Exhibit 10.5


    
      

    

    EXHIBIT
      10.5

    


    


    November
      22, 2005

    Mr.
      Doug
      Glader

    President
      and CEO

    PROCERA
      NETWORKS, INC.

    100
      Cooper Court

    Los
      Gatos, CA 95032

    


    Dear
      Doug, 

    


    This
      letter confirms our agreement that Chadbourn Securities, Inc (“Chadbourn”) will
      act as exclusive financial advisor to Procera Networks, Inc. (“you”
or
      the
“Company”)
      in
      connection with the proposed private placement (an “Offering”) of unregistered
      equity or equity linked securities of the Company (“Securities”). 

    


    Services.
      During
      the term of our engagement, we will advise and assist you in connection with
      the
      planning, execution and closing of the Offering. In connection with the
      planning, execution and closing of an Offering, Chadbourn’s services may
      include, to the extent that you and Chadbourn agree necessary or advisable,
      assisting and advising you with respect to (1) performing valuation analyses,
      (2) identifying potential investors acceptable to you and establishing meetings
      with such persons or entities, (3) coordinating the process by which you will
      select the ultimate investor(s) in the Company, (4) supporting the Company
      in
      its negotiation of the terms and agreements effecting the purchase of
      Securities, and (5) rendering such assistance as the Company may reasonably
      request. The Company is responsible for compliance with all applicable
      securities laws, including the Securities Act of 1933 as well as the preparation
      of appropriate offering materials. 

    


    Any
      written or oral advice provided by us pursuant to this engagement will be
      treated by the Company as confidential, will be solely for the information
      and
      assistance of the Company and its advisors in connection with their
      consideration of a sale of securities and purchase of assets and will not be
      reproduced, summarized, described or referred to, or furnished to any other
      party or used for any other purpose, except in each case with our prior written
      consent or as required by law. 

    


    Confidentiality.
      In
      connection with the Offering, the Company and Chadbourn will provide each other
      with information that is non-public, confidential or proprietary in nature.
      All
      information about the disclosing party furnished by the disclosing party to
      the
      receiving party or its directors, officers, employees, agents or
      representatives, including without limitation attorneys, accountants,
      consultants and financial advisors (collectively, "representatives"), and all
      analyses, compilations, data, studies or other documents prepared by the
      receiving party or its representatives containing, or based in whole or in
      part
      on, any such furnished information is hereinafter referred to as the
      "Confidential Information;” provided; that, Confidential Information shall not
      include information, which is (i) available to the public other than as a result
      of a disclosure in breach of this letter; (ii) becomes available to the
      receiving party on a non-confidential basis from a source other than the
      Company, (iii) known to you the receiving party on a non-confidential basis
      prior to such disclosure or (iv) required to be disclosed as a matter of
      law.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    The
      Company and Chadbourn agree that the Confidential Information will be kept
      confidential by them and their respective representatives and will not be
      disclosed for a period of two years from the date hereof, without the prior
      written consent of the disclosing party. 

    


    Compensation.
      In
      connection with this engagement, you will pay us a cash fee of eight percent
      (8.0%) of
      gross
      proceeds from all sales of Securities sold in the Offering (the “Success
      Fee”).
      As
      additional compensation for our services hereunder, you will upon consummation
      of the Offering issue to Chadbourn a warrant to purchase a number of shares
      of
      common stock of the Company equal to 10% of all shares of Securities sold in
      the
      Offering at an exercise price per share equal to 100% of the price per share
      paid by investors in the Offering. The warrant will be immediately exercisable
      and will contain the same registration rights with respect to the common stock
      of the Company underlying the warrant (or any securities into which the common
      stock of the Company may be converted or for which it may be exchanged) as
      are
      granted to investors in the Offering. The warrant will be exchangeable (so
      that
      shares of the common stock of the Company would be issued upon surrender of
      the
      warrant, without tender of any cash, on a net exercise basis), have a term
      of 5
      years from the date of issuance and have such other terms and conditions as
      shall be mutually agreed upon. Our fees will not be reduced by any obligation
      that you may have to any other broker, finder or placement agent.

    


    Reimbursement.
      In
      addition, you will promptly reimburse us for all of our reasonable legal fees
      and expenses (which shall not exceed $5,000 without your prior consent) and
      for
      our travel and other reasonable out-of-pocket expenses (which shall not exceed
      $2,000 without your prior consent) whether or not there is a closing under
      the
      Offering. These reasonable expenses shall be paid upon receipt by you of an
      invoice from us. 

    


    Term.
      The
      term of our engagement will begin on the date hereof and continue for 12 months.
      However, either of us may terminate our engagement earlier upon 30 days prior
      written notice. Any earlier termination of our engagement will not affect your
      obligation to pay our fees or reimburse our expenses. 

    


    Upon
      termination, we may provide you with a list (the “Investor List”) of all
      potential investors contacted by us. If within 12 months following the
      expiration or earlier termination of our engagement, you sell equity or
      equity-linked securities to any investor in the Offering or any investor on
      the
      Investor List (if provided), you will pay us the Success Fee described under
      “Compensation” above.  

    


    Indemnification.
      Because
      we will be acting on your behalf, you will indemnify us and related persons
      according to the indemnification and contribution provisions in Annex
      A.
      Your
      obligations in Annex
      A
      will
      remain operative regardless of any termination or completion of our services
      hereunder.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Miscellaneous.
      We are
      a full service securities firm and, therefore, we may from time to time effect
      transactions for our own account or for the account of our customers and hold
      positions in securities or options on securities of the Company and other
      companies that may be the subject of our services. This letter agreement will
      not limit or restrict our ability to engage in such transactions with respect
      to
      either the Company’s securities or any other entity’s securities.

    


    We
      will
      provide our financial advice, written or oral, exclusively for the information
      of your Board of Directors and senior management, who will make all decisions
      regarding whether and how to pursue any opportunity or transaction. Your Board
      of Directors and senior management will base their decisions on our advice
      as
      well as on the advice of their legal, tax and other business advisors and other
      factors that they consider appropriate. Accordingly, as an independent
      contractor we will not assume the responsibilities of a fiduciary to you or
      your
      stockholders in connection with the performance of our services. 

    


    This
      letter agreement, together with the attached agreement on indemnification and
      contribution, contains our entire agreement concerning the proposed transaction
      and supersedes any prior understandings and agreements. 

    


    This
      letter agreement will be binding upon and inure to the benefit of you, us,
      each
      Indemnified Person (as defined in Annex
      A)
      and our
      respective successors and assigns and nothing herein is intended to confer
      upon
      any person, other than you, us, each Indemnified Person and our respective
      successors and assigns, any rights, remedies, obligations or
      liabilities.

    


    This
      letter agreement shall be governed by and construed in accordance with the
      laws
      of the state of California.

    


    Any
      dispute arising out of or relating to this letter agreement (including any
      annex) will exclusively be submitted to an arbitrator for binding and conclusive
      resolution. The arbitration will be in Santa Clara County, California and will
      be administered by JAMS. The arbitrator will be a former or retired judge
      selected from a list of those affiliated with JAMS. The arbitrator will have
      the
      authority to permit discovery and to follow the procedures that he or she
      determines to be appropriate. The arbitrator will have no power to award
      consequential (including lost profits), punitive or exemplary damages. The
      parties will advance the forum fees and other costs of the arbitration equally,
      but the arbitrator will have the discretion as part of his or her final award
      to
      apportion some or all of the costs of the arbitration among the parties. The
      arbitrator will also have the discretion to direct, as part of his or her final
      award, that a party recover some or all of its attorneys' fees. You and we
      consent to personal jurisdiction and venue in the federal or state courts
      located in California for purposes of enforcement of any arbitration
      award.

    


    Any
      waiver of any right or obligation hereunder must be in writing signed by the
      party against whom such waiver is sought to be enforced. Any amendment hereto
      must be in writing signed by you and us.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    After
      reviewing this letter agreement, please confirm that it is in accordance with
      your understanding by signing and returning to us the enclosed
      copy.

    


    
      	
              Very
                truly yours,

            	 
	 	 	 
	
              CHADBOURN
                SECURITIES, INC.

            	 
	 	 	 
	 	 	 
	
              By:

            	 	 
	
              Laird
                Q. Cagan

            	 
	
              Managing
                Director

            	 
	 	 	 
	 	 	 
	
              Accepted
                and Agreed as of the date set forth above:

            	 
	 	 	 
	
              PROCERA
                NETWORKS, INC.

            	 
	 	 	 
	 	 	 
	
              By:

            	 	 
	
              Douglas
                J. Glader

            	 
	
              Chairman
                and CEO 

            	 


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Annex
      A

     

    Client
      agrees to indemnify and hold harmless Chadbourn Securities Inc. (“Chadbourn”),
      together with its affiliates and their respective control persons, directors,
      officers, employees and agents, (“Indemnified Persons”), to the full extent
      lawful against any and all claims, losses, damages, liabilities, costs and
      expenses as incurred (including all reasonable fees and disbursements of counsel
      and all reasonable travel and other out-of-pocket expenses reasonably incurred
      in connection with the investigation of, preparation for and defense of any
      pending or threatened claim, action, proceeding or investigation and any
      litigation or other proceeding arising therefrom, to which an Indemnified Person
      may become subject) (collectively, “Damages”) arising out of or related to any
      actual or proposed Private Placement or Chadbourn’s engagement hereunder;
provided,
      however,
      that there shall be excluded from such indemnification any such portion of
      such
      Damages as are found in a final judgment by a court of competent jurisdiction
      to
      have resulted solely from the willful misconduct or gross negligence on the
      part
      of the Indemnified Person, other than any action undertaken at the request
      or
      with the consent of Client. The foregoing indemnification obligation is in
      addition to, and not in limitation of, any other rights Chadbourn may have,
      including but not limited to any right of contribution. In the event that the
      foregoing indemnity is unavailable or insufficient to hold harmless an
      Indemnified Person, then Client shall contribute to amounts paid or payable
      by
      an Indemnified Person in respect of such Damages in such proportion as
      appropriately reflects the relative benefits received by it on the one hand
      and
      Chadbourn on the other. If applicable law does not permit allocation solely
      on
      the basis of benefits, then such contribution shall be made in such proportion
      as appropriately reflects both the relative benefits and relative fault of
      the
      parties and other relevant equitable considerations. The foregoing is subject
      to
      the limitation that in no event shall Chadbourn’s aggregate contributions in
      respect of Damages exceed the amount of fees actually received by Chadbourn
      pursuant to this Agreement. For purposes hereof, relative benefits to Client
      and
      Chadbourn of the Private Placement or other similar transaction shall be deemed
      to be in the same proportion that the total value paid or received or
      contemplated to be paid or received by Client and/or its security holders in
      connection with the Private Placement or other similar transaction bears to
      the
      fees paid to Chadbourn pursuant to its engagement in respect of such Private
      Placement. Chadbourn
      shall promptly notify Client of any claim or threatened claim being asserted
      against Chadbourn which would give rise to an indemnification hereunder, and
      agrees that Client shall have the right to participate in the defense of any
      such claim and, to the extent that Client shall wish, to assume and control
      the
      defense thereof and shall pay as incurred the fees and disbursements of such
      counsel related to such proceeding. In any such proceeding, Chadbourn shall
      have
      the right to retain its own counsel reasonably satisfactory to Client at
      Client’s expense, it being understood that Client shall not, in connection with
      any one such claim or action or separate but, substantially similar or related
      claims or actions in the same jurisdiction arising out of the same general
      allegations or circumstances, be liable for the reasonable fees and expenses
      of
      more than one separate firm of attorneys, for all the Indemnified Persons unless
      the defense of one Indemnified person is unique or separate from that of another
      Indemnified Person subject to the same claim or action. Client will not enter
      into any waiver, release or settlement with respect to any threatened or pending
      claim, action, proceeding or investigation or settle any litigation arising
      therefrom in respect of which indemnification hereunder may be sought (whether
      or not Indemnified Persons are a formal party thereto) without the prior written
      consent of Chadbourn (which consent shall not be unreasonably withheld or
      delayed), unless such waiver, release or settlement includes an unconditional
      release of Chadbourn from any and all liability arising out of such threatened
      or pending claim, action, proceeding, investigation or litigation.