Exhibit 10.85

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this “Agreement”) is made and entered into
as of April 26, 2005, by and among Path 1 Network Technologies Inc., a Delaware
corporation (the “Company”), and the persons and entities listed on Exhibit A
hereto (each, a “Purchaser” and, collectively, the “Purchasers”).

 

WHEREAS, upon the terms and subject to the conditions of the Securities Purchase
Agreement, dated as of the date hereof (the “Purchase Agreement”), the Company
has agreed to issue and sell to the Purchasers shares of the Company’s Series B
7% Convertible Preferred Stock, par value $0.001 per share (the “Preferred
Stock”), and Warrants to purchase shares of its Common Stock; and

 

WHEREAS, to induce the Purchasers to execute and deliver the Purchase Agreement
and to purchase the Preferred Stock and the Warrants, the Company has agreed to
provide certain registration rights under the Securities Act of 1933, as
amended, with respect to the Conversion Shares, the Warrant Shares and the PIK
Dividend Shares.

 

NOW, THEREFORE, in consideration of the representations, warranties and
agreements contained herein and other good and valuable consideration, the
receipt and legal adequacy of which are hereby acknowledged by the parties, the
Company and the Purchasers hereby agree as follows:

 

1. Definitions.

 

Capitalized terms used but not otherwise defined herein shall have the meanings
given such terms in the Purchase Agreement. As used in this Agreement, the
following terms shall have the following meanings:

 

“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly controls or is controlled by or under common control with such
Person. For the purposes of this definition, “control,” when used with respect
to any Person, means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise; and the
terms “affiliated,” “controlling” and “controlled” have meanings correlative to
the foregoing.

 

“Blackout Period” shall have the meaning set forth in Section 3(k).

 

“Board” shall have the meaning set forth in Section 3(k).

 

“Business Day” means any day except Saturday, Sunday and any day which is a
legal holiday or a day on which banking institutions in the State of California
generally are authorized or required by law or other government actions to
close.

 

“Commission” means the Securities and Exchange Commission.

 

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“Common Stock” means the Company’s Common Stock, $0.001 par value.

 

“Conversion Shares” shall have the meaning set forth in the definition of
“Registrable Securities.”

 

“Effectiveness Date” means with respect to the Registration Statement the
earlier of (i) the 60th day following the date on which this Agreement is
executed and delivered, before which the Company will use its reasonable
commercial efforts to cause the Registration Statement to become effective, and
(ii) the 5th Business Day after the date on which the Commission informs the
Company (a) that the Commission will not review or has no further review of the
Registration Statement, or (b) that the Company may request the acceleration of
the effectiveness of the Registration Statement.

 

“Effectiveness Period” shall have the meaning set forth in Section 2.

 

“Event” shall have the meaning set forth in Section 8(d).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Holder” means any holder from time to time of Registrable Securities including,
without limitation, each Purchaser and its assignees. To the extent this
Agreement refers to an election, consent, waiver, request or approval of or by
the Holders, such reference shall mean an election, consent, waiver, request or
approval by the holders of a majority in interest of the then-outstanding
Registrable Securities (on an as exercised basis).

 

“Indemnified Party” shall have the meaning set forth in Section 6(c).

 

“Indemnifying Party” shall have the meaning set forth in Section 6(c).

 

“Liquidated Damages” shall have the meaning set forth in Section 8(d).

 

“Losses” shall have the meaning set forth in Section 6(a).

 

“Person” means an individual or a corporation, partnership, trust, incorporated
or unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or political subdivision thereof) or
other entity of any kind.

 

“PIK Dividend Shares” shall have the meaning set forth in the definition of
“Registrable Securities.”

 

“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

 

“Prospectus” means the prospectus included in the Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus

 

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supplement, with respect to the terms of the offering of any portion of the
Registrable Securities covered by the Registration Statement, and all other
amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference in such Prospectus.

 

“Registrable Securities” means (i) the shares of Common Stock issued and
issuable pursuant to the conversion of the Preferred Stock, and upon any stock
split, stock dividend, recapitalization or similar event with respect to such
shares of Common Stock and any other securities issued in exchange of or
replacement of such shares of Common Stock (collectively, the “Conversion
Shares”); until in the case of any Conversion Share (a) such Conversion Share is
sold pursuant to the Registration Statement covering such Conversion Shares, or
(b) such Conversion Share is sold in compliance with Rule 144 or may be sold
pursuant to Rule 144(k), after which time such Conversion Share shall not be a
Registrable Security; (ii) the shares of Common Stock issued and issuable
pursuant to the exercise of the Warrants, and upon any stock split, stock
dividend, recapitalization or similar event with respect to such shares of
Common Stock and any other securities issued in exchange of or replacement of
such shares of Common Stock (collectively, the “Warrant Shares”); until in the
case of any Warrant Share (a) such Warrant Share is sold pursuant to the
Registration Statement covering such Warrant Shares, or (b) such Warrant Share
is sold in compliance with Rule 144 or may be sold pursuant to Rule 144(k),
after which time such Warrant Share shall not be a Registrable Security, (iii)
the shares of Common Stock issued and issuable pursuant to the exercise of
warrants granted to Silverwood Partners LLC or its designees in connection with
the issuance of the Shares and the Warrants, and upon any stock split, stock
dividend, recapitalization or similar event with respect to such shares of
Common Stock and any other securities issued in exchange of or replacement of
such shares of Common Stock (collectively, the “Silverwood Warrant Shares”);
until in the case of any Silverwood Warrant Share (a) such Silverwood Warrants
Share is sold pursuant to the Registration Statement covering such Silverwood
Warrant Shares, or (b) such Silverwood Warrant Share is sold in compliance with
Rule 144 or may be sold pursuant to Rule 144(k), after which time such
Silverwood Warrant Share shall not be a Registrable Security and (iv) the shares
of Common Stock issued and issuable as PIK Dividend Shares, and upon any stock
split, stock dividend, recapitalization or similar event with respect to such
shares of Common Stock and any other securities issued in exchange of or
replacement of such shares of Common Stock (collectively, the “PIK Dividend
Shares”); until in the case of any PIK Dividend Share (a) such PIK Dividend
Share is sold pursuant to the Registration Statement covering such PIK Dividend
Shares, or (b) such PIK Dividend Share is sold in compliance with Rule 144 or
may be sold pursuant to Rule 144(k), after which time such PIK Dividend Share
shall not be a Registrable Security.

 

“Registration Statement” means the registration statement, including the
Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference in such registration statement, for
the resale of the Registrable Securities required to be filed by the Company
with the Commission pursuant to this Agreement.

 

“Required Filing Date” means the tenth day immediately following the date on
which the Purchase Agreement is executed and delivered.

 

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“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

 

“Rule 158” means Rule 158 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

 

“Rule 415” means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Silverwood Warrant Shares” shall have the meaning set forth in the definition
of “Registrable Securities.”

 

“Special Counsel” means any one firm of special counsel to the Holders, for
which the Holders will be reimbursed by the Company pursuant to Section 5 of
this Agreement and Section 8.1 of the Purchase Agreement.

 

“Warrant Shares” shall have the meaning set forth in the definition of
“Registrable Securities.”

 

2. Registration. On or prior to the Required Filing Date, the Company shall
prepare and file with the Commission a Registration Statement covering the
resale of the Registrable Securities for an offering to be made on a continuous
basis pursuant to Rule 415. The Registration Statement shall be on Form S-3
(unless the Company is not then eligible to register for resale the Registrable
Securities on Form S-3, in which case such registration shall be on another
appropriate form in accordance with the Securities Act and the rules promulgated
thereunder) and shall contain (except as otherwise directed by the Purchasers)
the “Plan of Distribution” substantially in the form attached hereto as Exhibit
B; provided, however, that if the Company files the Registration Statement on a
form other than Form S-3 as provided herein, the Company shall refile such
Registration Statement on Form S-3 within five (5) Business Days of becoming
eligible to use such form for the resale of the Registrable Securities. The
Company shall (i) not permit any securities other than the Registrable
Securities to be included in the Registration Statement, (ii) use its reasonable
commercial efforts to cause the Registration Statement to be declared effective
under the Securities Act (including filing with the Commission a request for
acceleration of effectiveness in accordance with Rule 12dl-2 promulgated under
the Exchange Act within five (5) Business Days after the date that the Company
is notified (orally or in writing, whichever is earlier) by the Commission that
the Registration Statement will not be “reviewed,” or not be subject to further
review) as soon as possible after the filing thereof, but in any event prior to
the Effectiveness Date, and (iii) keep such Registration Statement continuously
effective under the Securities Act for a period of two years from the Closing
Date (the “Effectiveness Period”).

 

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3. Registration Procedures; Company’s Obligations.

 

In addition to its obligations under paragraph 2 above, the Company shall:

 

(a) (i) Prepare and file with the Commission such amendments, including
post-effective amendments, to the Registration Statement as may be necessary to
keep the Registration Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period in order to register for
resale under the Securities Act all of the Registrable Securities; (ii) cause
the related Prospectus to be amended or supplemented by any required Prospectus
supplement, and as so supplemented or amended to be filed pursuant to Rule 424
(or any similar provisions then in force) promulgated under the Securities Act;
(iii) respond promptly to any comments received from the Commission with respect
to the Registration Statement or any amendment thereto and promptly provide each
Holder with true and complete copies of all correspondence from and to the
Commission relating to the Registration Statement; and (iv) comply in all
material respects with the provisions of the Securities Act and the Exchange Act
with respect to the disposition of all Registrable Securities covered by the
Registration Statement during the applicable period in accordance with the
intended methods of disposition by the Holders set forth in the Registration
Statement as so amended or in such Prospectus as so supplemented.

 

(b) Notify each Holder and any Special Counsel promptly (and, in the case of
(i)(A) below, not less than three (3) Business Days prior to such filing and, in
the case of (i)(C) below, no later than the first Business Day following the
date on which the Registration Statement becomes effective) and (if requested by
any such Person) confirm such notice in writing no later than three (3) Business
Days following the day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement is proposed to be filed,
(B) when the Commission notifies the Company whether there will be a “review” of
such Registration Statement and whenever the Commission comments in writing on
such Registration Statement, and (C) with respect to the Registration Statement
or any post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal or state governmental authority
for amendments or supplements to the Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement covering any or
all of the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and (v) of the occurrence of any
event that makes any statement made in the Registration Statement or Prospectus
or any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to the
Registration Statement, Prospectus or other documents so that, in the case of
the Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.

 

The Company shall promptly furnish to the Special Counsel, without charge, (i)
any correspondence from the Commission or the Commission’s staff to the Company
or its

 

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representatives relating to any Registration Statement, and (ii) promptly after
the same is prepared and filed with the Commission, a copy of any written
response to the correspondence received from the Commission.

 

(c) Use its reasonable commercial efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of, (i) any order suspending the effectiveness of
the Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any U.S. jurisdiction, at the earliest practicable moment.

 

(d) If requested by any Holder, (i) promptly incorporate in a Prospectus
supplement or post-effective amendment to the Registration Statement such
information as such Holder reasonably requests should be included therein, and
(ii) make all required filings of such Prospectus supplement or such
post-effective amendment as soon as practicable after the Company has received
notification of the matters to be incorporated in such Prospectus supplement or
post-effective amendment.

 

(e) Furnish to each Holder and any Special Counsel, without charge, at least one
conformed copy of each Registration Statement and each amendment thereto,
including financial statements and schedules, all documents incorporated or
deemed to be incorporated therein by reference, and all exhibits to the extent
requested by such Person (including those previously furnished or incorporated
by reference) promptly after the filing of such documents with the Commission.

 

(f) Promptly deliver to each Holder and any Special Counsel, without charge, as
many copies of the Registration Statement, Prospectus or Prospectuses (including
each form of prospectus) and each amendment or supplement thereto as such
Persons may reasonably request; and the Company hereby consents to the use of
such Prospectus and each amendment or supplement thereto by each Holder in
connection with the offering and sale of the Registrable Securities covered by
such Prospectus and any amendment or supplement thereto. Should a Holder offer
or sell the Registrable Securities, such Holder agrees to comply with all
applicable securities laws.

 

(g) Prior to any public offering of Registrable Securities, use its reasonable
commercial efforts to register or qualify or cooperate with each Holder and any
Special Counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as such Holder reasonably requests in
writing, to keep each such registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by a Registration Statement;
provided, however, that the Company shall not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified or to take
any action that would subject it to general service of process in any such
jurisdiction where it is not then so subject or subject the Company to any tax
in any such jurisdiction where it is not then so subject.

 

(h) Upon the occurrence of any event contemplated by Section 3(b)(v), promptly
prepare a supplement or amendment, including a post-effective amendment, to the

 

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Registration Statement or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, and file any
other required document so that, as thereafter delivered, neither the
Registration Statement nor such Prospectus will contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

 

(i) Use its reasonable commercial efforts to cause all Registrable Securities
relating to such Registration Statement to be listed on any securities exchange,
quotation system, market or over-the-counter bulletin board, if any, on which
the same securities issued by the Company are then listed as and when required
pursuant to the Purchase Agreement.

 

(j) Comply in all material respects with all applicable rules and regulations of
the Commission and make generally available to its security holders earning
statements satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 not later than forty-five (45) days after the end of any twelve (12)
month period (or ninety (90) days after the end of any twelve (12) month period
if such period is a fiscal year) commencing on the first day of the first fiscal
quarter of the Company after the effective date of the Registration Statement,
which statement shall conform to the requirements of Rule 158.

 

(k) If (i) there is material non-public information regarding the Company which
the Company’s Board of Directors (the “Board”) reasonably determines not to be
in the Company’s best interest to disclose and which the Company is not
otherwise required to disclose, or (ii) there is a significant business
opportunity (including, but not limited to, the acquisition or disposition of
assets (other than in the ordinary course of business) or any merger,
consolidation, tender offer or other similar transaction) available to the
Company which the Board reasonably determines not to be in the Company’s best
interest to disclose and which the Company would be required to disclose under
the Registration Statement, then the Company may, by written notice to each
Holder, suspend effectiveness of a Registration Statement and suspend the sale
of Registrable Securities under a Registration Statement one (1) time every
three (3) months or three (3) times in any twelve month period, provided that
the Company may not suspend its obligation for more than thirty (30) days in the
aggregate in any twelve month period if suspension is for any of the reasons
listed above or sixty (60) days in the aggregate in any twelve month period for
any other reason (each, a “Blackout Period”).

 

(l) Within two (2) Business Days after the Registration Statement which includes
the Registrable Securities is ordered effective by the Commission, the Company
shall deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to each Holder whose
Registrable Securities are included in such Registration Statement) written
confirmation that the Registration Statement has been declared effective by the
Commission in the form attached hereto as Exhibit C.

 

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4. Registration Procedures; Holder’s Obligations

 

In connection with the registration of the Registrable Securities, each Holder
shall:

 

(a) if the Registration Statement refers to such Holder by name or otherwise as
the holder of any securities of the Company, have the right to require (if such
reference to such Holder by name or otherwise is not required by the Securities
Act or any similar federal statute then in force) the deletion of the reference
to such Holder in any amendment or supplement to the Registration Statement that
will be filed or prepared subsequent to the time that such reference ceases to
be required.

 

(b) (i) not sell any Registrable Securities under the Registration Statement
until it has received copies of the Prospectus as then amended or supplemented
as contemplated in Section 3(f) and notice from the Company that such
Registration Statement and any post-effective amendments thereto have become
effective as contemplated by Section 3(b), (ii) comply with the prospectus
delivery requirements of the Securities Act as applicable to it in connection
with sales of Registrable Securities pursuant to the Registration Statement, and
(iii) furnish to the Company information regarding such Holder and the
distribution of such Registrable Securities as is required by law to be
disclosed in the Registration Statement, and the Company may exclude from such
registration the Registrable Securities of such Holder if it fails to furnish
such information within a reasonable time prior to the filing of each
Registration Statement, supplemented Prospectus and/or amended Registration
Statement.

 

(c) upon receipt of a written notice from the Company of the occurrence of any
event of the kind described in Section 3(b)(ii), 3(b)(iii), 3(b)(iv), 3(b)(v) or
3(l), forthwith discontinue disposition of such Registrable Securities under the
Registration Statement until such Holder’s receipt of the copies of the
supplemented Prospectus and/or amended Registration Statement contemplated by
Section 3(h), or until it is advised in writing by the Company that the use of
the applicable Prospectus may be resumed, and, in either case, has received
copies of any additional or supplemental filings that are incorporated or deemed
to be incorporated by reference in such Prospectus or Registration Statement.

 

Each Holder hereby (i) acknowledges to the Company that the Commission currently
takes the position that coverage of short sales of shares of Common Stock
“against the box” made prior to the Effectiveness Date with any security covered
by any Prospectus is a violation of Section 5 of the Securities Act, as set
forth in Item 65, Section 5 under Section A, of the Manual of Publicly Available
Telephone Interpretations, dated June 1997, compiled by the Office of Chief
Counsel, Division of Corporation Finance, (ii) agrees (on behalf of itself or
any Person over which it has direct control) not to use any of the securities
covered by any Prospectus to cover any short sales, hedging or similar
transactions with the same economic effect as a short sale, made prior to the
Effectiveness Date, and (iii) agrees to comply with Regulation M under the
federal securities laws.

 

5. Registration Expenses

 

All reasonable fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by the Company whether or not
the Registration Statement is filed or becomes effective and whether or not any
Registrable Securities are sold pursuant to the Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, the following: (i) all registration and filing fees (including,
without limitation, fees and expenses (A) with respect to filings required to

 

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be made with each securities exchange or other market on which Registrable
Securities are required hereunder to be listed, (B) with respect to filings
required to be made with the Commission, and (C) in compliance with state
securities or Blue Sky laws); (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities and of
printing prospectuses if the printing of prospectuses is requested by the
holders of a majority of the Registrable Securities included in the Registration
Statement); (iii) messenger, telephone and delivery expenses of the Company;
(iv) fees and disbursements of counsel for the Company; and (v) fees and
expenses of all other Persons retained by the Company in connection with the
consummation of the transactions contemplated by this Agreement, including,
without limitation, the Company’s independent public accountants (including the
expenses of any comfort letters or costs associated with the delivery by
independent public accountants of a comfort letter or comfort letters). In
addition, the Company shall be responsible for all of its internal expenses
incurred in connection with the consummation of the transactions contemplated by
this Agreement (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit, and the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange as required
hereunder.

 

6. Indemnification

 

(a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, its
permitted assignees, officers, directors, agents, brokers (including brokers who
offer and sell Registrable Securities as principal as a result of a pledge or
any failure to perform under a margin call of Common Stock), investment advisors
and employees, each Person who controls any such Purchaser or permitted assignee
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) and the officers, directors, agents and employees of each such
controlling Person, and the respective successors, assigns, estate and personal
representatives of each of the foregoing, to the fullest extent permitted by
applicable law, from and against any and all claims, losses, damages,
liabilities, penalties, judgments, costs (including, without limitation, costs
of investigation) and expenses (including, without limitation, reasonable
attorneys’ fees and expenses) (collectively, “Losses”), as incurred, arising out
of or relating to any untrue or alleged untrue statement of a material fact
contained in the Registration Statement, any Prospectus, as supplemented or
amended, if applicable, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or supplement thereto, in
the light of the circumstances under which they were made) not misleading,
except (i) to the extent, but only to the extent, that such untrue statements or
omissions are based solely upon information regarding such Holder furnished in
writing to the Company by such Holder expressly for use therein, which
information was reviewed and expressly approved by such Holder expressly for use
in the Registration Statement, such Prospectus or in any amendment or supplement
thereto, or (ii) as a result of the failure of such Holder to deliver a
Prospectus, as amended or supplemented (but only if such amendment or supplement
has been delivered to such Holder by the Company), to a purchaser in connection
with an offer or sale. The Company shall notify each Holder promptly of the
institution, threat or assertion of any Proceeding of which the Company is aware
in connection with the transactions contemplated by this Agreement. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of an Indemnified

 

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Party (as defined in Section 6(c) hereof) and shall survive the transfer of the
Registrable Securities by a Holder.

 

(b) Indemnification by Holder. Each Holder and its permitted assignees shall,
severally and not jointly, indemnify and hold harmless the Company, its
directors, officers, agents and employees, each Person who controls the Company
(within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act), and the directors, officers, agents or employees of such
controlling Persons, and the respective successors, assigns, estate and personal
representatives of each of the foregoing, to the fullest extent permitted by
applicable law, from and against any and all Losses, as incurred, arising out of
or relating to (i) the failure of such Holder to deliver a Prospectus, as
amended or supplemented, to a purchaser in connection with a purchase or sale,
(ii) such Holder’s use of a representation or prospectus other than the
Prospectus, as amended or supplemented (but only if such amendment or supplement
has been delivered to such Holder by the Company), in connection with a purchase
or sale, or (iii) any untrue or alleged untrue statement of a material fact
contained in the Registration Statement, any Prospectus, as supplemented or
amended, if applicable, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or supplement thereto, in
the light of the circumstances under which they were made) not misleading, to
the extent, but only to the extent, that (A) such untrue statement or omission
is contained in or omitted from any information so furnished in writing by such
Holder to the Company specifically for inclusion in the Registration Statement
or such Prospectus, and (B) such information was reasonably relied upon by the
Company for use in the Registration Statement, such Prospectus or, to the extent
that such information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities, was reviewed and expressly approved in
writing by such Holder expressly for use in the Registration Statement, such
Prospectus or such form of Prospectus Supplement. Notwithstanding anything to
the contrary contained herein, a Holder shall be liable under this Section 6(b)
for only that amount as does not exceed the net proceeds received by such Holder
as a result of the sale of Registrable Securities pursuant to such Registration
Statement.

 

(c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought
or asserted against any Person entitled to indemnity pursuant to Section 6(a) or
6(b) hereunder (an “Indemnified Party”), such Indemnified Party promptly shall
notify the Person from whom indemnity is sought (the “Indemnifying Party) in
writing, and the Indemnifying Party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Party and
the payment of all fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that it shall be
finally determined by a court of competent jurisdiction (which determination is
not subject to appeal or further review) that such failure shall have materially
and adversely prejudiced the Indemnifying Party.

 

An Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (i) the Indemnifying Party has agreed in writing to pay such fees and
expenses; or (ii) the Indemnifying Party shall have failed promptly to assume
the defense of such Proceeding and to employ counsel reasonably

 

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satisfactory to such Indemnified Party in any such Proceeding; or (iii) the
named parties to any such Proceeding (including any impleaded parties) include
both such Indemnified Party and the Indemnifying Party, and such Indemnified
Party shall have been advised by counsel that a conflict of interest is likely
to exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld, conditioned or delayed. No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, which consent shall not unreasonably be withheld, conditioned or delayed,
effect any settlement of any pending Proceeding in respect of which any
Indemnified Party is a party, unless such settlement includes an unconditional
release of such Indemnified Party from all liability on claims that are the
subject matter of such Proceeding.

 

All reasonable fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten (10)
Business Days of written notice thereof to the Indemnifying Party (regardless of
whether it is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder or pursuant to applicable law).

 

(d) Contribution. If a claim for indemnification under Section 6(a) or 6(b) is
unavailable to an Indemnified Party because of a failure or refusal of a
governmental authority to enforce such indemnification in accordance with its
terms (by reason of public policy or otherwise), then each Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions, statements or
omissions that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and Indemnified
Party shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission of a material fact, has been taken
or made by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall
be deemed to include, subject to the limitations set forth in Section 6(c), any
reasonable attorneys’ or other reasonable fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for under
Section 6(a) or 6(b) was available to such party in accordance with its terms.
Notwithstanding anything to the contrary contained herein, a Holder shall be
liable or required to contribute under this Section 6(d) for only that amount as

 

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does not exceed the net proceeds to such Holder as a result of the sale of
Registrable Securities pursuant to the Registration Statement.

 

The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 6(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.

 

The indemnity and contribution agreements contained in this Section are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.

 

7. Rule 144.

 

As long as any Holder owns Registrable Securities, the Company covenants to
timely file (or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by the Company after
the date hereof pursuant to Section 13(a) or 15(d) of the Exchange Act. As long
as any Holder owns Registrable Securities, if the Company is not required to
file reports pursuant to Section 13(a) or 15(d) of the Exchange Act, it will
prepare and furnish to each such Holder and make publicly available in
accordance with Rule 144(c) promulgated under the Securities Act annual and
quarterly financial statements, together with a discussion and analysis of such
financial statements in form and substance substantially similar to those that
would otherwise be required to be included in reports required by Section 13(a)
or 15(d) of the Exchange Act, as well as any other information required thereby,
in the time period that such filings would have been required to have been made
under the Exchange Act. The Company further covenants that it will take such
further action as a Holder may reasonably request, all to the extent required
from time to time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144 promulgated under the Securities Act, including providing
any legal opinions of counsel to the Company referred to in the Purchase
Agreement. Upon the request of any Holder, the Company shall deliver to such
Holder a written certification of a duly authorized officer as to whether it has
complied with such requirements.

 

8. Miscellaneous.

 

(a) Remedies. The remedies provided in this Agreement and the Purchase Agreement
are cumulative and not exclusive of any remedies provided by law. In the event
of a breach by the Company or by a Holder of any of their obligations under this
Agreement, each Holder or the Company, as the case may be, in addition to being
entitled to exercise all rights granted by law and under this Agreement,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement. The Company and each Holder agree that monetary
damages would not provide adequate compensation for any losses incurred by
reason of a breach by it of any of the provisions of this Agreement and hereby
further agrees that, in the event of any action for specific performance in
respect of such breach, it shall waive the defense that a remedy at law would be
adequate.

 

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(b) No Inconsistent Agreements. Neither the Company nor any of its Affiliates
has as of the date hereof entered into, nor shall the Company or any of its
Affiliates, on or after the date of this Agreement, enter into, any agreement
with respect to its securities that is inconsistent with the rights granted to
the Holders in this Agreement or otherwise conflicts with the provisions hereof.
Without limiting the generality of the foregoing, without the written consent of
each Holder, the Company shall not grant to any Person the right to request the
Company to register any securities of the Company under the Securities Act if
the rights so granted are inconsistent with the rights granted to the Holder set
forth herein, or otherwise prevent the Company with complying with all of its
obligations hereunder.

 

(c) Registration of Other Securities; No Piggyback on Registrations. During the
period beginning on the date on which the Purchase Agreement is executed and
delivered and ending on the Effectiveness Date, the Company shall refrain from
filing any registration statement other than (i) a Registration Statement filed
hereunder, (ii) a registration statement on Form S-8 with respect to stock
option plans and agreements and stock plans currently in effect and disclosed in
the Purchase Agreement or the schedules thereto, or (iii) a registration
statement on Form S-4 with respect to an acquisition or other business
combination involving the Company. Neither the Company nor any of its security
holders (other than each Holder in such capacity pursuant hereto and Silverwood
Partners LLC or its designees) may include securities of the Company in the
Registration Statement.

 

(d) Failure to File Registration Statement and Other Events. The Company and the
Holder agree that the Holder will suffer damages if the Registration Statement
is not filed on or prior to the Required Filing Date or is not declared
effective by the Commission on or prior to the Effectiveness Date and maintained
in the manner contemplated herein during the Effectiveness Period or if certain
other events occur. The Company and the Holder further agree that it would not
be feasible to ascertain the extent of such damages with precision. Accordingly,
if (i) the Registration Statement is not filed on or prior to the Required
Filing Date, or is not declared effective by the Commission on or prior to the
Effectiveness Date, or (ii) the Company fails to file with the Commission a
request for acceleration in accordance with Rule 12dl-2 promulgated under the
Exchange Act within five (5) Business Days after the date that the Company is
notified (orally or in writing, whichever is earlier) by the Commission that a
Registration Statement will not be “reviewed,” or not subject to further review,
or (iii) the Registration Statement is filed with and declared effective by the
Commission but thereafter (otherwise than as permitted by item (iv) below)
ceases to be effective or available as to all Registrable Securities for 30 days
during the Effectiveness Period, without being succeeded within a reasonable
period by a subsequent Registration Statement filed with and declared effective
by the Commission, or (iv) the Company suspends the use of the Prospectus
forming a part of such Registration Statement for more than thirty (30) days in
any period of 365 consecutive days if the Company suspends in reliance on its
ability to do so due to the existence of a development that, in the good faith
discretion of the Board, makes it appropriate to so suspend or which renders the
Company unable to comply with the Commission requirements, or the Company
suspends the use of the Prospectus forming a part of such Registration Statement
for more than sixty (60) days in any period of 365 consecutive days for any
other reason, or (v) the Company has breached Section 3(l) of this Agreement
(any such failure or breach being referred to as an “Event”), the Company shall
pay as liquidated damages for such failure or breach and not as a penalty (the
“Liquidated Damages”) to the Holder an amount equal to three

 

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percent (3%) of the purchase price of the Preferred Stock and the Warrants paid
by the initial Holder pursuant to the Purchase Agreement for each thirty (30)
day period, pro rated for any period less than thirty (30) days, following the
Event until the applicable Event has been cured. Payments to be made pursuant to
this Section 8(d) shall be due and payable in cash in arrears at the end of each
thirty (30) day period. The parties agree that the Liquidated Damages represent
a reasonable estimate on the part of the parties, as of the date of this
Agreement, of the amount of damages that may be incurred by the Holder if the
Registration Statement is not filed on or prior to the Required Filing Date or
has not been declared effective by the Commission on or prior to the
Effectiveness Date and maintained in the manner contemplated herein during the
Effectiveness Period or if any other Event as described herein has occurred.

 

(e) Consent to Jurisdiction. The Company and each Purchaser (i) hereby
irrevocably submit to the non-exclusive jurisdiction of a United States District
Court for in California and the courts of the State of California for the
purposes of any suit, action or proceeding arising out of or relating to this
Agreement or the Purchase Agreement, and (ii) hereby waive, and agree not to
assert in any such suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of the suit,
action or proceeding is improper. The Company and each Purchaser consent to
process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing in this Section 8(e) shall affect
or limit any right to serve process in any other manner permitted by law.

 

(f) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the same shall be in writing and signed by the Company and the Holders.

 

(g) Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earlier of (i) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified for notice prior to 5:00 p.m., Pacific Time, on a Business Day,
(ii) the first Business Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified for notice later than 5:00 p.m., Pacific Time, on any date and earlier
than 11:59 p.m., Pacific Time, on such date, (iii) the Business Day following
the date of mailing, if sent by nationally recognized overnight courier service,
or (iv) actual receipt by the party to whom such notice is required to be given.

 

  (x) if to the Company:

 

Path 1 Network Technologies Inc.

6215 Ferris Square

Suite 140

San Diego, California 92121

Attention: Mr. John R. Zavoli, President & CEO

Telecopier: (858) 450-4203

 

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with a copy to:

 

Heller Ehrman LLP

4350 La Jolla Village Drive, 7th Floor

San Diego, California 92122

Attention: Hayden Trubitt, Esq.

Telecopier: (858) 450-8499

 

  (y) if to any Holder:

 

At the address of such Holder set forth on Exhibit A to this Agreement.

 

or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice.

 

(h) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted assigns and shall
inure to the benefit of the Holder and its successors and assigns. The Company
may not assign this Agreement or any of its respective rights or obligations
hereunder without the prior written consent of the Purchasers, except in
connection with an acquisition of the Company. Each Purchaser may assign its
rights hereunder in the manner and to the Persons as permitted under the
Purchase Agreement.

 

(i) Assignment of Registration Rights. The rights of a Holder hereunder,
including the right to have the Company register for resale Registrable
Securities in accordance with the terms of this Agreement, shall be assignable
by each Holder to any transferee of such Holder of all or a portion of the
Registrable Securities if: (i) the Holder agrees in writing with the transferee
or assignee to assign such rights, and a copy of such agreement is furnished to
the Company within a reasonable time after such assignment; (ii) the Company is,
within a reasonable time after such transfer or assignment, furnished with
written notice of (A) the name and address of such transferee or assignee, and
(B) the securities with respect to which such registration rights are being
transferred or assigned; (iii) following such transfer or assignment the further
disposition of such securities by the transferee or assignees is restricted
under the Securities Act and applicable state securities laws; (iv) at or before
the time the Company receives the written notice contemplated by clause (ii) of
this Section, the transferee or assignee agrees in writing with the Company to
be bound by all of the provisions of this Agreement; and (v) such transfer shall
have been made in accordance with the applicable requirements of the Purchase
Agreement and shall be for no less than 10% of the Registrable Securities
originally beneficially owned by such Holder. In addition, the Holder shall have
the right to assign its rights hereunder to any other Person with the prior
written consent of the Company, which consent shall not be unreasonably
withheld, conditioned or delayed. The rights to assignment shall apply to each
Holder (and to subsequent) successors and assigns. In the event of an assignment
pursuant to this Section 8(i), the Company shall file a prospectus supplement to
the

 

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Prospectus or file an amendment to the Registration Statement to incorporate
information concerning the transferee, and the transferring Holder shall pay all
incremental costs and expenses incurred by the Company in connection with filing
a Registration Statement (or an amendment to the Registration Statement) to
register the shares of Registrable Securities assigned to any assignee or
transferee of the Purchaser.

 

(j) Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original, and all of
which taken together shall constitute one and the same Agreement. In the event
that any signature is delivered by facsimile transmission, such signature shall
create a valid binding obligation of the party executing (or on whose behalf
such signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.

 

(k) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without regard to
principles of conflicts of law thereof. This Agreement shall not be interpreted
or construed with any presumption against the party causing this Agreement to be
drafted.

 

(l) Cumulative Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.

 

(m) Termination. This Agreement shall terminate on the date on which all
remaining Registrable Securities may be sold without restriction pursuant to
Rule 144(k) of the Securities Act.

 

(n) Severability. If any term, provision, covenant or restriction of this
Agreement is held to be invalid, illegal, void or unenforceable in any respect,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

 

(o) Headings. The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect any of the
provisions hereof.

 

[Remainder of page intentionally left blank. Signature pages to follow.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized persons as of the date first indicated
above.

 

PATH 1 NETWORK TECHNOLOGIES INC.

By:

      /s/    JOHN R. ZAVOLI            

Name:

  John R. Zavoli    

Title:

  President & CEO

 

CASTLE CREEK TECHNOLOGY PARTNERS LLC By:   Castle Creek Partners, LLC,
Investment Manager     By:   /s/    STEPHEN D. FRIEND                 Stephen D.
Friend, Managing Director

 

/s/    ROBERT R. BEARS, SR.         ROBERT R. BEARS, SR.

 

/s/    ROBERT R. BEARS, JR.         ROBERT R. BEARS, JR.

 

/s/    STEVEN R. SIMPSON         STEVEN R. SIMPSON

 

/s/    CHRISTOPHER R. COPE        

CHRISTOPHER R. COPE TTEE U/A

DTD 11/22/1989

 

/s/    MARK ROSENBLOOM         MARK ROSENBLOOM

 

--------------------------------------------------------------------------------

 

EXHIBIT A

PURCHASERS

 

Castle Creek Technology Partners LLC

 

Robert R. Bears, Sr.

 

Robert R. Bears, Jr.

 

Steven R. Simpson

 

Christopher R. Cope TTEE U/A DTD 11/22/1989

 

Mark Rosenbloom

 

A-1

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EXHIBIT B

PLAN OF DISTRIBUTION

 

We are registering the shares of common stock on behalf of the selling
stockholders and their successors, including their transferees, pledgees or
donees or their successors,. The common stock may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of sale,
at prices related to the prevailing market prices, at varying prices determined
at the time of sale, or at negotiated prices. These sales may be effected at
various times in one or more of the following transactions, or in other kinds of
transactions:

 

  •   transactions on any national securities exchange or U.S. inter-dealer
system of a registered national securities association on which the common stock
may be listed or quoted at the time of sale;

 

  •   in the over-the-counter market;

 

  •   in private transactions and transactions otherwise than on these exchanges
or systems or in the over-the-counter market;

 

  •   in connection with short sales of the shares made after the effective date
of the registration statement of which this prospectus is a part;

 

  •   by pledge to secure or in payment of debt and other obligations;

 

  •   through the writing of options, whether the options are listed on an
options exchange or otherwise;

 

  •   in connection with the writing of non-traded and exchange-traded call
options, in hedge transactions and in settlement of other transactions in
standardized or over-the-counter options and derivative transactions; or

 

  •   through a combination of any of the above transactions.

 

The selling stockholders and their successors, including their transferees,
pledgees or donees or their successors, may sell the common stock directly to
purchasers or through underwriters, broker-dealers or agents, who may receive
compensation in the form of discounts, concessions or commissions from the
selling stockholders or the purchasers. These discounts, concessions or
commissions as to any particular underwriter, broker-dealer or agent may be in
excess of those customary in the types of transactions involved.

 

In addition, any securities covered by this prospectus which qualify for sale
pursuant to Rule 144 of the Securities Act may be sold under Rule 144 rather
than pursuant to this prospectus.

 

We entered into a registration rights agreement for the benefit of the selling
stockholders to register the common stock under applicable federal and state
securities laws. The registration

 

B-1

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rights agreement provides for cross-indemnification of the selling stockholders
and us and our respective directors, officers and controlling persons against
specific liabilities in connection with the offer and sale of the common stock,
including liabilities under the Securities Act. We will pay substantially all of
the expenses incurred in connection with registering the common stock for resale
by the selling stockholders. The selling stockholders, however, will pay all of
the underwriting and brokerage commissions and discounts (if any) incident to
the offering and sale of their common stock.

 

Each selling stockholder has been advised, and has acknowledged to us, that the
Commission currently takes the position that coverage of short sales of shares
of our common stock “against the box” made prior to the effective date of the
registration statement of which this prospectus is a part with any security
covered by this prospectus is a violation of Section 5 of the Securities Act, as
set forth in Item 65, Section 5 under Section A, of the Manual of Publicly
Available Telephone Interpretations, dated June 1997, compiled by the Office of
Chief Counsel, Division of Corporation Finance. Accordingly, each selling
stockholder has agreed (on behalf of itself or any person over which it has
direct control) not to use any of the securities covered by this prospectus to
cover any short sales, hedging or similar transactions with the same economic
effect as a short sale, made prior to the effective date of the registration
statement. In addition, each selling stockholder has agreed to comply with
Regulation M under the federal securities laws.

 

B-2

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EXHIBIT C

 

FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

 

[Name and address of Transfer Agent]

_____________________

_____________________

_____________________

Attn:                                  

 

  Re: Path 1 Network Technologies Inc.

 

Ladies and Gentlemen:

 

We are counsel to Path 1 Network Technologies Inc., a Delaware corporation (the
“Company”), and have represented the Company in connection with that certain
Securities Purchase Agreement (the “Purchase Agreement”), dated as of April 26,
2005, by and among the Company and the purchasers (the “Purchasers” and the
“Holders”) named therein pursuant to which the Company issued and will issue to
the Purchasers its Series B 7% Convertible Preferred Stock and other securities.
Pursuant to the Purchase Agreement, the Company has also entered into a
Registration Rights Agreement with the Purchasers (the “Registration Rights
Agreement”), dated as of April 26, 2005, pursuant to which the Company agreed,
among other things, to register the Registrable Securities (as defined in the
Registration Rights Agreement), under the Securities Act of 1933, as amended
(the “1933 Act”). In connection with the Company’s obligations under the
Registration Rights Agreement, on             , 2005, the Company filed a
Registration Statement on Form S-3 (File No. 333-            ) (the
“Registration Statement”) with the Securities and Exchange Commission (the
“SEC”) relating to the resale of the Registrable Securities which names the
Holders as selling stockholders thereunder.

 

In connection with the foregoing, we advise you that a member of the SEC’s staff
has advised us by telephone that the SEC has entered an order declaring the
Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic inquiry of a member of the SEC’s staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and, accordingly, the
Registrable Securities are available for resale under the 1933 Act in the manner
specified in, and pursuant to the terms of, the Registration Statement.

 

Very truly yours, By:    

 

cc: [PURCHASERS]

 

C-1