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EXHIBIT 10.1
 
EXHIBIT  A

PROCERA NETWORKS, INC.

SUBSCRIPTION AGREEMENT

Restricted Common Stock at $0.40 per Share

1.Subscription:

(a)The undersigned (individually and/or collectively, the “Participant”) hereby
applies to purchase shares of restricted common stock (the "Shares" or the
“Common Stock”) of Procera Networks, Inc., a Nevada corporation (the “Company”),
in accordance with the terms and conditions of this Subscription Agreement (the
“Subscription”) and the Confidential Private Placement Memorandum, dated April
9, 2009, to which this Subscription is attached (the “Memorandum”).

(b)Before this Subscription is considered, the Participant must complete,
execute and deliver to the Company the following:

(i)           This Subscription;

(ii)          The Certificate of Accredited Investor Status, attached to the
this Subscription Agreement as Exhibit 1 and to the PPM as Exhibit B; and

(iii)         The Participant’s check in the amount of $ _____________ in
exchange for _____________ Shares purchased (at a price per share of $0.40) net
to the Company, or wire transfer sent according to the Company’s instructions:

(c)This Subscription is irrevocable by the Participant.

(d)This Subscription is not transferable or assignable by the Participant.

(e)This Subscription may be rejected in whole or in part by the Company in its
sole discretion.  In the event this Subscription is rejected by the Company, all
funds and documents tendered by the Participant shall be returned.

(f)[this section intentionally omitted]

(g)This Offering, as defined in the Memorandum, is scheduled to close no later
than April 30, 2009 at 5:00 P.M. Pacific Standard Time (the “Closing Date”),
provided, however, that the Company, at its sole election, may extend this
Offering up to an additional sixty days.  The Target Offering is for up to
6,250,000 Shares ($2,500,000) and an additional over-allotment at the Company’s
discretion of up to 5,000,000 Shares ($2,000,000), but this Offering has no
prescribed minimum amount and the Company may accept lessor amounts from
investors and/or have multiple closings of this Offering.

 
 

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(h)Participant hereby agrees not to, and will cause its affiliates not to, enter
into any “put equivalent position” as such term is defined in Rule 16a-1 under
the Securities Exchange Act of 1934, as amended, or short sale position with
respect to the Common Stock.

2.Representations by Participant.  In consideration of the Company’s acceptance
of the Subscription, Participant makes the following representations and
warranties to the Company and to its principals, jointly and severally, which
warranties and representations shall survive any acceptance of the Subscription
by the Company:

(a)Prior to the time of purchase of any Shares, Participant received a copy of
the Memorandum.  Participant has reviewed the Memorandum and the Company’s
filings with the Securities and Exchange Commission (the “Public
Information”).  Participant has had the opportunity to ask questions and receive
any additional information from persons acting on behalf of the Company to
verify Participant’s understanding of the terms thereof and of the Company’s
business and status thereof. Participant acknowledges that no officer, director,
broker-dealer, placement agent, finder or other person affiliated with the
Company has given Participant any information or made any representations, oral
or written, other than as provided in the Memorandum and the Public Information,
on which Participant has relied upon in deciding to invest in the Shares,
including without limitation, any information with respect to current or future
operations of the Company or the economic returns which may accrue as a result
of the purchase of the Shares.

(b)Participant acknowledges that Participant has not seen, received, been
presented with, or been solicited by any leaflet, public promotional meeting,
newspaper or magazine article or advertisement, radio or television
advertisement, or any other form of advertising or general solicitation with
respect to the Shares.

(c)The Shares are being purchased for Participant’s own account for long-term
investment and not with a view to immediately re-sell the Shares.  No other
person or entity will have any direct or indirect beneficial interest in, or
right to, the Shares.  Participant or its agents or investment advisors have
such knowledge and experience in financial and business matters that will enable
Participant to utilize the information made available to it in connection with
the purchase of the Shares to evaluate the merits and risks thereof and to make
an informed investment decision.

(d)Participant acknowledges that the Shares have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), or qualified under
the California Securities Law, or any other applicable blue sky laws, in
reliance, in part, on Participant’s representations, warranties and agreements
made herein.

(e)Participant represents, warrants and agrees that the Company and the officers
of the Company (the “Company’s Officers”) are under no obligation to register or
qualify the Shares under the Securities Act or under any state securities law,
or to assist the undersigned in complying with any exemption from registration
and qualification.

 
 

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(f)Participant represents that Participant meets the criteria for participation
because: (i) Participant has a preexisting personal or business relationship
with the Company or one or more of its partners, officers, directors or
controlling persons; or (ii) by reason of Participant’s business or financial
experience, or by reason of the business or financial experience of its
financial advisors who are unaffiliated with, and are not compensated, directly
or indirectly, by the Company or any affiliate or selling agent of the Company,
Participant is capable of evaluating the risk and merits of an investment in the
Shares and of protecting its own interests;

(g)Participant represents that Participant is an “accredited investor” within
the meaning of Rule 501 of Regulation D under the Securities Act and Participant
has executed the Certificate of Accredited Investor Status, attached hereto as
Exhibit 1.

(h)Participant understands that the Shares are illiquid and will not be
registered under the Securities Act, and until an exemption from registration
becomes available, cannot be readily sold as there will not be a public market
for them, and that Participant may not be able to sell or dispose of the Shares,
or to utilize the Shares as collateral for a loan.  Participant must not
purchase the Shares unless Participant has liquid assets sufficient to assure
Participant that such purchase, and/or the loss of Participant’s entire
investment in the Shares will cause Participant no undue financial difficulties,
and that Participant can still provide for current and possible personal
contingencies, and that the commitment herein for the Shares, combined with
other investments of Participant, is reasonable in relation to Participant’s net
worth.

(i)Participant understands that the right to transfer the Shares will be
restricted unless the transfer is not in violation of the Securities Act, the
California Securities Law, and any other applicable state securities laws
(including investment suitability standards), that the Company will not consent
to a transfer of the Shares unless the transferee represents that such
transferee meets the financial suitability standards required of an initial
participant, and that the Company has the right, in its absolute discretion, to
refuse to consent to such transfer.

(j)Participant has been advised to consult with its own attorney or attorneys
regarding all legal matters concerning an investment in the Company and the tax
consequences of purchasing the Shares, and have done so, to the extent
Participant considers appropriate and/or necessary.

(k)Participant acknowledges that the tax consequences of investing in the
Company will depend on particular circumstances, and neither the Company, the
Company’s Officers, any other investors, nor the partners, shareholders,
members, managers, agents, officers, directors, employees, affiliates or
consultants of any of them, will be responsible or liable for the tax
consequences to Participant of an investment in the Company.  Participant will
look solely to and rely upon its own advisers with respect to the tax
consequences of this investment

(l)All information which Participant has provided to the Company concerning
Participant, Participant’s financial position and Participant’s knowledge of
financial and business matters, and any information found in the Certificate of
Accredited Investor Status, is truthful, accurate, correct, and complete as of
the date set forth herein and therein.

 
 

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(m)Each Participant hereby: (i) acknowledges that it has received all the
information it has requested from the Company and that Participant considers
necessary or appropriate for deciding whether to acquire the Shares, (ii)
represents that Participant has had an opportunity to ask questions and receive
answers from the Company regarding the terms and conditions of the offering of
the Shares and to obtain any additional information necessary to verify the
accuracy of the information given the Participant and (iii) further represents
that Participant has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risk of this investment.

(n)Each certificate or instrument representing securities issuable pursuant to
this Agreement will be endorsed with the following legend:

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED
OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT COVERING SUCH SECURITIES, THE TRANSFER IS MADE IN COMPLIANCE WITH RULE 144
PROMULGATED UNDER SUCH ACT OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE
HOLDER OF THESE SECURITIES WHICH IS REASONABLY SATISFACTORY TO THE COMPANY,
STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.

3.Representations and Warranties by the Company.  The Company represents and
warrants that:

(a)Due Incorporation.  The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada and has the
requisite corporate power to own its properties and to carry on its business as
now being conducted.  The Company is duly qualified as a foreign corporation to
do business and is in good standing in each jurisdiction where the nature of the
business conducted or property owned by it makes such qualification necessary,
other than those jurisdictions in which the failure to so qualify would not have
a material adverse effect on the business, operations or financial condition of
the Company.

(b)Outstanding Stock.  All issued and outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable.

(c)Authority; Enforceability.  This Subscription has been duly authorized,
executed, and delivered by the Company and is a valid and binding agreement,
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium, and similar laws of general
applicability relating to or affecting creditors' rights generally and to
general principles of equity; and the Company has full corporate power and
authority necessary to enter into this Subscription Agreement and to perform its
obligations hereunder and under all other agreements entered into by the Company
relating hereto.

 
 

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(d)Consents.  No consent, approval, authorization, or order of any court,
governmental agency or body or arbitrator having jurisdiction over the Company,
the National Association of Securities Dealers, Inc., the NYSE  AMEX LLC (the
“AMEX”), nor the Company's stockholders is required for execution of this
Subscription, and all other agreements entered into by the Company relating
thereto, including, without limitation, the issuance and sale of the Shares, and
the performance of the Company's obligations hereunder and under all such other
agreements, provided however that the approval of the AMEX will be required
prior to the issuance of the Shares.

(e)The Shares.  The Shares upon issuance:

(i)          are, or will be, free and clear of any security interests, liens,
claims or other encumbrances, subject to restrictions upon transfer under the
Securities Act and any applicable state securities laws;

(ii)         have been, or will be, duly and validly authorized and on the date
of issuance, fully paid and nonassessable;

(iii)        will not have been issued or sold in violation of any preemptive or
other similar rights of the holders of any securities of the Company; and

(iv)        will not subject the holders thereof to personal liability solely by
reason of being such holders.

(f)Litigation.  There is no pending or, to the best knowledge of the Company,
threatened action, suit, proceeding, or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over the Company
that would affect the execution by the Company or the performance by the Company
of its obligations under this Subscription, and all other agreements entered
into by the Company relating hereto.  There is no pending or, to the best
knowledge of the Company, threatened action, suit, proceeding or investigation
before any court, governmental agency or body, or arbitrator having jurisdiction
over the Company, which litigation, if adversely determined, could have a
material adverse effect on the Company.

(g)Reporting Company.  The Company is a publicly held company subject to
reporting obligations pursuant to Sections 15(d) and 13 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and has a class of common
shares registered pursuant to Section 12(g) of the Exchange Act.

(h)No General Solicitation.  Neither the Company, nor any of its affiliates, nor
to its knowledge, any person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the Securities Act) in connection with the offer or sale of
the Shares.

(i)Listing.  The Company's common stock is listed for trading on the AMEX
Board.  The Company has not received any oral or written notice that its common
stock will be delisted from the AMEX nor that its common stock does not meet all
requirements for the continuation of such quotation and the Company currently
satisfies the requirements for the continued listing of its common stock on the
AMEX.

 
 

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4.Agreement to Indemnify Company.  Participant hereby agrees to indemnify and
hold harmless the Company, its principals, the Company’s officers, directors
attorneys, and agents, from any and all damages, costs and expenses (including
actual attorneys’ fees) which they may incur: (i) by reason of Participant’s
failure to fulfill any of the terms and conditions of this Subscription; (ii) by
reason of Participant’s breach of any of representations, warranties or
agreements contained herein (including the Certificate of Accredited Investor
Status); or (iii) with respect to any and all claims made by or involving any
person, other than Participant personally, claiming any interest, right, title,
power, or authority in respect to the Shares.  Participant further agrees and
acknowledges that these indemnifications shall survive any sale or transfer, or
attempted sale or transfer, of any portion of the Shares.

5.Subscription Binding on Heirs, etc.  This Subscription, upon acceptance by the
Company, shall be binding upon the heirs, executors, administrators, successors
and assigns of the Participant.  If the undersigned is more than one person, the
obligations of the undersigned shall be joint and several and the
representations and warranties shall be deemed to be made by and be binding on
each such person and his or her heirs, executors, administrators, successors,
and assigns.

6.Execution Authorized.  If this Subscription is executed on behalf of a
corporation, partnership, trust or other entity, the undersigned has been duly
authorized and empowered to legally represent such entity and to execute this
Subscription and all other instruments in connection with the Shares and the
signature of the person is binding upon such entity.

7.Adoption of Terms and Provisions.  The Participant hereby adopts, accepts and
agrees to be bound by all the terms and provisions hereof.

8.Governing Law.  This Subscription shall be construed in accordance with the
laws of the State of California as applied to agreements among California
residents, made and to be performed entirely within the State of California,
without giving effect to conflicts of laws principles.

9.General.  If a court of competent jurisdiction finds any provision of this
Subscription unenforceable, the parties agree to replace the offending provision
with an enforceable provision that most nearly achieves the intent and economic
effect of the unenforceable provision and all other terms shall remain in full
force and effect.  Except as otherwise expressly provided herein, the provisions
of this Subscription are for the benefit of the parties hereto and not for any
other person or entity.  This Subscription shall not provide any non-party with
any remedy, claim, liability, reimbursement, claim of action or other right in
excess of those existing without reference hereto. The titles and subtitles used
in this Subscription are used for convenience only and are not to be considered
in construing or interpreting this Subscription.  This Subscription is the
result of negotiations among, and has been received by, Participant and the
Company and their respective counsel.  Accordingly, this Subscription shall be
deemed to be the product of all parties hereto, and no ambiguity shall be
construed in favor of or against either party.  This Subscription may be
executed in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. This
Subscription, including the Exhibits, may only be amended or modified in a
writing signed by both parties.  The Company and each Participant shall each
bear its respective expenses and legal fees incurred with respect to this
Agreement and the transactions contemplated herein.  This Subscription is the
full and entire understanding and agreement between the parties and supersedes
all prior agreements and other communications between the parties, oral and
written, with regard to the subjects hereof and no party shall be liable or
bound to any other party in any manner by any representations, warranties,
covenants and agreements except as specifically set forth herein.

 
 

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10.Investor Information: (This must be consistent with the form of ownership
selected below and the information provided in the Certificate of Accredited
Investor Status (Exhibit 1, included herewith.)

Name (please print): ______________________________________________________

Person is domiciled (for tax purposes) in the following country:  USA

Social Security or Taxpayer I.D. Number:

Business Address (including zip code):

Business Phone:

Residence Address (including zip code and country):

 
Residence Phone:

Email:  __________________________________________________________

All communications to be sent to:

Business or Residence Address

Number of Shares subscribed for at $0.40 per share:
_____________________________

Total Subscription Amount: $ _______________________________________________

 
 

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Please indicate below the form in which you will hold title to your interest in
the Shares.  PLEASE CONSIDER CAREFULLY.  ONCE YOUR SUBSCRIPTION IS ACCEPTED, A
CHANGE IN THE FORM OF TITLE CONSTITUTES A TRANSFER OF THE INTEREST IN THE SHARES
AND MAY THEREFORE BE RESTRICTED BY THE TERMS OF THIS SUBSCRIPTION, MAY HAVE TAX
CONSEQUENCES, AND/OR MAY RESULT IN ADDITIONAL COSTS TO YOU.  Participants should
seek the advice of their attorneys in deciding in which of the forms they should
take ownership of the interest in the Shares, because different forms of
ownership can have varying gift tax, estate tax, income tax, and other
consequences, depending on the state of the Participant’s domicile and
Participant’s particular personal circumstances.

INDIVIDUAL OWNERSHIP (one signature required)

JOINT TENANTS WITH RIGHT OF SURVIVORSHIP AND NOT AS TENANTS IN COMMON (both or
all parties must sign)

COMMUNITY PROPERTY (one signature required if interest held in one name, i.e.,
managing spouse; two signatures required if interest held in both names)

TENANTS IN COMMON (both or all parties must sign)

GENERAL PARTNERSHIP (fill out all documents in the name of the PARTNERSHIP, by a
PARTNER authorized to sign)

LIMITED PARTNERSHIP (fill out all documents in the name of the LIMITED
PARTNERSHIP, by a GENERAL PARTNER authorized to sign)

LIMITED LIABILITY COMPANY (fill out all documents in the name of the LIMITED
LIABILITY COMPANY, by a member authorized to sign)

CORPORATION (fill out all documents in the name of the CORPORATION, by the
President or other officer authorized to sign)

TRUST (fill out all documents in the name of the TRUST, by the Trustee, and
include a copy of the instrument creating the trust and any other documents
necessary to show the investment by the Trustee is authorized.  The date of the
trust must appear on the Notarial where indicated.)

 
 

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Subject to acceptance by the Company, the undersigned has completed this
Subscription Agreement to evidence his/her subscription for participation in the
Shares of the Company, this _______ day of April, 2009, at
_________________________.

PARTICIPANT

(Signature)

 
[name]

The Company has accepted this subscription this _____ day of ____________, 2009.

 
“COMPANY”
     
PROCERA NETWORKS, INC.,
 
a Nevada corporation

By:           
James Brear, CEO

Address for notice:

Procera Networks, Inc.
100-C Cooper Court
Los Gatos, CA  95032
Attn: James Brear

 
 

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Exhibit 1
To The Subscription Agreement

CERTIFICATE OF ACCREDITED INVESTOR STATUS

Except as may be indicated by the undersigned below, the undersigned is an
“accredited investor,” as that term is defined in Regulation D under the
Securities Act of 1933, as amended (the “Securities Act”).  The undersigned has
initialed the box below indicating the basis on which he or she is representing
his or her status as an “accredited investor”:

____
a bank as defined in Section 3(a)(2) of the Securities Act, or any savings and
loan association or other institution as defined in Section 3(a)(5)(A) of the
Securities Act whether acting in its individual or fiduciary capacity; a broker
or dealer registered pursuant to Section 15 of the Securities Exchange Act of
1934, as amended (the “Securities Exchange Act”); an insurance company as
defined in Section 2(13) of the Securities Act; an investment company registered
under the Investment Company Act of 1940 or a business development company as
defined in Section 2(a)(48) of that Act; a small business investment company
licensed by the U.S. Small Business Administration under Section 301(c) or (d)
of the Small Business Investment Act of 1958; a plan established and maintained
by a state, its political subdivisions, or any agency or instrumentality of a
state or its political subdivisions, for the benefit of its employees, and such
plan has total assets in excess of $5,000,000; an employee benefit plan within
the meaning of the Employee Retirement Income Security Act of 1974, if the
investment decision is made by a plan fiduciary, as defined in Section 3(21) of
such Act, which is either a bank, savings and loan association, insurance
company, or registered investment adviser, or if the employee benefit plan has
total assets in excess of $5,000,000 or, if a self-directed plan, with
investment decisions made solely by persons that are “accredited investors”;

____
a private business development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940;

____
an organization described in Section 501(c)(3) of the Internal Revenue Code,
corporation, Massachusetts or similar business trust, or partnership, not formed
for the specific purpose of acquiring the securities offered, with total assets
in excess of $5,000,000;

____
a natural person whose individual net worth, or joint net worth with the
undersigned’s spouse, at the time of this purchase exceeds $1,000,000;

 
 

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____
a natural person who had an individual income in excess of $200,000 in each of
the two most recent years or joint income with the undersigned’s spouse in
excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year;

____
a trust with total assets in excess of $5,000,000, not formed for the specific
purpose of acquiring the securities offered, whose purchase is directed by a
person who has such knowledge and experience in financial and business matters
that he is capable of evaluating the merits and risks of the prospective
investment;

____
an entity in which all of the equity holders are “accredited investors” by
virtue of their meeting one or more of the above standards; or

____
an individual who is a director or executive officer of Procera Networks, Inc.

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Accredited
Investor Status effective as of __________________, 2009.

(signature)

[name]

 

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