict of laws principles. The parties acknowledge that they have each had an opportunity to be represented by legal counsel of their choice and that they enter into this Agreement and the transactions contemplated hereby freely and voluntarily with full knowledge and understanding of its contents.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

Ignition Media Group, LLC	Friendlyway Corporation
By: /s/ Thaddeus Bartkowski	By: /s/ Ken Upcraft
Name:Tahddeus Bartkowski	Name: Kenneth Upcraft
Title:	Title: Chief Executive Officer
	Ignition Media Group, Inc
	By: /s/ Thaddeus Bartkowski
	Name: Thaddeus Bartkowski
	Title: President

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SCHEDULE A

ASSETS TO BE TRANSFERRED

The following should be attached:

1.   Ignition Media Group Agreements with Save Mart, Ingles, and Brookshire Grocery Company.

2.   The spreadsheet which list’s the hardware that is installed in each Supermarket and the corresponding address location

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SCHEDULE B

ASSUMED LIABILITIES

The following should be attached:

Attach loan documents relating to Existing Equipment currently installed in the Supermarkets

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SCHEDULE C

ASSIGNMENT AND ASSUMPTION AGREEMENT

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”)is made and entered into this August 22, 2006 by and among Ignition Media Group, LLC, a Pennsylvania limited liability company (“Assignor”) and Ignition Media Group, Inc, a Nevada based corporation (“Assignee”). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Purchase Agreement (as hereinafter defined).

WHEREAS, Assignor and Assignee entered into that certain Asset Purchase Agreement dated as of August 22, 2006 (the “Purchase Agreement”), the terms of which are incorporated herein by reference, which provides, among other things, for the sale by Assignor to Assignee of certain assets, property and rights, tangible and intangible, of Assignor used or useful in the Business (as defined in the Purchase Agreement); and

WHEREAS, pursuant to the Purchase Agreement, Assignor desires to transfer to Assignee, and Assignee desires to assume, all of Assignor’s right, title and interest in and to all Material Contracts (collectively, the “Assumed Contracts”).

NOW, THEREFORE, in considerationof the mutual promises contained in the Purchase Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Assignor, and subject to the terms and conditions of the Purchase Agreement:

1.Assignment and Assumption. Assignor hereby assigns, transfers and conveys to Assignee all of Assignor’s right, title and interest in and to the Assumed Material Contracts the Assumed Contracts, and Assignee hereby assumes and agrees to perform any and all obligations and liabilities of Assignor under the Assumed Contracts arising after the Closing (as defined in the Purchase Agreement). Without limiting the foregoing, Assignor shall remain liable for all Excluded Liabilities (as defined in the Purchase Agreement), and all obligations and liabilities under the Assumed Contracts which arose or are incurred prior to Closing.

2.Successors. All of the covenants, terms and conditions set forth herein shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective heirs, successors and assigns.

3.Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada, without giving effect to conflict of laws principles. The parties hereby consent to the jurisdiction of the courts of the State of Nevada and shall be subject to service of process in the State of Nevada with respect to any disputes arising, directly or indirectly, out of this Agreement.

4.Counterparts. This Agreement may be executed in one or more counterparts, all of which together shall for all purposes constitute one and the same instrument.

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5.Further Assurances. From time to time after the date hereof, without further consideration, Assignor shall execute and deliver such other instruments of assignment, transfer and conveyance and shall take such other action as Assignee may reasonably request to more effectively assign, transfer and convey to Assignee, all of Assignor’s right, title and interest in and to any of the Assumed Contracts, or to enable it to exercise and enjoy all rights and benefits of Assignor with respect thereto.

[remainder of page left intentionally blank; signature page follows]

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WITNESS WHEREOF, and intending to be legally bound hereby, each of Assignor and Assignee has caused this Agreement to be executed and delivered by its duly authorized representative as of the day and year first above written.

ASSIGNOR	ASSIGNEE
Ignition Media Group, LLC	Friendlyway Corporation
By: /s/ Thaddeus Bartkowski	By: /s/ Ken Upcraft
Name: Tahddeus Bartkowski	Name: Kenneth Upcraft
Title:	Title: Chief Executive Officer
	Ignition Media Group, Inc
	By: /s/ Thaddeus Bartkowski
	Name: Thaddeus Bartkowski
	Title: President

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EX-10.2

ADDENDUM TO AGREEMENT

This Addendum is made and entered into this 1^st day of August, 2006, by and between Pantel Systems Inc., a.k.a friendlyway Inc., a Nevada based publicly traded company with offices at 7222 Commerce Center Drive, Suite 240, Colorado Springs, CO 80919, hereinafter referred to as (“PSI”), and Ignition Media Group., Inc., a Nevada based wholly owned subsidiary of PSI , with offices at 7222 Commerce Center Drive, Suite 240, Colorado Springs, CO 80919, hereinafter referred to as (“IMG”) and collectively with PSI referred to as (“Buyer”) and Ignition Media Group., LLC., with offices at 307 Clairemont Rd. Villanova PA 19085 hereinafter referred to as (“Seller”). The parties having executed an Asset Purchase Agreement on May 18, 2006, hereinafter referred to as (“APA”) having verbally agreed to amend, extend, and supplement the APA on July 28, 2006 enter into this written Addendum to amend, extend, and supplement the APA which, in the event of inconsistency with the APA this Addendum will control, as follows:

l. References: Buyer and Seller incorporate any and all references to the APA as if stated herein at length.

2. Pursuant to Section 6. of the APA, Closing: The closing of the transactions contemplated hereby (the “Closing”) shall occur on August 15, 2006. The fifty thousand dollar ($50,000) payment shall be paid to Seller by Buyer on or before August 3, 2006 and shall be credited to the Purchase Price as defined in Section 3.

3. Pursuant to Section 1. of the APA, Purchase and Sale:

(a) In consideration of Buyer’s payment of two million five hundred thousand dollars (US $2,500,000) (the “Purchase Price”), Seller hereby sells, assigns, transfers and delivers the Assets to Buyer. The Purchase Price shall be paid as follows: (i) cash in the amount of one million dollars (US $1,000,000) which shall be paid by Buyer to Seller, which shall be documented in the form of a Promissory Note which Buyer and Seller shall execute at Closing consistent with the following structure:

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Buyer shall make the following payments on the following dates to Seller, timeliness of the essence:

Payment Due Date from Buyer to Seller	Installment Payment of Purchase Price (USD)
August 15, 2006	75,000.00
September 15, 2006	75,000.00
October 15, 2006	75,000.00
November 15, 2006	90,000.00
December 15, 2006	90,000.00
January 15, 2007	90,000.00
February 15, 2007	90,000.00
March 15, 2007	90,000.00
April 15, 2007	90,000.00
May 15, 2007	90,000.00
June 15, 2007	35,000.00
July 15, 2007	35,000.00

and (ii) shares of PSI’s common stock having an agreed aggregate value of one million five hundred thousand dollars (US $1,500,000) hereinafter referred to as (“Common Stock”). The number of shares to be issued shall be equal to dividing one million five hundred thousand dollars (US $1,500,000) by the average closing bid price of the Buyer’s public stock during the ten days preceding Closing.

4. In Addition to andPursuant to Section 3. of the APA, Remedies:

(b) In the event Buyer defaults in making any Installment Payments of the Purchase Price to Seller on the due date as outlined in the APA and this Addendum Buyer shall be in default of the APA. Upon receipt of written notice from Seller, Buyer shall have fifteen days (15) to remedy the default by providing Seller with that installment payment that is past due. In the event Buyer does not remedy such default within the fifteen day (15) period, Seller at Seller’s sole discretion may provide written notification, hereinafter referred to as (“Re-Assignment Notification”) to Buyer requiring Buyer to assign ownership of the Agreements Buyer has with Brookshire Grocery Company Inc., Ingles Markets Inc., and Save Mart Supermarkets Inc. hereinafter collectively referred to as (“Retail Agreements”), in addition to any digital signage equipment owned by Buyer that is installed in any retail locations which are owned, operated, or managed by Brookshire Grocery Company Inc., Ingles Markets Inc., and or Save Mart Supermarkets Inc., hereinafter collectively referred to as (“Retail Partners”). Upon receipt of Re-Assignment Notification Buyer shall immediately thereupon assign clear title to the Retail Agreements, additionally Seller shall be responsible for any outstanding lease payments held by Buyer related to any digital signage equipment installed in retail locations owned, operated, or managed by the Retail Partners. In the event Buyer has fulfilled lease payments for digital signage Equipment installed in retail locations owned, operated, or managed by the Retail Partners, wherein the value of the lease payments that Buyer has made plus the amount of the Promissory Note which Buyer has paid to Seller exceeds the total value of the Promissory Note hereinafter referred to as (“Excess Lease Value”), Seller shall be obligated to repay Buyer the Excess Lease Value. In the event Buyer has purchased digital signage equipment installed in retail locations owned, operated, or managed by the Retail Partners, wherein the purchase price of the digital signage equipment plus the amount of the Promissory Note which Buyer has paid to Seller exceeds the total value of the Promissory Note, hereinafter referred to as (“Excess Purchase Value”), Seller shall be obligated to repay Buyer the Excess Purchase Value. The rate at which Seller shall pay Buyer both Excess Purchase Value and Excess Lease Value shall be calculated by adding the Excess Lease Value and the Excess Purchase Value, dividing it by the number of locations owned, operated, or managed by the Retail Partners wherein digital signage Equipment is installed and dividing it by twenty-four equal payments (24) to be paid by Seller to Buyer on the first of each month commencing thirty days (30) after the date of default. In exercising the aforementioned remedies, the Seller in no way becomes obligated to refund any part of the Purchase Price which has been previously been paid.

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5. Deployment: Consistent with the Sellers representations made to the Retail Partners at the request of Buyer, Buyer agrees to procure the necessary Equipment to deploy the following locations in the time period specified below:

Deployment, Number of locations, by Retail Partner
	Brookshire Grocery Company Inc.	Ingles Markets Inc.	Save Mart Supermarkets Inc.
September 1, 2006	30	20	25
October 1, 2006	50		25
November 1, 2006	78		12
December 1, 2006		40
January 1, 2007		40
February 1, 2007		40
March 1, 2007		40

IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be executed by their respective duly authorized officers or representatives as of the last date set forth below.

Ignition Media Group, LLC	Pantel Systems, Inc
By:/s/ Thaddeus Bartkowski	By: /s/ Ken Upcraft
Name: Thaddeus Bartkowski	Name: Ken Upcraft
Title: PresidentTitle: Chief Executive Officer
	Ignition Media Group, Inc
	By: /s/ Thaddeus Bartkowski
	Name: Thaddeus Bartkowski
	Title: President

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EX-10.3

COMMERCIAL PROMISSORY NOTE

August 22, 2006    $925,000.00

Friendlyway Corporation, a Nevada corporation with offices at 7222 Commerce Center Drive, Suite 240, Colorado Springs, CO. 80919 (hereinafter referred to as “Maker”), promises to pay to the order of Ignition Media Group, LLC (“Lender”) the principal sum of Nine Hundred Twenty Five Thousand and no/100 Dollars ($925,000.00) in accordance with the terms of this Note.

Principal under this Note shall be payable in monthly installments pursuant to the attached schedule. Each payment shall be due on or before 5:00 p.m. on the date indicated for each payment. The entire balance of unpaid principal shall be due and payable July 15, 2007 (the “Maturity Date”).

Principal on this Note may be prepaid at any time, in whole or in part, without penalty.

All payments shall be made at the Lender’s offices at 307 Clairemont Road, Villanova, PA 19085, or at such other place as may be designated in writing by the holder of this Note. All payments shall be made in legal tender of the United States of America.

The holder of this Note may declare a default hereunder in the event (a) that any payment required by this Note is not made at the time the same shall become due and payable, or (b) of the dissolution, termination of existence, merger, consolidation, insolvency, business failure, appointment of a receiver of any part of the property of, assignment for the benefit of creditors by, or the commencement of any proceedings under any bankruptcy or insolvency laws by or against, Maker. Upon the declaration of a default hereunder, and at the option of the holder, (x) the unpaid principal balance of this Note shall be accelerated and become immediately due and payable, and (y) the holder shall be entitled to request the appointment of a receiver for all or any part of the property of Maker. Maker hereby consents to the appointment of a receiver in such event.

Maker waives presentment, notice of dishonor and protest, and agrees that any extension of time with respect to any payment due under this Note, or the addition or release of any party or guarantor shall not affect the Maker's liability. No waiver by the holder of this Note of any payment or right under this Note shall operate as a waiver of any other payment or right under this Note. Maker will pay all costs and expenses, including reasonable attorneys' fees, paid or incurred by the holder to enforce this Note.

This Note is made for business purposes only, and not for personal, family or household purposes.

Friendlyway Corporation 

By:  /s/ Ken Upcraft                  

Kenneth J. Upcraft, President  

Promissory Note to Ignition Media Group, LLC

Principal Payment Schedule

Payment Due Date	Principal Payment
August 22, 2006	75,000.00
September 15, 2006	75,000.00
October 15, 2006	75,000.00
November 15, 2006	90,000.00
December 15, 2006	90,000.00
January 15, 2007	90,000.00
February 15, 2007	90,000.00
March 15, 2007	90,000.00
April 15, 2007	90,000.00
May 15, 2007	90,000.00
June 15, 2007	35,000.00
July 15, 2007	35,000.00

2

EX-20.1

ASSET PURSCHASE AGREEMENT

AGREEMENT dated as of August 22,, 2006, by and between friendlyway Inc., a Nevada based publicly traded company with offices at 1255 Battery St. Suite 200, San Francisco, CA 94111, hereinafter referred to as “friendlyway” and Ignition Media Group., Inc.., a wholly owned subsidiary of friendlyway Inc, with offices at7222 Commerce Center Drive, Suite 240, Colorado Springs, CO 80919 hereinafter referred to as “IMG” and collectively with friendlyway referred to as “Buyer”, and Captive Audience, LLC, a limited liability company, hereinafter referred to as (“Seller”) with offices at 1 Industrial Drive, Vernon, NJ 07462.

Background

Seller agrees, in principal, to sell to Buyer all of the assets of Seller set forth on Schedule A hereto (“Assets”).

Therefore, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows, Seller desires to sell the Assets to Buyer and Buyer desires to purchase the Assets from Seller on the terms and conditions set forth below.

1.Purchase and Sale. (a) In consideration of Buyer’s payment of two million four hundred thousand dollars (US $2,400,000) (the “Purchase Price”), Seller hereby sells, assigns, transfers and delivers the Assets to Buyer. The Purchase Price shall be paid at the Closing as follows: (i) cash in the amount of one million one hundred thousand dollars ($1,100,000) to Seller and (ii) shares of friendlyway’s, common stock (having an agreed aggregate value of One Million three hundred thousand dollars (US $1,300,000) hereinafter referred to as, “Common Stock”. The number of shares to be issued shall be equal to dividing the agreed aggregate value above by the average closing bid price of the Buyer’s public stock during the ten days preceding closing.

(b)In connection with the sale of the Assets to Buyer, Seller shall execute and deliver to Buyer at Closing the bill of sale and the assignments of contracts and other assets attached hereto as Exhibits A, B, C, and D respectively.

(c) Buyer shall pay Seller a deposit of $25,000 at the execution of this agreement which shall be credited to the cash paid at closing.

(d) friendlyway, at Seller’s written request, shall repurchase a specific number of shares of Common Stock from Seller. If Seller elects to request friendlyway to repurchase the shares of Common Stock pursuant to Par 1(a) then Seller must notify friendlyway by mail on or before November 1, 2006, of its desire to have the shares repurchased and the amount of shares of Common Stock it desires to have repurchased. Seller may request friendlyway to repurchase an amount of shares of Common Stock which have a value not to exceed $700,000 based upon the per share value of the Common Stock on the Closing, hereinafter defined. Friendlyway shall repurchase any shares of Common Stock at this time for a 28.5% discount of the value as measured at the Closing. The payments due Seller from friendlyway for the repurchase of the Common Stock shall be made in monthly increments of $100,000 USD due and owing Seller on a monthly basis commencing on December 31, 2006 until the complete payment of the repurchase has been made.

(e) If by August 1, 2007 the average closing bid price of the public stock of friendlyway for the ten days proceeding August 1, 2007 is lower then the average closing bid price defined in Par 1(a) above then the Seller will be entitled to a per share cash payment, hereinafter to as “Cash Payment”, according to the following formula:

(A x .715) = C

(C- B) = Cash Payment

wherein:

A: the average closing per share bid price for the ten days preceding the closing of this transaction.

B: the average closing per share bid price for the ten days preceding the one year anniversary of the closing of this transaction

The Cash Payment shall be made by friendlyway on or before November 30, 2007.

2. Notice.

(a) Buyer acknowledges that Seller has entered into an agreement with a third party hereinafter referred to as (“The Third Party”) which allows The Third Party the right to purchase certain assets of Seller, and requires Seller to notify The Third Party of the existence of this Asset Purchase Agreement. Seller shall only notify The Third Party of the existence of this Asset Purchase Agreement but shall not disclose the financial terms of this Agreement. Seller shall provide Buyer with written notification on or before June 2, 2006 of Seller’s ability to contractually complete this transaction with Buyer as it pertains to its contractual obligations to The Third Party, hereinafter referred to as (“Notification”) attached as Schedule D. In the event Seller does not provide Buyer with Notification on or before June 2, 2006 then Seller shall be bound to the terms of this Agreement.

(b) In the event Seller is contractually unable to complete this transaction with Buyer as it pertains to Notification in section 2(a) then Seller shall immediately refund Buyer’s twenty- five thousand dollars (US $25,000) and both Buyer and Seller shall be released from this Agreement.

(c) In the event Seller is contractually able to complete this transaction with Buyer as it pertains to Notification in section 2(a) then Buyer shall remit an additional twenty- five thousand dollars (US $25,000) to seller which shall be credited to the Closing.

3.Liabilities. Buyer is not assuming any existing, contingent or future liability of Seller (the “Excluded Liabilities”). Without limitations, the Excluded Liabilities include:

(i)any liability for taxes of Seller;

(ii) any obligations of Seller in respect of the assets of Seller not included in the Assets acquired hereunder;

(iii)any liability of Seller pursuant to any employee benefit plan;

(iv) any liabilities or obligations of Seller for borrowed money or interest on borrowed money;

(v) any liabilities or obligations of Seller to affiliates of Seller;

(vi) all claims, liabilities, or obligations of Seller as an employer, including, without limitation, liabilities for wages, supplemental unemployment benefits, vacation benefits, severance benefits, retirement benefits, Federal Consolidated Omnibus Budget Reconciliation Act of 1985 benefits, Federal Family and Medical Leave Act of 1993 benefits, Federal Workers Adjustment and Retraining Notification Act obligations and liabilities, or any other employee benefits, withholding tax liabilities, workers’ compensation, or unemployment compensation benefits or premiums, hospitalization or medical claims, occupational disease or disability claims, or other claims attributable in whole or in part to employment or termination by Seller or arising out of any labor matter involving Seller as an employer, and any claims, liabilities and obligations arising from or relating to any employee benefit plans;

(vii) all claims, liabilities, losses, damages, or expenses relating to any litigation, proceeding, or investigation of any nature arising out of the Business or ownership of the Assets on or prior to the Closing Date including, without limitation, any claims against or any liabilities for injury to, or death of, persons or damage to or destruction of property, any workers’ compensation claims, and any warranty claims;

(viii) except as may otherwise be provided herein, any accounts payable, other indebtedness, obligations or accrued liabilities of Seller; and

(ix) any contracts, agreements, leases, licenses or other commitments of Seller not expressly assumed hereunder by Buyer.

4.Representations and Warranties of Seller. Seller hereby represents and warrants to Buyer as follows:

(a)   As of the Closing, Seller is a limited liability company duly organized and validly existing under the laws of the State of Nevada; Seller has full power and authority to execute and deliver this Agreement and all other agreements to be executed and delivered by Seller hereunder or in connection herewith (the “Ancillary Agreements”) and to consummate the transactions hereby or thereby contemplated; all necessary corporate action has been taken to authorize Seller to enter into this Agreement and the Ancillary Agreements;

(b)   This Agreement and the Ancillary Agreements have been duly executed and delivered by Seller and each such agreement constitutes the legal, valid and binding obligations of Seller enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or other laws for the protection of debtors;

(c)   Neither the execution, delivery or performance of this Agreement, the Ancillary Agreements, nor the transactions contemplated hereby or thereby will violate Seller’s operating agreement or any other agreements or instruments, law, regulation, judgment or order by which Seller is bound;

(d)   At the Closing, Seller will transfer to the Buyer good and valid title to all the Assets, free and clear of all liens, claims or other encumbrances.

(e)   Consents. No consent, authorization, approval, order, license, certificate or permit of or from, or declaration or filing with, any federal, state, local or other governmental authority or any court or other tribunal, and no consent or waiver of any party to any contract to which Seller is a party is required or declaration to or filing with any governmental or regulatory authority, or any other third party is required to: (i) execute this Agreement or any Ancillary Agreement, (ii) consummate this Agreement or any Ancillary Agreement and the transactions contemplated hereby or thereby, or (iii) permit Seller to assign or transfer the Assets (including without limitation, the Material Contracts) to Buyer.

(f)   Litigation. There are no actions, suits, proceedings, orders or claims pending or threatened against Seller, or pending or threatened by Seller against any third party, at law or in equity, or before or by any governmental department, commission, board, bureau, agency or instrumentality which relate to, or in any way affect, the Business or the Assets (including, without limitation, any actions, suits, proceedings or investigations with respect to the transactions contemplated by this Agreement or any Ancillary Agreement). Seller is not subject to any judgment, order or decree of any court or other governmental agency, and Seller has received no written opinion or memorandum from legal counsel to the effect that it is exposed, from a legal standpoint, to any liability which relates to the Business or the Assets.

(g)   Intellectual Property. The Seller does not use any third party patent, trademark, copyright, trade secrets or other intellectual or industrial property rights, other than non-exclusively licensed use of commercially available software, in the Business.

(h)   Material Contracts. Each Material Contract is valid and binding on and enforceable against Seller and, to the knowledge of Seller, each other party thereto and is in full force and effect. Seller is not in breach or default under any Material Contract. Seller does not know of, and has not received notice of, any violation or default under (nor, to the knowledge of Seller, does there exist any condition which with the passage of time or the giving of notice or both would result in such a violation or default under) any Material Contract by any other party thereto. Prior to the date hereof, Seller has made available to Buyer true and complete copies of all Material Contracts.

5.Representations and Warranties of Buyer. Buyer represents and warrants to Seller as follows:

(a)   Buyer is a corporation duly organized and validly existing under the laws of the State of Nevada; Buyer has full power and authority to execute and deliver this Agreement and all other agreements to be executed and delivered by Buyer hereunder or in connection herewith the “Ancillary Agreements” and to consummate the transactions hereby or thereby contemplated; all necessary corporate action has been taken to authorize Buyer to enter into this Agreement and the Ancillary Agreements;

(b)   This Agreement and the Ancillary Agreements have been duly executed and delivered by Buyer and each such agreement constitutes the legal, valid and binding obligations of Buyer enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or other laws for the protection of debtors;

(c)   Neither the execution, delivery or performance of this Agreement, the Ancillary Agreements, nor the transactions contemplated hereby or thereby will violate Buyer’s Articles of Incorporation or by-laws or any other agreements or instruments, law, regulation, judgment or order by which Buyer is bound;

6. Closing. Provided that all consents set forth in Section 3 have been obtained or waived by the Buyer, the closing of the transactions contemplated hereby (the “Closing”) shall occur on or before July 31, 2006 at 3:00 PM. If closing does not occur by the time and date noted above, friendlyway shall pay the Seller an additional $50,000 in full satisfaction of any damages realized or not realized by the failure for the Buyer to close. Unless both parties agree in writing, this agreement shall not survive past July 31, 2006 and shall become null and void without recourse (except as noted herein). If the parties agree to extend the closing date, then all funds advanced to the Seller shall be credited to the cash component of the purchase.

7. Deferred Revenue and Accounts Receivable. Seller shall retain an amount of revenue which Seller has invoiced yet has not provided services for, hereinafter referred to as (“Deferred Revenue”). Seller shall be entitled to retain an amount of Deferred Revenue up to four hundred thousand dollars (US $400,000) as of the closing which shall not represent more than fifteen hundred minutes (1500 min) of inventory, hereinafter referred to as the (“Deferred Revenue Limit”). Buyer shall be entitled to collect from Seller an amount of Deferred Revenue greater than four hundred thousand dollars (US $400,000). The Deferred Revenue Limit shall be calculated by subtracting the applicable collectable accounts receivable which the Seller has not collected as of the Closing from the Deferred Revenue. All accounts receivable outstanding on the Closing Date in excess of the Deferred Revenue Limit shall be collected by Buyer. At Closing, Seller shall deliver to Buyer a complete statement of each account receivable as of the Closing Date. Seller agrees to cooperate with Buyer to effect the purpose and intent of this Section 6, including, but not limited to, immediately turning over to Buyer any and all such accounts receivable which are received or collected by Seller in excess of the Deferred Revenue Limit after the closing.

8. Indemnification by Seller. Seller agrees to indemnify, defend and hold Buyer and its affiliates harmless from and against any and all losses, liabilities, obligations, suits, proceedings, demands, judgments, damages, claims, expenses and costs, including, without limitation, reasonable fees, expenses and disbursements of counsel (collectively, “Damages”), which any of them may suffer, incur or pay in connection with (i) any breach of a representation or warranty made by Seller, (ii) any liability accruing prior to the Closing Date incurred in connection with the Business or Assets other than those constituting Assumed Liabilities, (iii) the non-fulfillment by Seller of any covenant contained herein or in the Ancillary Agreements or (iv) any Excluded Liabilities.

9.Indemnification by Buyer. Buyer agrees to indemnify defend and hold Seller and its affiliates harmless from and against any and all Damages which any of them may suffer, incur or pay in connection with (i) any breach of a representation or warranty made by Buyer herein, (ii) any liability arising under or in connection with the use and/or ownership of the Assets arising on or after the Closing Date, (iii) the non-fulfillment by Buyer of any covenant contained herein or in the Ancillary Agreements or (iv) any Assumed Liabilities.

10. Taxes and Other Fees. Seller shall pay any and all sales taxes or other taxes or recording fees payable as a result of the sale of the Assets hereunder.

11. Survival. The representations, warranties, indemnification, covenants and agreements of Seller and Buyer contained in this Agreement shall survive the execution and delivery hereof for a period of three years.

12. Severability. If any provision of this Agreement is determined to be invalid, illegal or incapable of being enforced by reason of any rule of law or public policy, all other provisions of this agreement shall remain in full force and effect.

13. No Waiver. No waiver by any party of any breach or nonperformance of any provision or obligation of this Agreement shall be deemed to be a waiver of any preceding or succeeding breach of the same or any provision of this agreement.

14. Entire Agreement. This Agreement is the entire agreement of the parties with respect to the subject matter hereof, supersedes all prior agreements and understandings, oral and/or written, relating to the subject matter hereof, and may not be amended, supplemented, or modified, except by written instrument executed by all parties hereto. This Agreement shall be binding upon and inure to the benefit of the parties hereto, their successors and permitted assigns. Where the context so requires, the singular shall include the plural and vice versa.

15. Execution in Counterparts. This Agreement may be executed in one or more counterparts, each of which shall constitute an original and all of which shall constitute one and the same document.

16. Governing Law; Counsel. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada, without giving effect to conflict of laws principles. The parties acknowledge that they have each had an opportunity to be represented by legal counsel of their choice and that they enter into this Agreement and the transactions contemplated hereby freely and voluntarily with full knowledge and understanding of its contents.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

friendlyway Corporation

By: /s/ Ken Upcraft

Name: Ken Upcraft

Title: Chief Executive Officer

Ignition Media Group, Inc

By:/s/ Thaddeus Bartkowski

Name: Thaddeus Bartkowski

Title: President

Captive Audience, LLC

By:/s/ Paul Wiebel

Name: Paul Wiebel

Title: Chairman

SCHEDULE A

ASSETS TO BE TRANSFERRED

The following should be attached:

1.   Captive Audience Agreements with Javit’s Center, SeaStreak, Wakefern, Big Y, and Foodtown. The Agreements should include any documentation from the retailer agreeing to the assignment

2.   The spreadsheet which lists the hardware that is installed in each Supermarket and the corresponding address location

3.   The contracts with advertisers that require continued servicing beyond the close date

4.   The list of all advertisers that have utilized the Supermarket network since inception including contact information

5.   The necessary passwords to operate the digital signage network through the Broadsign platform

SCHEDULE B

ASSUMED LIABILITIES

There are no assumed liabilities by Buyer.

SCHEDULE C

ASSIGNMENT AND ASSUMPTION AGREEMENT

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”)is made and entered into this August 22, 2006 by and among Captive Audience, LLC, a New Jersey limited liability company (“Assignor”) and Ignition Media Group, Inc, a Nevada corporation (“Assignee”). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Purchase Agreement (as hereinafter defined).

WHEREAS, Assignor and Assignee entered into that certain Asset Purchase Agreement dated as of August 22, 2006 (the “Purchase Agreement”), the terms of which are incorporated herein by reference, which provides, among other things, for the sale by Assignor to Assignee of certain assets, property and rights, tangible and intangible, of Assignor used or useful in the Business (as defined in the Purchase Agreement); and

WHEREAS, pursuant to the Purchase Agreement, Assignor desires to transfer to Assignee, and Assignee desires to assume, all of Assignor’s right, title and interest in and to all Material Contracts (collectively, the “Assumed Contracts”).

NOW, THEREFORE, in considerationof the mutual promises contained in the Purchase Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Assignor, and subject to the terms and conditions of the Purchase Agreement:

1.Assignment and Assumption. Assignor hereby assigns, transfers and conveys to Assignee all of Assignor’s right, title and interest in and to the Assumed Material Contracts the Assumed Contracts, and Assignee hereby assumes and agrees to perform any and all obligations and liabilities of Assignor under the Assumed Contracts arising after the Closing (as defined in the Purchase Agreement). Without limiting the foregoing, Assignor shall remain liable for all Excluded Liabilities (as defined in the Purchase Agreement), and all obligations and liabilities under the Assumed Contracts which arose or are incurred prior to Closing.

2.Successors. All of the covenants, terms and conditions set forth herein shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective heirs, successors and assigns.

3.Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada, without giving effect to conflict of laws principles. The parties hereby consent to the jurisdiction of the courts of the State of Nevada and shall be subject to service of process in the State of Nevada with respect to any disputes arising, directly or indirectly, out of this Agreement.

4.Counterparts. This Agreement may be executed in one or more counterparts, all of which together shall for all purposes constitute one and the same instrument.

5.Further Assurances. From time to time after the date hereof, without further consideration, Assignor shall execute and deliver such other instruments of assignment, transfer and conveyance and shall take such other action as Assignee may reasonably request to more effectively assign, transfer and convey to Assignee, all of Assignor’s right, title and interest in and to any of the Assumed Contracts, or to enable it to exercise and enjoy all rights and benefits of Assignor with respect thereto.

[remainder of page left intentionally blank; signature page follows]

IN WITNESS WHEREOF, and intending to be legally bound hereby, each of Assignor and Assignee has caused this Agreement to be executed and delivered by its duly authorized representative as of the day and year first above written.

ASSIGNOR	ASSIGNEE
Captive Audience, LLC	Friendlyway Corporation
By:/s/ Paul Wiebel	By: /s/ Ken Upcraft
Name: Paul Wiebel	Name: Ken Upcraft
Title: Chairman	Title: Chief Executive Officer
	Ignition Media Group, Inc
	By: /s/ Thaddeus Bartkowski
	Name: Thaddeus Bartkowski
	Title: President

SCHEDULE D

Notification

EX-20.2

ADDENDUM TO AGREEMENT

This Addendum is made and entered into this 1^st day of August, 2006, by and between Pantel Systems Inc., a.k.a friendlyway Inc., a Nevada based publicly traded company with offices at 7222 Commerce Center Drive, Suite 240, Colorado Springs, CO 80919, hereinafter referred to as (“PSI”), and Ignition Media Group., Inc., a Nevada based wholly owned subsidiary of PSI , with offices at 7222 Commerce Center Drive, Suite 240, Colorado Springs, CO 80919, hereinafter referred to as (“IMG”) and collectively with PSI referred to as (“Buyer”) and Captive Audience LLC, a limited liability company, with offices at 1 Wiebel Plaza, Sussex, NJ 0746, hereinafter referred to as (“Seller”). The parties having executed an Asset Purchase Agreement on May 18, 2006, hereinafter referred to as (“APA”) having verbally agreed to amend, extend, and supplement the APA on July 28, 2006 enter into this written Addendum to amend, extend, and supplement the APA which, in the event of inconsistency with the APA this Addendum will control, as follows:

l. References: Buyer and Seller incorporate any and all references to the APA as if stated herein at length.

2. Pursuant to Section 6. of the APA, Closing: The closing of the transactions contemplated hereby (the “Closing”) shall occur on August 15, 2006. The fifty thousand dollar ($50,000) payment shall be paid to Seller by Buyer on or before August 3, 2006 and shall be credited to the Purchase Price as defined in Section 3.

3. Pursuant to and in Addition to Section 1. of the APA, Purchase and Sale:

(a) In consideration of Buyer’s payment of two million four hundred thousand dollars (US $2,400,000) (the “Purchase Price”), Seller hereby sells, assigns, transfers and delivers the Assets to Buyer. The Purchase Price shall be paid as follows: (i) cash in the amount of one million one hundred thousand dollars (US $1,100,000) which shall be paid by Buyer to Seller, which shall be documented in the form of a Promissory Note which Buyer and Seller shall execute at Closing consistent with the following structure:

Buyer shall make the following payments on the following dates to Seller, timeliness of the essence:

Payment Due Date from Seller to Buyer	Installment Payment of Purchase Price (USD)
August 15, 2006	$ 22,400.83
September 15, 2006	$ 72,400.83
October 15, 2006	$ 72,400.83
November 15, 2006	$ 89,400.83
December 15, 2006	$ 89,400.83
January 15, 2007	$ 89,400.83
February 15, 2007	$ 89,400.83
March 15, 2007	$ 89,400.83
April 15, 2007	$ 89,400.83
May 15, 2007	$ 89,400.83
June 15, 2007	$ 39,900.83
July 15, 2007	$ 39,900.83

and (ii) shares of PSI’s common stock having an agreed aggregate value of one million three hundred thousand dollars (US $1,300,000) hereinafter referred to as (“Common Stock”). The number of shares to be issued shall be equal to dividing one million three hundred thousand dollars (US $1,300,000) by the average closing bid price of the Buyer’s public stock during the ten days preceding Closing.

(g) At Closing Seller shall assign four separate Equipment Leases to Buyer has with four separate leasing companies, hereinafter referred to as (“Leasing Obligations”). Seller shall assign to Buyer the Leasing Obligations at the Closing and Buyer shall accept such assignment alleviating Seller and any personal guarantors of any responsibility related to the Leasing Obligations. The Leasing Obligations consist of the following:

Leases to be Assigned to Buyer from Seller at Closing
Leasing Company	Address	Number of Payments to be made	Payment Amount	Net Amount owed
Mainfest Funding Services	1450 Channel Parkway, Marshall, Minnesota 5628	17	$ 2,025.98	$ 30,389.70
First Niagara Leasing	PO Box 990, Lockport, NJ 14095	18	$ 2,203.89	$ 35,262.24
American Equipment Finance	258 King George Road, Warren, NJ 07059	21	$ 1,695.00	$ 32,205.00
American Bank Leasing Corp	555 Sun Valley Drive Suite E5, Roswell, Georgia 30076	29	$ 1,011.49	$ 29,333.21
				$ 127,190.15

4. In Addition to the APA, Remedies:

(a) In the event Buyer defaults in making any Installment Payments of the Purchase Price to Seller on the due date as outlined in the APA and this Addendum Buyer shall be in default of the APA. Upon receipt of written notice from Seller, Buyer shall have ten days (10) to remedy the default by providing Seller with that installment payment that is past due. In the event Buyer does not remedy such default within the ten day (10) period, Seller at Seller’s sole discretion may provide written notification, hereinafter referred to as (“Re-Assignment Notification”) to Buyer requiring Buyer to assign ownership of the Agreements Buyer has with Big Y Foods Inc., Foodtown Inc., and Wakefern Food Corporation hereinafter collectively referred to as (“Retail Agreements”), in addition to any digital signage equipment owned by Buyer that is installed in any retail locations which are owned, operated, or managed by Big Y Foods Inc., Foodtown Inc., and Wakefern Food Corporation hereinafter collectively referred to as (“Retail Partners”). Upon receipt of Re-Assignment Notification Buyer shall immediately thereupon assign clear title to the Retail Agreements, additionally Seller shall be responsible for any outstanding lease payments held by Buyer related to any digital signage equipment installed in retail locations owned, operated, or managed by the Retail Partners. In the event Buyer has executed lease payments for digital signage equipment installed in retail locations owned, operated, or managed by the Retail Partners, wherein the value of the lease payments that Buyer has made plus the amount of the Promissory Note which Buyer has paid to Seller exceeds the total value of the Promissory Note hereinafter referred to as (“Excess Lease Value”), Seller shall be obligated to repay Buyer the Excess Lease Value. In the event Buyer has purchased digital signage equipment installed in retail locations owned, operated, or managed by the Retail Partners, wherein the purchase price of the digital signage equipment plus the amount of the Promissory Note which Buyer has paid to Seller exceeds the total value of the Promissory Note, hereinafter referred to as (“Excess Purchase Value”), Seller shall be obligated to repay Buyer the Excess Purchase Value. The rate at which Seller shall pay Buyer both Excess Purchase Value and Excess Lease Value shall be calculated by adding the Excess Lease Value and the Excess Purchase Value, dividing it by the number of locations owned, operated, or managed by the Retail Partners wherein digital signage Equipment is installed and dividing it by twenty-four equal payments (24) to be paid by Seller to Buyer on the first of each month commencing thirty days (30) after the date of default. In exercising the aforementioned remedies, the Seller in no way becomes obligated to refund any part of the Purchase Price which has been previously paid.

5. In addition to the APA, Deployment:

Consistent with the Sellers representations made to the Retail Partners at the request of Buyer, Buyer agrees to procure the necessary Equipment to deploy the following locations in the time period specified below:

Deployment, Number of locations, by Retail Partner
	Big Y Foods Inc.	Foodtown Inc.	Wakefern Food Corporation
September 1, 2006	25
October 1, 2006	25
November 1, 2006	3
December 1, 2006		60
January 1, 2007
February 1, 2007			30
March 1, 2007			30
April 1, 2007			15

IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be executed by their respective duly authorized officers or representatives as of the last date set forth below.

Captive Audience, LLC	Pantel Systems, Inc
By:/s/ Paul Wiebel	By: /s/ Ken Upcraft
Name: Paul Wiebel	Name: Ken Upcraft
Title: Chairman	Title: Chief Executive Officer
	Ignition Media Group, Inc
	By: /s/ Thaddeus Bartkowski
	Name: Thaddeus Bartkowski
	Title: President

EX-20.3

COMMERCIAL PROMISSORY NOTE

August 22, 2006$872,809.85

Friendlyway Corporation, a Nevada corporation with offices at 7222 Commerce Center Drive, Suite 240, Colorado Springs, CO. 80919 (hereinafter referred to as “Maker”), promises to pay to the order of Captive Audience, LLC (“Lender”) the principal sum of Eight Hundred Seventy Two Thousand Eight Hundred Nine and no/100 Dollars ($872,809.85) in accordance with the terms of this Note.

Principal under this Note shall be payable in monthly installments pursuant to the attached schedule. Each payment shall be due on or before 5:00 p.m. on the date indicated for each payment. The entire balance of unpaid principal shall be due and payable July 15, 2007 (the “Maturity Date”).

Principal on this Note may be prepaid at any time, in whole or in part, without penalty.

All payments shall be made at the Lender’s offices at 1 Wiebel Plaza, Sussex, NJ 07461, or at such other place as may be designated in writing by the holder of this Note. All payments shall be made in legal tender of the United States of America.

The holder of this Note may declare a default hereunder in the event (a) that any payment required by this Note is not made at the time the same shall become due and payable, or (b) of the dissolution, termination of existence, merger, consolidation, insolvency, business failure, appointment of a receiver of any part of the property of, assignment for the benefit of creditors by, or the commencement of any proceedings under any bankruptcy or insolvency laws by or against, Maker. Upon the declaration of a default hereunder, and at the option of the holder, (x) the unpaid principal balance of this Note shall be accelerated and become immediately due and payable, and (y) the holder shall be entitled to request the appointment of a receiver for all or any part of the property of Maker. Maker hereby consents to the appointment of a receiver in such event.

Maker waives presentment, notice of dishonor and protest, and agrees that any extension of time with respect to any payment due under this Note, or the addition or release of any party or guarantor shall not affect the Maker's liability. No waiver by the holder of this Note of any payment or right under this Note shall operate as a waiver of any other payment or right under this Note. Maker will pay all costs and expenses, including reasonable attorneys' fees, paid or incurred by the holder to enforce this Note.

This Note is made for business purposes only, and not for personal, family or household purposes.

Friendlyway Corporation 

By: /s/ Ken Upcraft 

Kenneth J. Upcraft, President  

1

Promissory Note to Captive Audience, LLC

Principal Payment Schedule

Payment Due Date	Principal Payment
August 15, 2006	$ 22,400.83
September 15, 2006	$ 72,400.83
October 15, 2006	$ 72,400.83
November 15, 2006	$ 89,400.83
December 15, 2006	$ 89,400.83
January 15, 2007	$ 89,400.83
February 15, 2007	$ 89,400.83
March 15, 2007	$ 89,400.83
April 15, 2007	$ 89,400.83
May 15, 2007	$ 89,400.83
June 15, 2007	$ 39,900.83
July 15, 2007	$ 39,900.72
Total	$872,809.85

2

EX-99.1

Friendlyway Corporation Acquires Digital Media Firm Ignition Media

Acquisition Expands Digital Media Sales Nationwide

Colorado Springs, CO--(BUSINESS WIRE)—August 21, 2006—friendlyway Corporation (OTC BB: FDWY.OB - News), a self-service provider of customer-facing public access self-service systems, has acquired the assets and business of Ignition Media Group, LLC, Pennsylvania. Simultaneously with the closing of the transaction, Ignition Media acquired the assets and business of Captive Audience, LLC of New Jersey collectively expanding the presence of friendlyway nationally in 10 major markets. The assets were purchased by Ignition Media, Inc, Nevada, a wholly owned subsidiary of friendlyway Corporation

Ignition Media and Captive Audience provide location based advertising and marketing over digital networks. Founded in 2000, Captive Audience, LLC has installed digital signage systems in 120 locations in the Northeast including Javit Center, Sea Street, a water taxi service for New Jersey and New York, and delicatessen counters in various grocery store chains. Ignition Media has installed digital signage in 15 grocery store delicatessens. Additionally, since 2003, Ignition Media has provided sale support services for Captive Audience.

Together, the two companies hold contracts to expand their operations with the installation of digital signage in delicatessens representing six grocery store chains with over 750 locations in 10 major geographic national markets. Current installations are located in the north east and California. In 2005, the two companies combined generated over $2.4 million with approximately $1 million in EBIT. Additional information on Ignition Media can be found at www.ignition-media.com. More information regarding Captive Audience can be found at www.get-ca.com.

In addition, the company recently announced the additional acquisition of Big Fish Marketing, an advertising and marketing development company. The combined acquisitions significantly expand the presence of friendlyway’s digital signage initiative as a component of its e-banking self service kiosks currently being deployed. The three acquisitions also completes the company’s plans to create full service internal advertising sales and production units.

The Company has already installed five contracted locations for Ignition Media in August. Initial advertising sales are currently exceeding the Company’s targeted $2,000 per location per month goal. The Company further plans to expand installations to an additional 100 locations per month beginning in September with an expected minimum monthly revenue generation of $1,000 per system.

The initial rollout includes installations in five major geographic markets. Additionally, Ignition Media has conducted over twenty case studies across several product categories. The case studies provide evidence of significant product sale increases of up to 40% with the support in in-store digital signage marketing campaigns. The combination of supporting case studies, national geographic presence, and a monthly rollout schedule that increases the size of the network, Ignition Media plans to aggressively pursue national ad campaigns beginning in January 2007.

friendlyway Chief Executive Officer Ken Upcraft stated, “These acquisitions are not only strategically sound but financially accretive, importantly, they provide friendlyway with a significant national presence . In addition to being profitable, they also only provide current top line revenue which will increase with each month’s expansion of their systems in conjunction with the friendlyway e-banking kiosks.” Upcraft further commented, “We were seeking a production company and an adverting sales company to complete our internal operational needs allowing the company the ability to aggressively grow nationally and internationally. We believe that the acquisitions of Big Fish Marketing, Ignition Media and Captive Audience are synergistic fits and we’re excited to have them as a part of the friendlyway team.”

David V. Lott, Chairman of Friendlyway stated, “These acquisitions provide a horizontal expansion of our business model. Our product offerings can now be cross sold across the multiple new markets as we continue to deploy both our e-banking kiosks and digital signage systems. It is all about creating a reoccurring revenue stream.”

About friendlyway Corporation:

friendlyway Corporation provides self-service systems and technologies for public access at points of sale, service, and information. Its interactive information stations are used in various applications, such as ticketing, Internet access, self check-in, way-finding, lead management, e-commerce, banking, lobby management, and access control, as well as information and education. The company serves trade shows, conferences, events and promotions, hospitality, tourism and travel, healthcare and hospitals, financial services and banking, government, and fashion and retail sectors. friendlyway markets its products and services internationally through sales and marketing campaigns, conferences, one-on-one consultations, telemarketing, direct sales, and client and vendor referrals. For more information, please visit: http://www.friendlywayinc.com

This release includes projections of future results and "forward-looking statements" as that term is defined in Section 27A of the Securities Act of 1933 as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934 as amended (the "Exchange Act"). All statements that are included in this release, other than statements of historical fact, are forward-looking statements. Although the respective management of Friendlyway Corporation believes that the expectations reflected in these forward-looking statements are reasonable, they can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the expectations are disclosed in this release, including, without limitation, in conjunction with those forward-looking statements contained in this release.