ex4_1.htm


    
      

    

    Exhibit
4.1

     

    THIS
WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY
STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE OPINION
OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE
SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM
REGISTRATION.

     

    WARRANT
TO PURCHASE STOCK

     

    
      	
              Company:

            	
              PROCERA
      NETWORKS, INC., a Nevada
corporation

            


    

    
      	
              Number
      of Shares:

            	
              500,000

            


    

    
      	
              Class
      of Stock:

            	
              Common

            


    

    
      	
              Warrant
      Price:

            	
              $.40
      per share

            


    

    
      	
              Issue
      Date:

            	
              December
      10, 2009

            


    

    
      	
              Expiration
      Date:

            	
              The
      seventh (7th)
      anniversary after the Issue Date

            


    

    
      	
              Credit
      Facility:

            	
              This
      Warrant is issued in connection with the Advances referenced in the Loan
      and Security Agreement, dated of even date herewith, between Company and
      Silicon Valley Bank (as the same may from time to time be amended,
      modified, supplemented or restated, the “Loan
      Agreement”)

            


    

    


    THIS
WARRANT CERTIFIES THAT, for good and valuable consideration, SILICON VALLEY BANK
(Silicon Valley Bank, together with any registered holder from time to time of
this Warrant or any holder of the shares issuable or issued upon exercise of
this Warrant, “Holder”) is entitled to purchase the number of fully paid and
nonassessable shares of the class of securities (the “Shares”) of the Company at
the Warrant Price, all as set forth above and as adjusted pursuant to Article 2
of this Warrant, subject to the provisions and upon the terms and conditions set
forth in this Warrant.

     

    ARTICLE
1

    EXERCISE

     

    1.1           Method of
Exercise.  Holder may exercise this Warrant by delivering a
duly executed Notice of Exercise in substantially the form attached as Appendix
1 to the principal office of the Company.  Unless Holder is exercising
the conversion right set forth in Article 1.2, Holder shall also deliver to the
Company a check, wire transfer (to an account designated by the Company), or
other form of payment acceptable to the Company for the aggregate Warrant Price
for the Shares being purchased.

     

    1.2           Conversion
Right.  In lieu of exercising this Warrant as specified in
Article 1.1, Holder may from time to time convert this Warrant, in whole or in
part, into a number of Shares determined by dividing (a) the aggregate fair
market value of the Shares or other securities otherwise issuable upon exercise
of this Warrant minus the aggregate Warrant Price of such Shares by (b) the fair
market value of one Share.  The fair market value of the Shares shall
be determined pursuant to Article 1.3.

     

    1.3           Fair Market
Value.  If the Company’s common stock is traded in a public
market and the Shares are common stock, the fair market value of each Share
shall be the closing price of a Share reported for the business day immediately
before Holder delivers its Notice of Exercise to the Company (or in the instance
where the Warrant is exercised immediately prior to the effectiveness of the
Company’s initial public offering, the “price to public” per share price
specified in the final prospectus relating to such offering).  If the
Company’s common stock is traded in a public market and the Shares are preferred
stock, the fair market value of a Share shall be the closing price of a share of
the Company’s common stock reported for the business day immediately before
Holder delivers its Notice of Exercise to the Company (or, in the instance where
the Warrant is exercised immediately prior to the effectiveness of the Company’s
initial public offering, the initial “price to public” per share price specified
in the final prospectus relating to such offering), in both cases,
multiplied  by the number of shares of the Company’s common stock into
which a Share is convertible.  If the Company’s common stock is not
traded in a public market, the Board of Directors of the Company shall determine
fair market value in its reasonable good faith judgment.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    1.4           Delivery of Certificate and
New Warrant.  Promptly after Holder exercises or converts this
Warrant and, if applicable, the Company receives payment of the aggregate
Warrant Price, the Company shall deliver to Holder certificates for the Shares
acquired and, if this Warrant has not been fully exercised or converted and has
not expired, a new Warrant representing the Shares not so acquired.

     

    1.5           Replacement of
Warrants.  On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant and,
in the case of loss, theft or destruction, on delivery of an indemnity agreement
reasonably satisfactory in form and amount to the Company or, in the case of
mutilation or surrender and cancellation of this Warrant, the Company shall
execute and deliver, in lieu of this Warrant, a new warrant of like
tenor.

     

    1.6           Treatment of Warrant Upon
Acquisition of Company.

     

    1.6.1        “Acquisition”.  For
the purpose of this Warrant, “Acquisition” means any sale, license, or other
disposition of all or substantially all of the assets of the Company, or any
reorganization, consolidation, or merger of the Company where the holders of the
Company’s securities before the transaction beneficially own less than 50% of
the outstanding voting securities of the surviving entity after the
transaction.

     

    1.6.2        Treatment of Warrant at
Acquisition.

     

    (A)          Upon
the written request of the Company, Holder agrees that, in the event of an
Acquisition that is not an asset sale and in which the sole consideration is
cash, either (c) Holder shall exercise its conversion or purchase right under
this Warrant and such exercise will be deemed effective immediately prior to the
consummation of such Acquisition or (d) if Holder elects not to exercise the
Warrant, this Warrant will expire upon the consummation of such
Acquisition.  The Company shall provide Holder with written notice of
its request relating to the foregoing (together with such reasonable information
as Holder may request in connection with such contemplated Acquisition giving
rise to such notice), which is to be delivered to Holder not less than ten (10)
days prior to the closing of the proposed Acquisition.

     

    (B)      
    Upon the written request of the Company, Holder agrees
that, in the event of an Acquisition that is an “arms length” sale of all or
substantially all of the Company’s assets (and only its assets) to a third party
that is not an Affiliate (as defined below) of the Company (a “True Asset
Sale”), either (e) Holder shall exercise its conversion or purchase right under
this Warrant and such exercise will be deemed effective immediately prior to the
consummation of such Acquisition or (f) if Holder elects not to exercise the
Warrant, this Warrant will continue until the Expiration Date if the Company
continues as a going concern following the closing of any such True Asset
Sale.  The Company shall provide Holder with written notice of its
request relating to the foregoing (together with such reasonable information as
Holder may request in connection with such contemplated Acquisition giving rise
to such notice), which is to be delivered to Holder not less than ten (10) days
prior to the closing of the proposed Acquisition.

     

    
      
         


      

      
        2

        
          

        

      

      
         


      

    


    (C)           Upon
the closing of any Acquisition other than those particularly described in
subsections (A) and (B) above, the successor entity shall assume the obligations
of this Warrant, and this Warrant shall be exercisable for the same securities,
cash, and property as would be payable for the Shares issuable upon exercise of
the unexercised portion of this Warrant as if such Shares were outstanding on
the record date for the Acquisition and subsequent closing.  The
Warrant Price and/or number of Shares shall be adjusted
accordingly.

     

    As used
herein “Affiliate” shall mean any person or entity that owns or controls
directly or indirectly ten (10) percent or more of the stock of Company, any
person or entity that controls or is controlled by or is under common control
with such persons or entities, and each of such person’s or entity’s officers,
directors, joint venturers or partners, as applicable.

     

    ARTICLE
2

    ADJUSTMENTS TO THE
SHARES

     

    2.1           Stock Dividends, Splits,
Etc.  If the Company declares or pays a dividend on the Shares
payable in common stock, or other securities, then upon exercise of this
Warrant, for each Share acquired, Holder shall receive, without cost to Holder,
the total number and kind of securities to which Holder would have been entitled
had Holder owned the Shares of record as of the date the dividend
occurred.  If the Company subdivides the Shares by reclassification or
otherwise into a greater number of shares or takes any other action which
increases the amount of stock into which the Shares are convertible, the number
of shares purchasable hereunder shall be proportionately increased and the
Warrant Price shall be proportionately decreased.  If the outstanding
shares are combined or consolidated, by reclassification or otherwise, into a
lesser number of shares, the Warrant Price shall be proportionately increased
and the number of Shares shall be proportionately decreased.

     

    2.2           Reclassification, Exchange,
Combinations or Substitution.  Upon any reclassification,
exchange, substitution, or other event that results in a change of the number
and/or class of the securities issuable upon exercise or conversion of this
Warrant, Holder shall be entitled to receive, upon exercise or conversion of
this Warrant, the number and kind of securities and property that Holder would
have received for the Shares if this Warrant had been exercised immediately
before such reclassification, exchange, substitution, or other
event.  Such an event shall include any automatic conversion of the
outstanding or issuable securities of the Company of the same class or series as
the Shares to common stock pursuant to the terms of the Company’s Articles or
Certificate (as applicable) of Incorporation upon the closing of a registered
public offering of the Company’s common stock.  The Company or its
successor shall promptly issue to Holder an amendment to this Warrant setting
forth the number and kind of such new securities or other property issuable upon
exercise or conversion of this Warrant as a result of such reclassification,
exchange, substitution or other event that results in a change of the number
and/or class of securities issuable upon exercise or conversion of this
Warrant.  The amendment to this Warrant shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article 2 including, without limitation, adjustments to the
Warrant Price and to the number of securities or property issuable upon exercise
of the new Warrant.  The provisions of this Article 2.2 shall
similarly apply to successive reclassifications, exchanges, substitutions, or
other events.

     

    
      
         


      

      
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    2.3           Certain
Adjustments.  The Warrant Price and number of Shares issuable
upon exercise of this Warrant are subject to adjustment from time to time as set
forth in this Section 2.3.  Upon each such adjustment of the Warrant
Price pursuant to this Section 2.3, the Holder shall thereafter prior to the
Expiration Date be entitled to purchase, at the Warrant Price resulting from
such adjustment, the number of Shares obtained by multiplying the Warrant Price
in effect immediately prior to such adjustment by the number of Shares issuable
upon exercise of this Warrant immediately prior to such adjustment and dividing
the product thereof by the Warrant Price resulting from such
adjustment.

     

    (a)           If
the Company, at any time while this Warrant is outstanding, (i) shall pay a
stock dividend (except scheduled dividends paid on outstanding preferred stock
as of the date hereof which contain a stated dividend rate) or otherwise make a
distribution or distributions to all the holders of Common Stock or on any other
class of capital stock payable in shares of Common Stock, (ii) subdivide
outstanding shares of Common Stock into a larger number of shares or (iii)
combine outstanding shares of Common Stock into a smaller number of shares, the
Warrant Price shall be multiplied by a fraction of which the numerator shall be
the number of shares of Common Stock (excluding treasury shares, if any)
outstanding before such event and of which the denominator shall be the number
of shares of Common Stock (excluding treasury shares, if any) outstanding after
such event.  In such event, the number of Warrant shares issuable
under this Warrant shall be equitably adjusted to reflect such event (i.e., in
the event of 2:1 stock split of the Common Stock, the number of Warrant shares
shall be increased to twice the number available for purchase prior to the
record date for such stock split).  Any adjustment made pursuant to
this Section shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a
subdivision or combination, and shall apply to successive subdivisions and
combinations.

     

    (b)           In
case of any reclassification of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is converted into other securities,
cash or property, then the Holder shall have the right thereafter to exercise
this Warrant only into the shares of stock and other securities and property
receivable upon or deemed to be held by holders of Common Stock following such
reclassification or share exchange, and the Holder shall be entitled upon such
event to receive such amount of securities or property equal to the amount of
Shares such Holder would have been entitled to had such Holder exercised this
Warrant immediately prior to such reclassification or share
exchange.  The terms of any such reclassification or share exchange
shall include such terms so as to continue to give to the Holder the right to
receive the securities or property set forth in this Section 2.3(b) upon any
exercise following any such reclassification or share exchange.

     

    (c)           For
the purposes of this Section 2.3, the following clauses shall also be
applicable:

     

    (i)            Record
Date.  In case the Company shall take a record of the holders
of its Common Stock for the purpose of entitling them (A) to receive a dividend
or other distribution payable in Common Stock or in securities convertible or
exchangeable into shares of Common Stock, or (B) to subscribe for or purchase
Common Stock or securities convertible or exchangeable into shares of Common
Stock, then such record date shall be deemed to be the date of the issue or sale
of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution or the
date of the granting of such right of subscription or purchase, as the case may
be.

     

    
      
         


      

      
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    (ii)            Treasury
Shares.  The number of shares of Common Stock outstanding at
any given time shall not include shares owned or held by or for the account of
the Company, and the disposition of any such shares shall be considered an issue
or sale of Common Stock.

     

    (d)           All
calculations under this Section 2.3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be.

     

    2.4           No
Impairment.  The Company shall not, by amendment of its
Articles or Certificate (as applicable) of Incorporation or through a
reorganization, transfer of assets, consolidation, merger, dissolution, issue,
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed under
this Warrant by the Company, but shall at all times in good faith assist in
carrying out of all the provisions of this Article 2 and in taking all such
action as may be necessary or appropriate to protect Holder’s rights under this
Article against impairment.

     

    2.5           Fractional
Shares.  No fractional Shares shall be issuable upon exercise
or conversion of this Warrant and the number of Shares to be issued shall be
rounded down to the nearest whole Share.  If a fractional share
interest arises upon any exercise or conversion of the Warrant, the Company
shall eliminate such fractional share interest by paying Holder the amount
computed by multiplying the fractional interest by the fair market value of a
full Share.

     

    2.6           Certificate as to
Adjustments.  Upon each adjustment of the Warrant Price, the
Company shall promptly notify Holder in writing, and, at the Company’s expense,
promptly compute such adjustment, and furnish Holder with a certificate of its
Chief Financial Officer setting forth such adjustment and the facts upon which
such adjustment is based.  The Company shall, upon written request,
furnish Holder a certificate setting forth the Warrant Price in effect upon the
date thereof and the series of adjustments leading to such Warrant
Price.

     

    ARTICLE
3

    REPRESENTATIONS AND
COVENANTS OF THE COMPANY

     

    3.1           Representations and
Warranties.  The Company represents and warrants to Holder as
follows:

     

    (a)           The
initial Warrant Price referenced on the first page of this Warrant is not
greater than the fair market value of the Shares as of the date of this
Warrant.

     

    (b)           All
Shares which may be issued upon the exercise of the purchase right represented
by this Warrant, and all securities, if any, issuable upon conversion of the
Shares, shall, upon issuance, be duly authorized, validly issued, fully paid and
nonassessable, and free of any liens and encumbrances except for restrictions on
transfer provided for herein or under applicable federal and state securities
laws.

     

    3.2           Notice of Certain
Events.  If the Company proposes at any time (g) to declare any
dividend or distribution upon any of its stock, whether in cash, property,
stock, or other securities and whether or not a regular cash dividend; (h) to
offer for sale any shares of the Company’s capital stock (or other securities
convertible into such capital stock), other than (i) pursuant to the Company’s
stock option or other compensatory plans, (ii) in connection with commercial
credit arrangements or equipment financings, or (iii) in connection with
strategic transactions for purposes other than capital raising; (i) to effect
any reclassification or recapitalization of any of its stock; (j) to merge or
consolidate with or into any other corporation, or sell, lease, license, or
convey all or substantially all of its assets, or to liquidate, dissolve or wind
up; or (k) offer holders of registration rights the opportunity to participate
in an underwritten public offering of the Company’s securities for cash, then,
in connection with each such event, the Company shall give Holder: 1. at least
10 days prior written notice of the date on which a record will be taken for
such dividend, distribution, or subscription rights (and specifying the date on
which the holders of common stock will be entitled thereto) or for determining
rights to vote, if any, in respect of the matters referred to in (a) and (b)
above; 2. in the case of the matters referred to in (c) and (d) above at least
10 days prior written notice of the date when the same will take place (and
specifying the date on which the holders of common stock will be entitled to
exchange their common stock for securities or other property deliverable upon
the occurrence of such event); and 3. in the case of the matter referred to in
(e) above, the same notice as is given to the holders of such registration
rights.  Company will also provide information requested by Holder
reasonably necessary to enable Holder to comply with Holder’s accounting or
reporting requirements.

     

    
      
         


      

      
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    3.3           No Shareholder
Rights.  Except as provided in this Warrant, Holder will not
have any rights as a shareholder of the Company until the exercise of this
Warrant.

     

    ARTICLE
4

    REPRESENTATIONS, WARRANTIES
OF HOLDER

     

    Holder
represents and warrants to the Company as follows:

     

    4.1           Purchase for Own
Account.  This Warrant and the securities to be acquired upon
exercise of this Warrant by Holder will be acquired for investment for Holder’s
account, not as a nominee or agent, and not with a view to the public resale or
distribution within the meaning of the Act.  Holder also represents
that Holder has not been formed for the specific purpose of acquiring this
Warrant or the Shares.

     

    4.2           Disclosure of
Information.  Holder has received or has had full access to all
the information it considers necessary or appropriate to make an informed
investment decision with respect to the acquisition of this Warrant and its
underlying securities.  Holder further has had an opportunity to ask
questions and receive answers from the Company regarding the terms and
conditions of the offering of this Warrant and its underlying securities and to
obtain additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to Holder or to which Holder has
access.

     

    4.3           Investment
Experience.  Holder understands that the purchase of this
Warrant and its underlying securities involves substantial
risk.  Holder has experience as an investor in securities of companies
in the development stage and acknowledges that Holder can bear the economic risk
of such Holder’s investment in this Warrant and its underlying securities and
has such knowledge and experience in financial or business matters that Holder
is capable of evaluating the merits and risks of its investment in this Warrant
and its underlying securities and/or has a preexisting personal or business
relationship with the Company and certain of its officers, directors or
controlling persons of a nature and duration that enables Holder to be aware of
the character, business acumen and financial circumstances of such
persons.

     

    
      
         


      

      
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    4.4           Accredited Investor
Status.  Holder is an “accredited investor” within the meaning
of Regulation D promulgated under the Act.

     

    4.5           The
Act.  Holder understands that this Warrant and the Shares
issuable upon exercise or conversion hereof have not been registered under the
Act in reliance upon a specific exemption therefrom, which exemption depends
upon, among other things, the bona fide nature of Holder’s investment intent as
expressed herein.  Holder understands that this Warrant and the Shares
issued upon any exercise or conversion hereof must be held indefinitely unless
subsequently registered under the Act and qualified under applicable state
securities laws, or unless exemption from such registration and qualification
are otherwise available.

     

    ARTICLE
5

    MISCELLANEOUS

     

    5.1           Term.  This
Warrant is exercisable in whole or in part at any time and from time to time on
or before the Expiration Date.

     

    5.2           Legends.  This
Warrant and the Shares (and the securities issuable, directly or indirectly,
upon conversion of the Shares, if any) shall be imprinted with a legend in
substantially the following form:

     

    THIS
WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY
STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE OPINION
OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE
SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM
REGISTRATION.

     

    5.3           Compliance with Securities
Laws on Transfer.  This Warrant and the Shares issuable upon
exercise of this Warrant (and the securities issuable, directly or indirectly,
upon conversion of the Shares, if any) may not be transferred or assigned in
whole or in part without compliance with applicable federal and state securities
laws by the transferor and the transferee (including, without limitation, the
delivery of investment representation letters and legal opinions reasonably
satisfactory to the Company, as reasonably requested by the
Company).  The Company shall not require Silicon Valley Bank (“Bank”) to provide an opinion
of counsel if the transfer is to Bank’s parent company, SVB Financial Group
(formerly Silicon Valley Bancshares), or any other affiliate of
Bank.  Additionally, the Company shall also not require an opinion of
counsel if there is no material question as to the availability of current
information as referenced in Rule 144(c), Holder represents that it has complied
with Rule 144(d) and (e) in reasonable detail, the selling broker represents
that it has complied with Rule 144(f), and the Company is provided with a copy
of Holder’s notice of proposed sale.

     

    
      
         


      

      
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    5.4           Transfer
Procedure.  After receipt by Bank of the executed Warrant, Bank
will transfer all of this Warrant to SVB Financial Group by execution of an
Assignment substantially in the form of Appendix 2.  Subject to the
provisions of Article 5.3 and upon providing the Company with written notice,
SVB Financial Group and any subsequent Holder may transfer all or part of this
Warrant or the Shares issuable upon exercise of this Warrant (or the Shares
issuable directly or indirectly, upon conversion of the Shares, if any) to any
transferee, provided, however, in connection with any such transfer, SVB
Financial Group or any subsequent Holder will give the Company notice of the
portion of the Warrant being transferred with the name, address and taxpayer
identification number of the transferee and Holder will surrender this Warrant
to the Company for reissuance to the transferee(s) (and Holder if
applicable).  The Company may refuse to transfer this Warrant or the
Shares to any person who directly competes with the Company, unless, in either
case, the stock of the Company is publicly traded.

     

    5.5           Notices.  All
notices and other communications from the Company to Holder, or vice versa,
shall be deemed delivered and effective when given personally or mailed by
first-class registered or certified mail, postage prepaid, at such address as
may have been furnished to the Company or Holder, as the case may (or on the
first business day after transmission by facsimile) be, in writing by the
Company or such Holder from time to time.  Effective upon receipt of
the fully executed Warrant and the initial transfer described in Article 5.4
above, all notices to Holder shall be addressed as follows until the Company
receives notice of a change of address in connection with a transfer or
otherwise:

     

    SVB
Financial Group

    Attn:
Treasury Department

    3003
Tasman Drive, HA 200

    Santa
Clara, CA 95054

    Telephone:
408-654-7400

    Facsimile:
408-496-2405

     

    Notice to
the Company shall be addressed as follows until Holder receives notice of a
change in address:

    


    Procera
Networks, Inc.

    100
Cooper Court

    Los
Gatos, California  95032

    Attn:
Charles Constanti, VP and CFO

    Telephone:
(408) 890-7066

    Facsimile:
(408) 354-7279

     

    5.6           Waiver.  This
Warrant and any term hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party against which enforcement
of such change, waiver, discharge or termination is sought.

     

    5.7           Attorneys’
Fees.  In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys’ fees.

     

    5.8           Automatic Conversion upon
Expiration.  In the event that, upon the Expiration Date, the
fair market value of one Share (or other security issuable upon the exercise
hereof) as determined in accordance with Section 1.3 above is greater than the
Warrant Price in effect on such date, then this Warrant shall automatically be
deemed on and as of such date to be converted pursuant to Section 1.2 above as
to all Shares (or such other securities) for which it shall not previously have
been exercised or converted, and the Company shall promptly deliver a
certificate representing the Shares (or such other securities) issued upon such
conversion to Holder.

     

    
      
         


      

      
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    5.9           Counterparts.  This
Warrant may be executed in counterparts, all of which together shall constitute
one and the same agreement.

     

    5.10         Governing
Law.  This Warrant shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
its principles regarding conflicts of law.

     

    [Signature
page follows.]


    
      
         


      

      
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    “COMPANY”

     

    PROCERA
NETWORKS, INC.

     

    
    

     

    
      	By:	  /s/ Charles Constanti	 


    

    Name:
Charles Constanti

    Title:  VP
& CFO

     

    


    “HOLDER”

     

    SILICON
VALLEY BANK

     

    
    

     

    
      	By:	  /s/ Megan Willard	 


    

    Name:
Megan Willard

    Title:
VP


    
      
         


      

      
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    APPENDIX
1

     

    NOTICE OF
EXERCISE

     

    1.        
    Holder elects to purchase ___________ shares of the
Common Stock of Procera Networks, Inc. pursuant to the terms of the attached
Warrant, and tenders payment of the purchase price of the shares in
full.

     

    [or]

     

    1.        
    Holder elects to convert the attached Warrant into
Shares/cash [strike one] in the manner specified in the Warrant.  This
conversion is exercised for _____________________ of the Shares covered by the
Warrant.

     

    [Strike
paragraph that does not apply.]

     

    2.        
    Please issue a certificate or certificates representing
the shares in the name specified below:

     

    
      	 
      	 
      	 
      
	 
      	
                       
      Holders Name

            	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 	 	 
	 
      	
                       
      (Address)

            	 
      


    

     

    3.        
    By its execution below and for the benefit of the
Company, Holder hereby restates each of the representations and warranties in
Article 4 of the Warrant as the date hereof.

     

    
      	 
      	
              HOLDER:

            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 	 	 	 
	 	 	 	 
	 
      	
              By:

            	 
      	 
      
	 	 	 	 
	 
      	
              Name:

            	 
      	 
      
	 	 	 	 
	 
      	
              Title:

            	 
      	 
      
	 	 	 	 
	 
      	
              (Date):
      

            	 
      	 
      


    


    
      
         


      

      
        11

        
          

        

      

      
         


      

    

     

    APPENDIX
2

     

    ASSIGNMENT

     

    For value
received, Silicon Valley Bank hereby sells, assigns and transfers
unto

     

    
      	 
      	
              Name:

            	
              SVB
      Financial Group

            
	 
      	
              Address:

            	
              3003
      Tasman Drive (HA-200)

            
	 
      	
               

            	

              Santa
      Clara, CA 95054

            
	 
      	
              Tax
      ID:

            	
              91-1962278

            


    

     

    that
certain Warrant to Purchase Stock issued by Procera Networks, Inc. (the
“Company”), on December 10, 2009 (the “Warrant”) together with all rights, title
and interest therein.

    


    
      	 
      	 	 
      	
              SILICON
      VALLEY BANK

            
	 
      	 	 
      	 
      	 
      	 
      
	 
      	 	 
      	 
      	 
      	 
      
	 
      	 	 
      	
              By:
      

            	 
      	 
      
	 
      	 	 
      	
              Name:

            	 
      
	 
      	 	 
      	
              Title:

            	 
      
	
              Date:

            	 	 
      	 
      	 
      	 
      


    

    


    


    By its
execution below, and for the benefit of the Company, SVB Financial Group makes
each of the representations and warranties set forth in Article 4 of the Warrant
and agrees to all other provisions of the Warrant as of the date
hereof.

     

    
      	 
      	 	 
      	
              SVB
      FINANCIAL GROUP

            
	 
      	 	 
      	 
      	 
      	 
      
	 
      	 	 
      	 
      	 
      	 
      
	 
      	 	 
      	
              By:
      

            	 
      	 
      
	 
      	 	 
      	
              Name:

            	 
      
	 
      	 	 
      	
              Title:

            	 
      
	
              Date:

            	 	 
      	 
      	 
      	 
      


    

     

     

    12