SETTLEMENT AGREEMENTSettlement Agreement • February 16th, 2006 • Path 1 Network Technologies Inc • Communications equipment, nec • California
This Settlement Agreement is entered into on February 10, 2006 between Castle Creek Technology Partners LLC (“CC”) and Path 1 Network Technologies Inc. (“Path 1”). CC holds 492,307 shares of Path 1’s Series B 7% Convertible Preferred Stock (“Series B Preferred Stock”) and 246,154 Path 1 common stock warrants, acquired pursuant to a Securities Purchase Agreement dated April 26, 2005 among Path 1, CC and others (the “Purchase Agreement”). This Settlement Agreement relates to Path 1’s December 6, 2005 financing transactions (the “Transactions”) with Laurus Master Fund Ltd. (“Laurus”), pursuant to which Path 1 issued to Laurus (i) a Secured Convertible Note in the principal amount of $2,100,000 (the “Laurus Note”), which Note is convertible into shares of Common Stock at a fixed conversion price equal to $2.6316, and (ii) Warrants for the purchase of shares of Common Stock (the “Laurus Warrants”), which Warrants have an exercise price equal to $2.89 per share. Under the Laurus Note Path 1
