Document:

Registration Rights Agreement, dated April 26, 2005

 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. 
  

 “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 

  

 -11- 

 
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. 
  

 -12- 

 (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 

  

 -13- 

 
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 

 

 -14- 

 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 

  

 -15- 

 
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.] 
  

 -16- 

 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 

  
 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 

 
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 

  
 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-1Form of Warrant to Purchase Shares of Common Stock

 Exhibit 10.86 
  
 THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES ISSUABLE UPON EXERCISE OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY IN FORM AND SUBSTANCE TO IT THAT SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES ACT
OF 1933, AS AMENDED 
  
 THE TRANSFER OF THIS WARRANT IS
RESTRICTED AS DESCRIBED HEREIN. 
  
 Path 1 Network Technologies
Inc. 
  
 Warrant for the Purchase of Shares of Common Stock,

 par value $0.001 per Share 
  

			
	 No. W-            
	 	             Shares

  
 THIS CERTIFIES that,
for value received,                     , whose address is
                     (the “Holder”), is entitled to subscribe for and purchase from Path 1 Network Technologies Inc., a
Delaware corporation (the “Company”), upon the terms and conditions set forth herein,              shares of the Company’s Common Stock, par value $0.001 per
share (“Common Stock”), at a price of $3.25 per share, subject to adjustment as provided herein (the “Exercise Price”). As used herein the term “this Warrant” shall mean and include this Warrant and
any Common Stock or Warrants hereafter issued as a consequence of the exercise or transfer of this Warrant in whole or in part. This Warrant is issued pursuant to a Securities Purchase Agreement, dated as of April 26, 2005, among the Company and the
parties named therein (the “Purchase Agreement”). 
  
 The number of shares of Common Stock issuable upon exercise of the Warrants (the “Warrant Shares”) and the Exercise Price may be adjusted from time to time as hereinafter set forth. The Warrant Shares are entitled to the
benefits, and subject to the obligations, set forth in the Registration Rights Agreement, dated as of April 26, 2005, among the Company, the Holder and certain other parties (the “Registration Rights Agreement”). 
  
 1. Exercise Period. This Warrant may be exercised at any time or from
time to time during the period commencing at 10:00 A.M. Pacific time on May             , 2005 (the “Issue Date”) and ending at 5:00 P.M. Pacific Time on May
            , 2010 (the “Exercise Period”). 
  
 2. Procedure for Exercise; Effect of Exercise. 
  

 1 

 (a) Cash Exercise. This Warrant may be exercised, in whole or in part, by the
Holder during normal business hours on any business day during the Exercise Period by (i) the presentation and surrender of this Warrant to the Company at its principal office along with a duly executed Notice of Exercise (in the form attached to
this Warrant) specifying the number of Warrant Shares to be purchased, and (ii) delivery of payment to the Company of the Exercise Price for the number of Warrant Shares specified in the Notice of Exercise by cash, wire transfer of immediately
available funds to a bank account specified by the Company, or by certified or bank cashier’s check. 
  
 (b) Cashless Exercise. This Warrant may also be exercised by the Holder through a cashless exercise, as described in this Section
2(b). In such case, this Warrant may be exercised, in whole or in part, by the Holder during normal business hours on any business day during the Exercise Period by the presentation and surrender of this Warrant to the Company at its principal
office along with a duly executed Notice of Exercise specifying the number of Warrant Shares to be applied to such exercise. The number of shares of Common Stock to be issued upon exercise of this Warrant pursuant to this Section 2(b) shall equal
the value of this Warrant (or the portion thereof being canceled) computed as of the date of delivery of this Warrant to the Company using the following formula: 
  
 X = Y(A-B) 
 A 
  
 Where: 
  
 X = the number of shares of Common Stock to be issued to Holder under this Section 2(b); 
  
 Y = the number of Warrant Shares identified in the Notice of
Exercise as being applied to the subject exercise; 
  
 A = the Current Market Price on such date; and 
  
 B = the Exercise Price on such date 
  
 For
purposes of this Section 2(b), Current Market Price shall have the definition provided in Section 6(g). 
  
 The Company acknowledges and agrees that this Warrant was issued on the Issue Date. Consequently, the Company acknowledges and agrees that, if the Holder
conducts a cashless exercise pursuant to this Section 2(b), the period during which the Holder held this Warrant may, for purposes of Rule 144 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), be
“tacked” to the period during which the Holder holds the Warrant Shares received upon such cashless exercise. 
  
 Notwithstanding the foregoing, the Holder may conduct a cashless exercise pursuant to this Section 2(b) only after the first anniversary of the Issue
Date, and then only in the event that a registration statement covering the resale of the Warrant Shares is not then effective and available to the Holder for resales of Warrant Shares at the time that the Holder wishes to conduct such cashless
exercise. 
  

 2 

 (c) Effect of Exercise. Upon receipt by the Company of this Warrant and a Notice
of Exercise, together with proper payment of the Exercise Price (or pursuant to a cashless exercise as provided in this Section 2), the Company agrees that such Warrant Shares shall be deemed to be issued to the Holder as the record holder of such
Warrant Shares as of the close of business on the date on which this Warrant has been surrendered and payment has been made for such Warrant Shares in accordance with this Warrant and the Holder shall be deemed to be the holder of record of the
Warrant Shares, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such Warrant Shares shall not then be actually delivered to the Holder. A stock certificate or certificates for the
Warrant Shares specified in the Notice of Exercise shall be delivered to the Holder as promptly as practicable, and in any event within five business days, thereafter (such fifth business day being referred to as the “Delivery
Date”). The stock certificate(s) so delivered shall be in any such denominations as may be reasonably specified by the Holder in the Notice of Exercise. If this Warrant should be exercised in part only, the Company shall, upon surrender of
this Warrant for cancellation, execute and deliver a new Warrant evidencing the right of the Holder to purchase the balance of the Warrant Shares subject to purchase hereunder. 
  
 (d) Failure to Deliver Warrant Shares. In the event that the Company fails for any reason to deliver
to the Holder the number of Warrant Shares specified in the applicable Notice of Exercise (without any restrictive legend if permitted by the terms of the Purchase Agreement) on or before the Delivery Date therefor (an “Exercise
Default”), the Company shall pay to the Holder payments (“Exercise Default Payments”) in the amount of (i) (N/365) multiplied by (ii) the aggregate Exercise Price of the Warrant Shares which are the subject of such
Exercise Default multiplied by (iii) the lower of fifteen percent (15%) per annum and the maximum rate permitted by applicable law (the “Default Interest Rate”), where “N” equals the number of days elapsed between
the original Delivery Date of such Warrant Shares and the date on which all of such Warrant Shares are issued and delivered to the Holder. Cash amounts payable hereunder shall be paid on or before the fifth (5th) business day of each calendar month
following the calendar month in which such amount has accrued. The Holder’s rights and remedies hereunder are cumulative, and no right or remedy is exclusive of any other. In addition to the amounts specified herein, the Holder shall have the
right to pursue all other remedies available to it at law or in equity (including, without limitation, a decree of specific performance and/or injunctive relief). Nothing herein shall limit the Holder’s right to pursue actual damages for the
Company’s failure to issue and deliver Warrant Shares on the applicable Delivery Date (including, without limitation, damages relating to any purchase of Common Stock by the Holder to make delivery on a sale effected in anticipation of
receiving Warrant Shares upon exercise, such damages to be in an amount equal to (A) the aggregate amount paid by the Holder for the Common Stock so purchased minus (B) the aggregate amount of net proceeds, if any, received by the Holder from
the sale of the Warrant Shares issued by the Company pursuant to such exercise). 
  
 (e) Exercise Limitations. In no event shall a Holder be permitted to exercise this Warrant, or part hereof, if, upon such exercise,
the number of shares of Common Stock beneficially owned by the Holder (other than shares which would otherwise be deemed 

  

 3 

 
beneficially owned except for being subject to a limitation on conversion or exercise analogous to the limitation contained in this paragraph (e)), would
exceed 4.99% of the number of shares of Common Stock then issued and outstanding. As used herein, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules thereunder.
To the extent that the limitation contained in this Section 2(e) applies, the submission of an Exercise Notice by the Holder shall be deemed to be the Holder’s representation that this Warrant is exercisable pursuant to the terms hereof and the
Company shall be entitled to rely on such representation without making any further inquiry as to whether this paragraph (e) applies. Nothing contained herein shall be deemed to restrict the right of a Holder to exercise this Warrant, or part
thereof, at such time as such exercise will not violate the provisions of this paragraph (e). This paragraph (e) may not be amended unless such amendment is approved by the holders of a majority of the Common Stock then outstanding; provided,
however, that the limitations contained in this paragraph (e) shall cease to apply upon sixty (60) days’ prior written notice from the Holder to the Company. 
  
 3. Registration of Warrants; Transfer of Warrants. Any Warrants issued upon the transfer or exercise in part of this
Warrant shall be numbered and shall be registered in a Warrant Register as they are issued. The Company shall be entitled to treat the registered holder of any Warrant on the Warrant Register as the owner in fact thereof for all purposes and shall
not be bound to recognize any equitable or other claim to or interest in such Warrant on the part of any other person, and shall not be liable for any registration or transfer of Warrants which are registered or to be registered in the name of a
fiduciary or the nominee of a fiduciary unless made with the actual knowledge that a fiduciary or nominee is committing a breach of trust in requesting such registration or transfer, or with the knowledge of such facts that its participation therein
amounts to bad faith. This Warrant shall be transferable only on the books of the Company upon delivery thereof duly endorsed by the Holder or by its duly authorized attorney or representative, or accompanied by proper evidence of succession,
assignment, or authority to transfer. In all cases of transfer by an attorney, executor, administrator, guardian, or other legal representative, duly authenticated evidence of his or its authority shall be produced. Upon any registration of
transfer, the Company shall deliver a new Warrant or Warrants to the person entitled thereto. This Warrant may be exchanged, at the option of the Holder thereof, for another Warrant, or other Warrants of different denominations, of like tenor and
representing in the aggregate the right to purchase a like number of Warrant Shares, upon surrender to the Company or its duly authorized agent. 
  
 4. Restrictions on Transfer. 
  
 (a) The Holder, as of the date of issuance hereof, represents to the Company that such Holder is acquiring the Warrants for its own
account for investment purposes and not with a view to the distribution thereof or of the Warrant Shares. Notwithstanding any provisions contained in this Warrant to the contrary, this Warrant and the related Warrant Shares shall not be transferable
except pursuant to the proviso contained in the following sentence or upon the conditions specified in this Section 4, which conditions are intended, among other things, to insure compliance with the provisions of the Securities Act and applicable
state law in respect of the transfer of this Warrant or such Warrant Shares. The 

  

 4 

 
Holder by acceptance of this Warrant agrees that the Holder will not transfer this Warrant or the related Warrant Shares prior to delivery to the Company of
an opinion of the Holder’s counsel (as such opinion and such counsel are described in Section 4(b) hereof) or until registration of such Warrant Shares under the Securities Act has become effective or after a sale of such Warrant or Warrant
Shares has been consummated pursuant to Rule 144 or Rule 144A under the Securities Act; provided, however, that the Holder may freely transfer this Warrant or such Warrant Shares (without delivery to the Company of an opinion of counsel) (i)
to one of its nominees, affiliates or a nominee thereof, (ii) to a pension or profit-sharing fund established and maintained for its employees or for the employees of any affiliate, (iii) from a nominee to any of the aforementioned persons as
beneficial owner of this Warrant or such Warrant Shares, (iv) to a qualified institutional buyer, so long as such transfer is effected in compliance with Rule 144A under the Securities Act, or (v) to an accredited investor (as such term is defined
in Regulation D under the Securities Act) giving equivalent investment intent representations and agreements. 
  
 (b) The Holder, by its acceptance hereof, agrees that prior to any transfer of this Warrant or of the related Warrant Shares (other than
as permitted by Section 4(a) hereof or pursuant to a registration under the Securities Act), the Holder will give written notice to the Company of its intention to effect such transfer, together with an opinion of such counsel for the Holder as
shall be reasonably acceptable to the Company, to the effect that the proposed transfer of this Warrant and/or such Warrant Shares may be effected without registration under the Securities Act. Upon delivery of such notice and opinion to the
Company, the Holder shall be entitled to transfer this Warrant and/or such Warrant Shares in accordance with the intended method of disposition specified in the notice to the Company. 
  
 (c) Each stock certificate representing Warrant Shares issued upon exercise or exchange of this Warrant
shall bear the following legend unless the opinion of counsel referred to in Section 4(b) states such legend is not required: 
  
 “THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED
EXCEPT UPON DELIVERY TO THE CORPORATION OF AN OPINION OF COUNSEL SATISFACTORY IN FORM AND SUBSTANCE TO IT THAT SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES ACT OF 1933, AS AMENDED.” 
  
 The Holder understands that the Company may place, and may instruct any transfer agent or depository for the Warrant Shares to place, a stop
transfer notation in the securities records in respect of the Warrant Shares. 
  
 5. Reservation of Shares. The Company shall at all times during the Exercise Period reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of providing for the
exercise of the rights to purchase all Warrant Shares granted pursuant to the Warrants, such number of shares of Common Stock as shall, from time to time, be sufficient therefor. The Company covenants that all shares of Common Stock issuable upon

  

 5 

 
exercise of this Warrant, upon receipt by the Company of the full Exercise Price therefor (or pursuant to a cashless exercise), and all shares of Common
Stock issuable upon conversion of this Warrant, shall be validly issued, fully paid, non-assessable, and free of preemptive rights, and free from all taxes, claims, liens, charges and other encumbrances. 
  
 6. Exercise Price Adjustments. The Exercise Price shall be subject to
adjustment from time to time as follows: 
  
 (a)
(i) In the event that the Company shall (A) pay a dividend or make a distribution to all its stockholders, in shares of Common Stock, on any class of capital stock of the Company or any subsidiary which is not directly or indirectly wholly owned by
the Company, (B) split or subdivide its outstanding Common Stock into a greater number of shares, or (C) combine its outstanding Common Stock into a smaller number of shares, then in each such case the Exercise Price and number of underlying shares
of Common Stock in effect immediately prior thereto shall be adjusted so that the Holder of a Warrant thereafter surrendered for Exercise shall be entitled to receive the number of shares of Common Stock that such Holder would have owned or have
been entitled to receive after the occurrence of any of the events described above had such Warrant been exercised immediately prior to the occurrence of such event. An adjustment made pursuant to this Section 6(a)(i) shall become effective
immediately after the close of business on the record date in the case of a dividend or distribution (except as provided in Section 6(e) below) and shall become effective immediately after the close of business on the effective date in the case of
such subdivision, split or combination, as the case may be. Any shares of Common Stock issuable in payment of a dividend shall be deemed to have been issued immediately prior to the close of business on the record date for such dividend for purposes
of calculating the number of outstanding shares of Common Stock under clause (ii) below. 
  
 (ii) In the event that the Company shall commit to issue or distribute New Securities (as defined in the Purchase Agreement), in any such
case at a price per share less than the Current Market Price per share on the earliest of (A) the date the Company shall enter into a firm contract for such issuance or distribution, (B) the record date for the determination of stockholders entitled
to receive any such New Securities, if applicable, or (C) the date of actual issuance or distribution of any such New Securities (provided that the issuance of Common Stock upon the exercise of New Securities that are rights, warrants, options or
convertible or exchangeable securities (“New Derivative Securities”) will not cause an adjustment in the Exercise Price if no such adjustment would have been required at the time such New Derivative Security was issued), then the
Exercise Price in effect immediately prior to such earliest date shall be adjusted so that the Exercise Price shall equal the price determined by multiplying the Exercise Price in effect immediately prior to such earliest date by the fraction:

  
 (x) whose numerator shall be (I) the number of shares of
Common Stock outstanding on such date plus (II) the number of shares of Common Stock which the aggregate offering price of the total number of New Securities so offered would have purchased at such Current Market Price (such amount, with
respect to any New 

  

 6 

 
Derivative Securities, determined by multiplying the total number of shares of Common Stock subject thereto by the exercise price of such New Derivative
Securities, and dividing the product so obtained by such Current Market Price), and 
  
 (y) whose denominator shall be (I) the number of shares of Common Stock outstanding on such date plus (II) the number of additional shares of Common Stock to be issued or distributed or receivable upon exercise
of any such New Derivative Security. 
  
 Such adjustment shall be made
successively whenever any such New Securities are issued. In determining whether any New Derivative Securities entitle the holders to subscribe for or purchase shares of Common Stock at less than such Current Market Price, and in determining the
aggregate offering price of shares of Common Stock so issued, there shall be taken into account any consideration received by the Company for such Common Stock or New Derivative Securities, the value of such consideration, if other than cash, to be
determined by the Board of Directors of the Company (the “Board of Directors”), whose determination shall be conclusive and described in a certificate filed with the records of corporate proceedings of the Company. If any New
Derivative Security to purchase or acquire Common Stock, the issuance of which resulted in an adjustment in the Exercise Price pursuant to this subsection (ii) shall expire and shall not have been exercised, the Exercise Price shall immediately upon
such expiration be recomputed to the Exercise Price which would have been in effect had the adjustment of the Exercise Price made upon the issuance of such New Derivative Security been made on the basis of offering for subscription, purchase or
issuance, as the case may be, only of that number of shares of Common Stock actually purchased or issued upon the actual exercise of such New Derivative Security. 
  
 (iii) No adjustment in the Exercise Price shall be required unless the adjustment would require an increase
or decrease of at least 1% in the Exercise Price then in effect; provided, however, that any adjustments that by reason of this Section 6(a) are not required to be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 6(a) shall be made to the nearest cent or nearest 1/100th of a share. 
  
 (iv) The Company from time to time may reduce the Exercise Price by any amount for any period of time in the discretion of the Board of
Directors. 
  
 (v) In the event that, at any time
as a result of an adjustment made pursuant to Sections 6(a)(i) through 6(a)(iii) above, the Holder of any Warrant thereafter surrendered for exercise shall become entitled to receive any shares of the Company other than shares of the Common Stock,
thereafter the number of such other shares so receivable upon exercise of any such Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common
Stock contained in Sections 6(a)(i) through 6(a)(iv) above, and the other provisions of this Section 6(a) with respect to the Common Stock shall apply on like terms to any such other shares. 
  

 7 

 (vi) For avoidance of doubt, and notwithstanding anything herein to the contrary, any
adjustment of the Conversion Price of the Company’s Series B 7% Convertible Preferred Stock pursuant to paragraph 7(j) of its Certificate of Designations, and any corresponding adjustment of the conversion price of the Company’s 7%
Convertible Preferred Stock, shall result in no adjustment of the Exercise Price of this Warrant. 
  
 (b) In case of any reclassification of the Common Stock (other than in a transaction to which Section 6(a)(i) applies), any consolidation
of the Company with, or merger of the Company into, any other entity, any merger of another entity into the Company (other than a merger that does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock of the Company), any sale or transfer of all or substantially all of the assets of the Company or any compulsory share exchange, pursuant to which share exchange the Common Stock is converted into other securities, cash or other
property, then lawful provision shall be made as part of the terms of such transaction whereby the Holder of a Warrant then outstanding shall have the right thereafter, during the period such Warrant shall be exercisable, to exercise such Warrant
only for the kind and amount of securities, cash and other property receivable upon the reclassification, consolidation, merger, sale, transfer or share exchange by a holder of the number of shares of Common Stock of the Company into which a Warrant
might have been exercised immediately prior to the reclassification, consolidation, merger, sale, transfer or share exchange assuming that such holder of Common Stock failed to exercise rights of election, if any, as to the kind or amount of
securities, cash or other property receivable upon consummation of such transaction subject to adjustment as provided in Section 6(a) above following the date of consummation of such transaction. The provisions of this Section 6(b) shall similarly
apply to successive reclassifications, consolidations, mergers, sales, transfers or share exchanges. 
  
 (c) If: 
  

	 	(i)	the Company shall take any action which would require an adjustment in the Exercise Price pursuant to Section 6(a); or 

  

	 	(ii)	the Company shall authorize the granting to the holders of its Common Stock generally of rights, warrants or options to subscribe for or purchase any shares of any class or any
other rights, warrants or options; or 

  

	 	(iii)	there shall be any reclassification or change of the Common Stock (other than a subdivision or combination of its outstanding Common Stock or a change in par value) or any
consolidation, merger or statutory share exchange to which the Company is a party and for which approval of any stockholders of the Company is required, or the sale or transfer of all or substantially all of the assets of the Company; or

  

 8 

	 	(iv)	there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; 

  
 then, in each such case, the Company shall cause to be filed with the transfer agent for the Warrants and shall cause to be mailed to each
Holder at such Holder’s address as shown on the books of the transfer agent for the Warrants, as promptly as possible, but at least 15 days prior to the applicable date hereinafter specified, a notice stating (A) the date on which a record is
to be taken for the purpose of such dividend, distribution or granting of rights, warrants or options, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or
rights, warrants or options are to be determined, or (B) the date on which such reclassification, change, consolidation, merger, statutory share exchange, sale, transfer, dissolution, liquidation or winding-up is expected to become effective or
occur, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, change, consolidation, merger,
statutory share exchange, sale, transfer, dissolution, liquidation or winding up. Failure to give such notice or any defect therein shall not affect the legality or validity of the proceedings described in this Section 6(c). 
  
 (d) Whenever the Exercise Price is adjusted as herein
provided, the Company shall promptly file with the transfer agent for the Warrants a certificate of an officer of the Company setting forth the Exercise Price after the adjustment and setting forth a brief statement of the facts requiring such
adjustment and a computation thereof. The Company shall promptly cause a notice of the adjusted Exercise Price to be mailed to each Holder. 
  
 (e) In any case in which Section 6(a) provides that an adjustment shall become effective immediately after a record date for an event and
the date fixed for such adjustment pursuant to Section 6(a) occurs after such record date but before the occurrence of such event, the Company may defer until the actual occurrence of such event (i) issuing to the Holder of any Warrants exercised
after such record date and before the occurrence of such event the additional shares of Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the Common Stock issuable upon such exercise before
giving effect to such adjustment, and (ii) paying to such holder any amount in cash in lieu of any fraction pursuant to Section 6(i). 
  
 (f) In case the Company shall take any action affecting the Common Stock, other than actions described in this Section 6, which in the
opinion of the Board of Directors would materially adversely affect the exercise right of the Holders, the Exercise Price may be adjusted, to the extent permitted by law, in such manner, if any, and at such time, as the Board of Directors may
determine to be equitable in the circumstances. 
  
 (g) For the purpose of any computation under this Warrant, the “Current Market Price” means, when used with respect to a share of Common Stock as of any date, the volume weighted average price of the Common Stock as
reported on the American Stock Exchange for the ten (10) consecutive trading days immediately preceding (but not including) such date, or, in case the Common Stock is listed on a national securities exchange other than American Stock Exchange, the
volume weighted average price of the Common Stock on the ten 

  

 9 

 
(10) consecutive trading days immediately preceding (but not including) such date as reported for consolidated transactions with respect to securities listed
on the principal national securities exchange on which the Common Stock is listed or admitted to trading or, if the Common Stock is not listed or admitted to trading on the American Stock Exchange or any national securities exchange, the volume
weighted average price of the Common Stock on the ten (10) consecutive trading days immediately preceding (but not including) such date in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated
Quotations System or such other system then in use or, if the Common Stock is not quoted by any such organization, the volume weighted average price of the Common Stock as of the ten (10) consecutive trading days immediately preceding (but not
including) such date furnished by a New York Stock Exchange member firm selected by the Company, or if the Common Stock is not quoted by any such organization and no such New York Stock Exchange member firm is able to provide such prices, such price
as is determined by the Independent Directors in good faith. “Independent Directors” means directors of the Company that (i) are not 5% or greater stockholders of the Company or the designee of any such stockholder, (ii) are not
officers or employees of the Company, any of its subsidiaries or of a stockholder referred to above in clause (i), (iii) are not Related Persons, and (iv) do not have relationships that, in the opinion of the Board of Directors, would interfere with
their exercise of independent judgment in carrying out the responsibilities of the directors, and “Related Person” means an individual related to an officer, director or employee of the Company or any of its affiliates which
relation is by blood, marriage or adoption and not more remote than first cousin. 
  
 (h) Upon each adjustment of the Exercise Price, this Warrant shall thereafter evidence the right to purchase, at the adjusted Exercise
Price, that number of shares (calculated to the nearest hundredth) obtained by dividing (i) the product obtained by multiplying the number of shares purchasable upon exercise of this Warrant prior to adjustment of the number of shares by the
Exercise Price in effect prior to adjustment of the Exercise Price, by (ii) the Exercise Price in effect after such adjustment of the Exercise Price. 
  
 (i) The Company shall not be required to issue fractions of shares of Common Stock or other capital stock of the Company upon the exercise
of this Warrant. If any fraction of a share would be issuable on the exercise of this Warrant (or specified portions thereof), the Company shall purchase such fraction for an amount in cash equal to the same fraction of the Current Market Price of
such share of Common Stock on the date of exercise of this Warrant. 
  
 7. Transfer Taxes. The issuance of any shares or other securities upon the exercise of this Warrant, and the delivery of certificates or other instruments representing such shares or other securities, shall be made without charge to
the Holder for any tax or other charge in respect of such issuance. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of any certificate in a name other than
that of the Holder and the Company shall not be required to issue or deliver any such certificate unless and until the person or persons requesting the issue thereof shall have paid to the Company the amount of such tax or shall have established to
the satisfaction of the Company that such tax has been paid. 
  

 10 

 8. Loss or Mutilation of Warrant. Upon receipt of evidence reasonably satisfactory to the Company
of the loss, theft, destruction, or mutilation of any Warrant (and upon surrender of any Warrant if mutilated), and upon reimbursement of the Company’s reasonable incidental expenses and delivery of an undertaking to indemnify the Company
against losses, the Company shall execute and deliver to the Holder thereof a new Warrant of like date, tenor, and denomination. 
  
 9. No Rights as a Stockholder. The Holder of any Warrant shall not have, solely on account of such status, any rights of a stockholder of the
Company, either at law or in equity, or to any notice of meetings of stockholders or of any other proceedings of the Company, except as provided in this Warrant. 
  
 10. Governing Law. This Warrant shall be construed in accordance with the laws of the State of California applicable
to contracts made and performed within such State, without regard to principles of conflicts of law. 
  
 11. Redemption of Warrants. 
  
 (a) The Warrants will be redeemable at the option of the Company, in whole or in part (a “Warrant Redemption”), from and
after the time that the closing price of the Common Stock on each Trading Day occurring during for any period of 10 consecutive Trading Days (a “Warrant Redemption Period”) equals or exceeds 200% of the Current Market Price as of
the Closing Date (as defined in the Purchase Agreement); provided, however, that each Optional Redemption Condition (as defined in the Certificate of Designations, but with references therein to “Optional Redemption Period” changed
to “Warrant Redemption Period”) must be satisfied during the Warrant Redemption Period and at all times thereafter through the date on which such Warrants are redeemed (the “Warrant Redemption Date”). The redemption price
will be equal to $0.25 per Warrant (the “Warrant Redemption Price”), payable in cash. 
  
 (b) The Corporation shall deliver, in accordance with the notice delivery provisions of the Purchase Agreement, notice of a Warrant
Redemption (a “Warrant Redemption Notice”) to each Holder, not less than 30 nor more than 60 days prior to the date fixed in such notice as the Warrant Redemption Date. Such notice shall state (i) that the Company has elected to
redeem all or a portion of the Warrants, as specified in such notice, (ii) the Warrant Redemption Price, (iii) the Warrant Redemption Date, and (iv) any other information required by applicable law to be included therein. A Warrant Redemption
Notice, once delivered by the Company, shall be irrevocable unless the Company ceases to satisfy all of the Optional Redemption Conditions at any time after delivering such notice, in which case such notice shall be deemed revoked. On or after the
Warrant Redemption Date, (i) the Holder shall deliver this Warrant to the Company at the place designated in the Warrant Redemption Notice and, immediately upon such delivery, the Company shall pay the Warrant Redemption Price to the Holder by wire
transfer of immediately available funds to such account as the Holder shall designate in writing prior to the Warrant Redemption Date. In case less than all the Warrants represented by this Warrant are redeemed, a new Warrant shall be issued to the
Holder representing the unredeemed Warrants. 
  

 11 

 (c) If a Warrant Redemption Notice has been given pursuant to this Section 11, and the
Holder shall, prior to the close of business on the Warrant Redemption Date, provide the Company with a Notice of Exercise pursuant to Section 2 above with respect to the exercise of any or all of the Warrants to be redeemed, then such redemption
shall not become effective as to such Warrants to be exercised, and such exercise shall become effective as provided in Section 2 above. 
  
 (d) In every case of redemption of less than all of the outstanding Warrants issued pursuant to the Purchase Agreement, the Warrants to be
redeemed shall be selected pro rata based on the number of Warrants then owned by each Holder . 
  
 Dated: May     , 2005 
  

			
	PATH 1 NETWORK TECHNOLOGIES INC.
		
	By:	 	 
	 	 	 John R. Zavoli,

	 	 	 President & CEO

  

 12 

  
 FORM OF ASSIGNMENT

  
 (To be executed by the registered holder if such holder desires to transfer
the attached Warrant.) 
  
 FOR VALUE RECEIVED,
                                       
  hereby sells, assigns, and transfers unto                      a Warrant to purchase
                     shares of Common Stock, par value $0.001 per share, of Path 1 Network Technologies Inc. (the “Company”),
together with all right, title, and interest therein, and does hereby irrevocably constitute and appoint
                                        
attorney to transfer such Warrant on the books of the Company, with full power of substitution. 
  

			
	Dated:	 	 
		
	By:	 	 
	 	 	 Signature

  
 The signature on
the foregoing Assignment must correspond to the name as written upon the face of this Warrant in every particular, without alteration or enlargement or any change whatsoever. 
  

	To:	Path 1 Network Technologies Inc. 

	    	6215 Ferris Square 

	    	Suite 140 

	    	San Diego, California 92121 

	    	Attention: President 

  
 NOTICE OF EXERCISE 
  
 The undersigned hereby exercises his or its rights to purchase              Warrant Shares covered by the within Warrant and tenders payment herewith in the amount of
$             by [tendering cash or delivering a certified check or bank cashier’s check, payable to the order of the Company] [surrendering
             shares of Common Stock received upon exercise of the attached Warrant, which shares have a Current Market Price equal to such payment] in accordance with the terms
thereof, and requests that certificates for such securities be issued in the name of, and delivered to: 
  

  

  

  
 (Print Name, Address and Social Security 
 or Tax Identification Number) 
  
 and, if such number of Warrant Shares shall not be all the Warrant Shares covered by the within Warrant, that a new Warrant for the balance of the Warrant Shares covered
by the within Warrant be registered in the name of, and delivered to, the undersigned at the address stated below. 
  

			
	Dated:	 	 
		
	By:	 	 
	 	 	 Print Name

	
	 
	 	 	 Signature

  
 Address:

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