Exhibit 10.98.1

February 16, 2006

Via Facsimile

To each respective Purchaser in the

Path 1 Network Technologies Inc.

Series B 7% Convertible Preferred Stock

PIPES Offering of April/June 2005:

This letter is sent on behalf of Path 1 Network Technologies Inc. (“Path 1”) to
persons who purchased and continue to hold (the “Series B Purchasers”) Path 1’s
Series B 7% Convertible Preferred Stock (“Series B Preferred Stock”) in the
Series B Preferred Stock PIPES offering of April/June 2005.

On December 6, 2005, Path 1 entered into certain financing transactions (the
“Transactions”) with Laurus Master Fund Ltd. (“Laurus”), pursuant to which Path
1 issued to Laurus (i) a Secured Convertible Note in the principal amount of
$2,100,000 (the “Laurus Note”), and (ii) Warrants for the purchase of shares of
Common Stock (the “Laurus Warrants”). Under the Laurus Note, Path 1 must, in
certain circumstances, make scheduled payments of principal and interest in
shares of Common Stock. Any shares of Common Stock that may in the future be
issued by Path 1 to Laurus or Laurus’ assignees (i) upon conversion of the
Laurus Note, (ii) as payment of principal or interest then due with respect to
the Laurus Note or (iii) upon exercise of the Laurus Warrants, together with the
Laurus Note and the Laurus Warrants, are collectively referred to herein as the
“Laurus Securities”.

As you may know, in January 2006, Castle Creek Technology Partners LLC (“CC”)
filed a lawsuit against Path 1 relating to and challenging the Transactions (the
“Lawsuit”). Path 1 has since reached a settlement with CC with respect to the
Lawsuit. Pursuant to the terms of the Settlement Agreement dated February 10,
2006 (the “Series B Settlement Agreement”, a copy of which is attached hereto as
Exhibit A) between CC and Path 1, CC has agreed, among other things, to dismiss
the Lawsuit and to receive certain benefits in exchange. Section 6 of the Series
B Settlement Agreement provides that each of the Series B Purchasers (other than
CC) is a direct and intended third-party beneficiary of the Series B Settlement
Agreement and that each such Series B Purchaser is entitled, as a third-party
beneficiary and upon his delivery of written notice to Path 1 pursuant to the
procedures described in this letter, to receive all of the same benefits of CC
under the Series B Settlement Agreement (other than under Section 7 thereof),
and in return, such Series B Purchaser shall become subject to all of the same
burdens as CC under the Series B Settlement Agreement.

If you follow such procedures, this letter will constitute a letter agreement
and memorialize the Series B Purchaser’s agreement to accept both the benefits
and the burdens of the Series B Settlement Agreement as described above. In this
connection, each Series B Purchaser that countersigns and returns this letter
agreement to Path 1 as provided herein agrees as follows:

Such Series B Purchaser acknowledges receipt of a copy of the Series B
Settlement Agreement, which copy is attached hereto as Exhibit A. Pursuant to
Section 6 of the Series B Settlement Agreement, such Series B Purchaser hereby
delivers written notice to Path 1 that he (i) wishes to receive the same
benefits as CC under the Series B Settlement Agreement (other than under
Section 7 thereof), as if the references to CC in the Series B Settlement
Agreement were references to such Series B Purchaser, and (ii) agrees to become
subject to the same burdens (including consents, waivers,

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renunciations, releases, covenants and agreements) as CC as set forth in the
Series B Settlement Agreement, as if the references to CC in the Series B
Settlement Agreement were references to such Series B Purchaser.

In order to agree as set forth above, you must (i) countersign this letter
agreement on the signature page hereto, (ii) fax a copy of the complete,
executed letter agreement to my attention at 858-346-9016 by no later than 5
p.m. Pacific Time on February 27, 2006, and (iii) mail the original copy of the
complete, executed letter agreement to my attention at Path 1 Network
Technologies Inc., 6215 Ferris Square, Suite 140, San Diego, California 92121.
Any Series B Purchaser who does not so countersign and return this letter
agreement as described above (faxing by the time and date indicated above) will
not be able to obtain the benefits set forth in the Series B Settlement
Agreement.

Please note that even if you do not do so, your rights can nonetheless be
affected by waivers and consents given by CC in the Series B Settlement
Agreement in its capacity as a majority holder of the Series B Preferred Stock
and/or of the Series B Preferred Stock and related warrants.

Express Reservation of Rights.

Nothing contained in the Series B Settlement Agreement or in this letter
agreement, express or implied, shall constitute an admission or agreement by
Path 1 that the issuance of the Laurus Securities, and particularly the Laurus
Note, in the Transactions required the consent of Path 1’s outstanding Series B
Preferred Stock pursuant to Section 10(iii) of the Series B Preferred Stock’s
certificate of designations. Path 1 expressly reserves any and all rights
relating to such matters.

If you have any questions, please give me a call or call our lawyer Hayden
Trubitt (858-450-5754) or consult with your own independent counsel. As you
know, Hayden represents Path 1 and does not represent any of the Series B
Purchasers.

 

Very truly yours,

   

Tom Tullie

Chief Executive Officer

 

AGREED TO, AND CONSENT

AND WAIVER GRANTED:

   

Print Name of Purchaser

   

Signature

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Distribution:

 

Name

  

Fax number

Steven R. Simpson    813-933-9812 Robert R. Bears, Sr.    727-372-1957 Robert R.
Bears, Jr.    727-372-1957 Christopher R. Cope, Trustee    425-962-4749

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EXHIBIT A

Series B Settlement Agreement

See attached.