ex10_1.htm


    
      

    


    
      	
              EXHIBIT
                10.1

            	
              Form
                of Subscription Agreement.

            


    

    


    


    PROCERA
      NETWORKS, INC.

    Restricted
      Common Stock at $2.00 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 May 25, 2007, 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 Registration Rights Agreement, attached to the Memorandum as
Exhibit C (the “Rights
      Agreement”);

    


    (iii)           The
      Certificate of Accredited Investor Status, attached to the Memorandum as
Exhibit A; and

    


    (iv)           The
      Participant’s check in the amount of $__________ in exchange for _________
      Shares purchased, 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)         
        The Company’s placement agent, Chadbourn Securities, Inc., and/or
      other advisors, placement agents, broker dealers and/or finders, will be paid
      commissions, fees and other consideration by the Company equal to: (i) Eight
      Percent (8%) of Participant’s investment amount, and (ii) a warrant to purchase
      shares of common stock of the Company equal to Five Percent (5%) of the total
      Shares purchased by Participant, at an exercise price equal to $2.00 per
      share.

    


    (g)           This
      Offering, as defined in the Memorandum, is scheduled to close no later than
      June
      30, 2006 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 3,000,000 Shares ($6,000,000)
      and an additional over-allotment at the Company’s discretion of up to 1,000,000
      Shares ($2,000,000), but this Offering has no prescribed minimum amount and
      the
      Company may accept lessor amounts from investors or have multiple closings
      of
      this Offering.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    (h)           Until
      the registration statement contemplated by the Rights Agreement is declared
      effective, 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 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)           Other
      than the rights specifically set forth in this Subscription and the Rights
      Agreement, 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.

    


    (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 A.

    


    (h)           Participant
      understands that the Shares are illiquid, and until registered with the
      Securities Exchange Commission, or 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 will cause it 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 its 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
      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, its financial position and its 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.

    


    (l)         
        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 jurisdiction of
      its
      incorporation 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 and the Rights Agreement
      delivered together with this Subscription or in connection herewith have been
      duly authorized, executed, and delivered by the Company and are valid and
      binding agreements, enforceable in accordance with their 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 and
      the
      Rights Agreement and to perform its obligations hereunder and under all other
      agreements entered into by the Company relating hereto.

    


    (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 Over the Counter Bulletin Board
      (the “OTC Bulletin Board”), 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.

    


    (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 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 OTC Bulletin Board.  The Company has not received any
      oral or written notice that its common stock will be delisted from the OTC
      Bulletin Board 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 OTC Bulletin
      Board.

    


    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.

    


    9.        
         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
      A, included herewith.)

    


    
      	
              Name
                (please print):

            	  
              
	
               

            	
               

            


    

    
      	
              If
                entity named above,

            	
              By:

            	
                
                

            
	
               

            	
              Its:

            	  
              


    

    


    
      	
              Social
                Security or Taxpayer I.D. Number:

            	
                
                

            
	
               

            	 


    

    
      	
              Business
                Address (including zip code):

            	 
	
               

            	
               

            
	
                
                

            
	
               

            	 


    

    
      	
              Business
                Phone:

            	
                   
                

            
	 	 
	
                
                

            
	
               

            	 


    

    
      	
              Residence
                Address (including zip code):

            	
                
                

            
	 	 
	
                  
                

            
	
               

            	 


    

    
      	
              Residence
                Phone:

            	
                 
                

            
	
               

            	 


    

    
      	
              Email:

            	
                  
                

            


    

    


    All
      communications to be sent to:


    
      	 	
               

            	 	 	 
	   
              	
               Business
                or

            	 	   
              	
               Residence
                Address

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    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, AND 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 inves­tor's domicile and his or
      her 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.)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    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
      ________, 2007, at _________________________.

    


    


    
      	 	 	
              PARTICIPANT

            	 
	 	 	 	 
	 	 	   
              	 
	 	 	
              (Signature

            	 


    

    


    
      	 	 	
              By:

            	 
              	 
	 	 	 	 	 
	 	 	
              Its:

            	  
              	 


    

     

    The
      Company has accepted this subscription this _____ day of ____________,
      2007.

     

    
      	 	 	
              “COMPANY”

            
	 	 	 
	 	 	
              PROCERA
                NETWORKS, INC.,

            
	 	 	
              a
                Nevada corporation

            


    

     

    
      	 	 	
              By:

            	   
              	 
	 	 	
              Douglas
                Glader, CEO 

            	 


    

     

    
      	 	 	
              Address
                for notice:

            
	 	 	 
	 	 	
              Procera
                Networks, Inc.

            
	 	 	
              100
                Cooper Court

            
	 	 	
              Los
                Gatos, CA  95032

            
	 	 	
              Attn:
                Jay Zerfoss

            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Exhibit
      A

    


    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 is representing his 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;

            


    

    


    
      	
              ____

            	
              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 __________________, 2007.

     

    
      	 	 	   
              	 
	 	 	
              Name
                of Participant 

            	 
	 	 	 	 	 
	 	 	
              By:

            	  
              	 
	 	 	
              Name:

            	  
              	 
	 	 	
              Title: