Exhibit 10.1 CORNELL CAPITAL PARTNERS, L.P. 101 HUDSON STREET, SUITE 3700 JERSEY CITY, NEW JERSEY 07302 May 22, 2007 CONVERTIBLE DEBENTURE Poseidis, Inc. 222 Lakeview Avenue, Suite 160 West Palm Beach, FL 33401 Attn: Louis Pardo, CEO & President John J. McGovern, EVP & CFO Cornell Capital Partners, L.P. (the "Investor") financed Poseidis, Inc. (the "Company") using three (3) Secured Convertible Debentures: (1) $150,000 Secured Convertible Debenture (Date of Issuance: 8/26/05 as amended) (#CCP-001aa), (2) $150,000 Secured Convertible Debenture (Date of Issuance: 10/24/05 as amended) (#CCP-002a), (3) $344,000 Secured Convertible Debenture (Date of Issuance: 2/1/06) (#CCP-003) (collectively, the "Debentures"). The conversion prices for the Debentures are currently set at $0.04 per share. In addition, five (5) sets of warrants are outstanding and addressed by this letter agreement: (1) Warrant to Purchase 1,250,000 Shares (Date of Issuance: 8/26/05) (#CCP-001) (Debenture), (2) Warrant to Purchase 500,000 Shares (Date of Issuance: 2/1/06) (#CCP-002) (SEDA), (3) Warrant to Purchase 3,750,000 Shares (Date of Issuance: 2/1/06) (#CCP-003) (Debenture), (4) Warrant to Purchase 1,250,000 Shares (Date of Issuance: 2/1/06) (#CCP-004) (Debenture), (5) Warrant to Purchase 1,200,000 Shares (Date of Issuance: 2/1/06) (#CCP-005) (Debenture) (collectively the "Warrants"). A sixth warrant, which entitles the Investor to purchase 9,000,000 Shares (Date of Issuance: 2/1/06) (#CCP-006) (SEDA), is not amended hereby. The Company is currently under default based upon various terms of the Debentures and Warrants, and the related agreements pertaining to the above transactions (the "Existing Defaults"). In the interest of all parties, the Investor and the Company desire to, and do hereby, restructure these contracts as stated herein and further desire to, and do hereby, cure such defaults and do hereby waive and release any and all default-related liquidated damages, penalty interest, late fees and other penalties of any kind through and including the date hereof. The Debentures and Warrants are hereby amended as set forth below upon the execution of this agreement. COMPANY Poseidis, Inc. (PSED) (the "Company"). May 22, 2007 Page 2 of 6 INVESTOR Cornell Capital Partners, L.P. (the "Investor"). DEBENTURES Parties hereby amend the Debentures defined above with the following terms. COUPON 15% per annum, effective as of the date hereof, payable on the Maturity Date (as defined below). PRINCIPAL Payable in full at the Maturity Date. MONTHLY PAYMENTS The Company shall not be required to make any of the monthly payments set forth in the Debentures. CONVERSION PRICE $0.04, subject to adjustment as provided in the Debentures (the "Fixed Conversion Price"). MATURITY DATE September 1, 2007 (the "Maturity Date"). At the Maturity Date, Company shall pay principal and interest. In addition, the Investor shall have the option to extend the Maturity Date one (1) year on the same terms as stated herein. COMPANY OPTIONAL REDEMPTION RIGHT The Company, in its sole discretion, may redeem in cash any and all amounts owed under the Debentures prior to the Maturity Date by providing the Investor with three (3) business days advance notice, PROVIDED that (i) the Common Stock is trading below the Fixed Conversion Price at the time of a redemption notice, (ii) no Event of Default (as defined in the Debentures) has occurred, and (iii) the Company has been relisted to the OTC Bulletin Board or other exchange acceptable to the Investor. The Company shall pay a redemption premium equal to twenty percent (20%) of the principal amount being redeemed (the "Redemption Premium"). FUTURE FINANCING If the Company receives $5 million or more in subsequent financing prior to the Maturity Date, the Company shall repay the Debentures by paying principal and interest at Investor's option. COVENANTS OF THE COMPANY The Company shall obtain an opinion of counsel indicating that the Investor may tack on its original holding period to the holding period of the Debentures and Warrants amended in this transaction. The Company shall get current in all its reporting requirements with the SEC by August 15, 2007. The Company shall cause the process to obtain re-listing on the OTC Bulletin to be commenced promptly after the Company's SEC's reports are brought current, and such re-listing process shall be commenced no later than September 1, 2007. The Company shall use its best efforts to cause the OTC Bulletin Board re-listing process to be completed as soon as is reasonably possible. May 22, 2007 Page 3 of 6 All amounts owed, together with interest accrued and accruing thereon, and fees, costs, expenses and other charges (collectively, the "OBLIGATIONS") now or hereafter payable by the Company to Cornell under the Debentures are unconditionally owing by the Company to Cornell, without offset, setoff, defense or counterclaim of any kind, nature or description whatsoever. COVENANTS OF THE INVESTOR In reliance upon the representations, warranties and covenants of the Company contained in this letter agreement, and subject to the terms and conditions set forth herein, Cornell hereby waives on a one-time basis only the Existing Defaults and further hereby agrees to forbear from exercising its rights and remedies under the Debentures or related agreements or applicable law in respect of or arising out of the Existing Defaults (including without limitation any and all liquidated damages, penalty interest, late fees, and other penalties of any kind), subject to the conditions, amendments and modifications contained herein for the period (the "FORBEARANCE PERIOD") commencing on the date hereof and continuing for so long as the following conditions are met: (i) the Company strictly complies with the terms of this letter agreement (including the covenants of the Company set forth above), and (ii) there is no occurrence or existence of any Event of Default, other than the Existing Defaults. SECURITY The Debentures shall be secured by all of the following: (i) The assets of the Company (ii) Any and all assets of the Company pledged at the time of the previous funding and (iii) A pledge of Common Stock which is already in escrow. The Company hereby acknowledges, confirms and agrees that Cornell has and shall continue to have valid, enforceable and perfected first-priority liens upon and security interests heretofore granted pursuant to any and all security agreements or otherwise granted to or held by Cornell in connection with the Debentures and related agreements. May 22, 2007 Page 4 of 6 WARRANTS Warrants are hereby adjusted using the following prices: (1) Warrant to Purchase 1,250,000 Shares (CCP-001) - exercise price is hereby changed from $0.09 to $0.02 (2) Warrant to Purchase 500,000 Shares (CCP-002) - exercise price is hereby changed from $0.09 to $0.06 (3) Warrant to Purchase 3,750,000 Shares (CCP-003) - exercise price is hereby changed from $0.06 to $0.02 (4) Warrant to Purchase 1,250,000 Shares (CCP-004) - exercise price is hereby changed from $0.09 to $0.06 (5) Warrant to Purchase 1,200,000 Shares (CCP-005) - exercise price is hereby changed from $0.20 to $0.10. The Warrants shall be exercised on a cash, or cashless basis, at the option of the Investor. Investor may also tack back the Warrants to the original purchase date. WAIVER EXTENSION The Waiver Period under the waiver letter agreement between Investor and the Company dated December 11, 2006 is hereby extended through and including June 30, 2007 from the previous expiration date of February 28, 2007. ANTI-DILUTION Existing anti-dilution clauses shall remain in effect and unchanged, subject to the December 11, 2006 waiver letter agreement and as stated herein. REGISTRATION RIGHTS The Investor does not seek registration rights on any existing securities. All previously existing registration rights shall terminate as of the date hereof, and the Company may withdraw the existing SB-2 registration statement or amend it after the date hereof to remove all Cornell-related shares therefrom. However, any event of default not cured after written notice and expiration of any applicable cure period shall trigger registration rights defined below. All of the shares issuable pursuant to and underlying the Debentures and the Warrants (collectively, the "Registrable Securities") shall be subject to registration rights pursuant to which the Company shall file an initial registration statement to register the resale of the shares by the Investor within 45 days of the expiration of the default cure period and use its best efforts to have such registration statement declared effective within 120 days of the expiration of the default cure period. The initial registration statement shall include 33% of the public float. To the extent that May 22, 2007 Page 5 of 6 additional Registrable Securities remain outstanding after all shares under the initial registration statement have been sold, the Company shall be required to file additional registration statements for such shares within 45 days of the Investor providing written notice to the Company. Registrable Securities shall cease to have registration rights as they are eligible for sale by the Investor without restriction under Rule 144(k). The initial registration and any additional registration statement as referred to herein may include shares to be sold for the Company's account and/or shares to be sold by non-Investor third party seller stockholders with consent of Investor. DEFAULT Upon an Event of Default under the Debentures, the Debentures' conversion price shall be changed to the lower of the applicable Fixed Conversion Price or 80% of the lowest volume weighted average price reported by Bloomberg ("VWAP") during the five trading days prior to the conversion. A default of any terms of this letter agreement shall constitute an Event of Default under the Debentures. COMPANY'S CONDITIONS The transactions described herein are subject to approval by the Company's Board of Directors. May 22, 2007 Page 6 of 6 If the terms and conditions of this letter agreement are satisfactory, please sign as indicated below. Sincerely, CORNELL CAPITAL PARTNERS, L.P. By: Yorkville Advisors, LLC Its: Investment Manager By: /S/ MARK ANGELO ----------------------- Name: Mark Angelo Title: Portfolio Manager AGREED TO AND ACCEPTED: By: /S/ JOHN J. MCGOVERN -------------------- Name: JOHN J. MCGOVERN Title EVP & CFO Dated: May 22, 2007