ex4_3.htm


    
      

    

    
      Exhibit
        4.3

      PROCERA
        NETWORKS, INC.

      


      WARRANT
        AGREEMENT

      


      Restricted
        Common Stock Exercisable at $2.00 per Share

      


      THE
        SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED BY INVESTOR FOR INVESTMENT
        AND
        NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.
        NO
        SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
        STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL SATISFACTORY IN FORM
        AND
        SUBSTANCE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
        SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
        ACT").

      


      THE
        SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
        ACT
        OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE
        ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
        SUCH
        STATE LAWS.  THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
        TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
        PERMITTED UNDER THE SECURITIES ACT AND SUCH STATE LAWS PURSUANT TO REGISTRATION
        OR AN EXEMPTION THEREFROM.  THE SECURITIES HAVE NOT BEEN APPROVED OR
        DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES
        COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING
        AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING.  ANY
        REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

      


      THE
        COMPANY IS RELYING ON CERTAIN FEDERAL AND STATE LAWS, POLICIES AND JUDICIAL
        PRECEDENTS WHICH EXEMPT THIS OFFERING FROM THE NECESSITY OF
        REGISTRATION.  AS A CONSEQUENCE, SUCH SECURITIES WILL BE REQUIRED TO
        BE HELD INDEFINITELY UNLESS THEY ARE SUBSEQUENTLY REGISTERED UNDER THE
        SECURITIES ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.


      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      


      THIS
        WARRANT AGREEMENT (this "Agreement") is made and entered into as of July,
        17,
        2007 between Procera Networks, Inc., a Nevada corporation (the
        "Company"), and ________________________ (“Holder”).

      


      1.           Warrant
        Certificates.  The warrant certificates to be delivered pursuant
        to this Agreement (the "Warrant Certificates") shall be in the form set forth
        in
Exhibit A, attached hereto and made a part hereof, with such appropriate
        insertions, omissions, substitutions and other variations as are required
        or
        permitted by this Warrant Agreement.

      


      2.           Right
        to Exercise Warrants.  Each Warrant may be exercised from the date
        of this Agreement until 11:59 P.M. (Eastern Standard Time) on the date that
        is
        five (5) years after the date of this Agreement (the "Expiration
        Date").  Each Warrant not exercised on or before the Expiration Date
        shall expire.

      


      Each
        Warrant shall entitle its holder to purchase from the Company one share of
        Common Stock(each an “Exercise Share”) at an exercise price of $2.00 per share,
        subject to adjustment as set forth below ("Exercise Price").

      


      The
        Company shall not be required to issue fractional shares of Common Stock
        upon
        the exercise of this Warrant or to deliver Warrant Certificates which evidence
        fractional shares of capital stock.  In the event that a fraction of
        an Exercise Share would, except for the provisions of this paragraph 2, be
        issuable upon the exercise of this Warrant, the Company shall pay to the
        Holder
        exercising the Warrant an amount in cash equal to such fraction multiplied
        by
        the current market value of the Exercise Share.  For purposes of this
        paragraph 2, the current market value shall be determined as
        follows:

      


      (a)           if
        the Shares are traded in the over-the-counter market and not on any national
        securities exchange and not in the NASDAQ Reporting System, the average of
        the
        mean between the last bid and asked prices per share, as reported by the
        National Quotation Bureau, Inc., or an equivalent generally accepted reporting
        service, for the last business day prior to the date on which the Warrant
        is
        exercised, or, if not so reported, the average of the closing bid and asked
        prices for a Share as furnished to the Company by any member of the National
        Association of Securities Dealers, Inc., selected by the Company for that
        purpose.

      


      (b)           if
        the Shares are listed or traded on a national securities exchange or in the
        NASDAQ Reporting System, the closing price on the principal national securities
        exchange on which they are so listed or traded or in the NASDAQ Reporting
        System, as the case may be, on the last business day prior to the date of
        the
        exercise of the Warrant.  The closing price referred to in this Clause
        (b) shall be the last reported sales price or, in case no such reported sale
        takes place on such day, the average of the reported closing bid and asked
        prices, in either case on the national securities exchange on which the Shares
        are then listed on in the NASDAQ Reporting System; or

      


      (c)           if
        no such closing price or closing bid and asked prices are available, as
        determined in any reasonable manner as may be prescribed by the Board of
        Directors of the Company.

      


      3.           Mutilated
        or Missing Warrant Certificates.  In case any of the Warrant
        Certificates shall be mutilated, lost, stolen or destroyed prior to the
        Expiration Date, the Company shall issue and deliver, in exchange and
        substitution for and upon cancellation of the mutilated Warrant Certificate,
        or
        in lieu of and in substitution for the Warrant Certificate lost, stolen or
        destroyed, a new Warrant Certificate of like tenor and representing an
        equivalent right or interest.

      


      4.           Reservation
        of Shares.  The Company will at all times reserve and keep
        available, free from preemptive rights, out of the aggregate of its authorized
        but unissued Shares or its authorized and issued Shares held in its treasury
        for
        the purpose of enabling it to satisfy its obligation to issue Exercise Shares
        upon exercise of Warrants, the full number of Exercise Shares deliverable
        upon
        the exercise of all outstanding Warrants.

      


      The
        Company covenants that all Exercise Shares which may be issued upon exercise
        of
        Warrants will be validly issued, fully paid and non-assessable outstanding
        Shares of the Company.


      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      


      5.           Rights
        of Holder.   The Holder shall not, by virtue of anything
        contained in this Warrant Agreement or otherwise, prior to exercise of this
        Warrant, be entitled to any right whatsoever, either in law or equity, of
        a
        stockholder of the Company, including without limitation, the right to receive
        dividends or to vote or to consent or to receive notice as a stockholder
        in
        respect of the meetings of stockholders or the election of directors of the
        Company of any other matter.

      


      6.           Investment
        Intent; Accredited Investor.  Holder represents and warrants to
        the Company that Holder is acquiring the Warrants for investment purposes
        and
        with no present intention of distributing or reselling any of the
        Warrants.  Holder represents that it is an “accredited investor”
within the meaning of Rule 501 of Regulation D under the Securities Act (the
        “Act”) and has executed and delivered the Investment Representation Statement
        that accompanies this Agreement.

      


      7.           Certificates
        to Bear Legend.  The Warrants and the certificate or certificates
        therefore shall bear the following legend by which each holder shall be
        bound:

      


      "THE
        SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER
        THE
        SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE
        TRANS­FERRED WITHOUT AN EFFECTIVE REGIS­TRATION THEREOF UNDER SUCH ACT
        OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL, REASON­ABLY SATISFACTORY
        TO THE COR­PORATION AND ITS COUN­SEL, THAT SUCH REGISTRATION IS NOT
        REQUIRED."

      


      The
        Exercise Shares and the certificate or certificates evidencing any such Exercise
        Shares shall bear the following legend:

      


      "THE
        SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
        THE
        SECURITIES ACT OF 1933.  THE SHARES MAY NOT BE SOLD OR TRANSFERRED IN
        THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL THAT AN EXEMPTION
        FROM
        REGISTRATION UNDER SUCH ACT IS AVAILABLE."

      


      Certificates
        for Warrants or Exercise Shares, as the case may be, without such legend
        shall
        be issued if such Warrants or Exercise Shares are sold pursuant to an effective
        registration statement under the Act or if the Company has received an opinion
        from counsel reasonably satisfactory to counsel for the Company that such
        legend
        is no longer required under the Act.

      


      8.           Adjustment
        of Number of Shares and Class of Capital Stock Purchasable.  The
        number of Exercise Shares and class of capital stock purchasable under this
        Warrant are subject to adjustment from time to time as set forth in this
        Section
        8.

      


      (a)           Adjustment
        for Change in Capital Stock.  If the Company:

      


      
        	
                 

              	
                (i)

              	
                pays
                  a dividend or makes a distribution on its Common
                  Stock;

              


      

       

      
        	
                 

              	
                (ii)

              	
                subdivides
                  its outstanding shares of Common Stock into a greater number of
                  shares;

              


      

      


      
        	
                 

              	
                (iii)

              	
                combines
                  its outstanding shares of Common Stock into a smaller number of
                  shares;
                  or

              


      

      


      
        	
                 

              	
                (iv)

              	
                makes
                  a distribution on its Common Stock in shares of its capital stock
                  other
                  than Common Stock.

              


      

      


      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      then
        the
        number and classes of Exercise Shares purchasable upon exercise of each Warrant
        in effect immediately prior to such action shall be adjusted so that the
        holder
        of any Warrant thereafter exercised may receive the number and classes of
        shares
        of capital stock of the Company which such holder would have owned immediately
        following such action if such holder had exercised the Warrant immediately
        prior
        to such action.

      


      For
        a
        dividend or distribution the adjustment shall become effective immediately
        after
        the record date for the dividend or distribution.  For a subdivision,
        combination or reclassification, the adjustment shall become effective
        immediately after the effective date of the subdivision, combination or
        reclassification.

      


      If
        after
        an adjustment the holder of a Warrant upon exercise of it may receive shares
        of
        two or more classes of capital stock of the Company, the Board of Directors
        of
        the Company shall in good faith determine the allocation of the adjusted
        Exercise Price between or among the classes of capital stock.  After
        such allocation, that portion of the Exercise Price applicable to each share
        of
        each such class of capital stock shall thereafter be subject to adjustment
        on
        terms comparable to those applicable to the Exercise Shares in this
        Agreement.  Notwithstanding the allocation of the Exercise Price
        between or among shares of capital stock as provided by this Section 8(a),
        a
        Warrant may only be exercised in full by payment of the entire Exercise Price
        in
        effect at the time of such exercise.

      


      (b)           Consolidation,
        Merger or Sale of the Company.  If the Company is a
        party to a consolidation, merger or transfer of assets which reclassifies
        or
        changes its outstanding Common Stock, the successor corporation (or corporation
        controlling the successor corporation or the Company, as the case may be)
        shall
        by operation of law assume the Company's obligations under this
        Agreement.  Upon consummation of such transaction, the Warrants shall
        auto­matically become exercisable for the kind and amount of securities,
        cash or other assets which the holder of a Warrant would have owned immediately
        after the consolidation, merger or transfer if the holder had exercised the
        Warrant immediately before the effective date of such transaction.  As
        a condition to the consummation of such transaction, the Company shall arrange
        for the person or entity obligated to issue securities or deliver cash or
        other
        assets upon exercise of the Warrant to, concurrently with the consummation
        of
        such transaction, assume the Company's obligations hereunder by executing
        an
        instrument so providing and further providing for adjustments which shall
        be as
        nearly equivalent as may be practical to the adjustments provided for in
        this
        Section 8.

      


      9.           Successors.  All
        the covenants and provisions of this Agreement by or for the benefit of the
        Company or Holder shall bind and inure to the benefit of their respective
        successor and assigns hereunder.

      


      10.         Counterparts.  This
        Agreement may be executed in any number of counterparts and each of such
        counterparts shall for all proposes be deemed to be an original, and such
        counterparts shall together constitute by one and the same
        instrument.

      


      11.         Notices.   All
        notices or other communications under this Agreement shall be in writing
        and
        shall be deemed to have been given if delivered by hand or mailed by certified
        mail, postage prepaid, return receipt requested, addressed as
        follows:  if to the Company: Procera Networks, Inc., 100 Cooper Court,
        Los Gatos, CA 95032, Attention: Jay Zerfoss, Chief Financial Officer, and
        to the
        Holder: at the address of the Holder appearing on the books of the Company
        or
        the Company’s transfer agent, if any.

      


      Either
        the Company or the Holder may from time to time change the address to which
        notices to it are to be mailed hereunder by notice in accordance with the
        provisions of this Paragraph 11.

      


      12.         Supplements
        and Amendments.   The Company may from time to time
        supplement or amend this Agreement without the approval of any Holders in
        order
        to cure any ambiguity or to be correct or supplement any provision contained
        herein which may be defective or inconsistent with any other provision, or
        to
        make any other provisions in regard to matters or questions herein arising
        hereunder which the Company may deem necessary or desirable and which shall
        not
        materially adversely affect the interest of the Holder.

      


      13.         Severability.   If
        for any reason any provision, paragraph or term of this Agreement is held
        to be
        invalid or unenforceable, all other valid provisions herein shall remain
        in full
        force and effect and all terms, provisions and paragraphs of this Agreement
        shall be deemed to be severable.

      


      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      14.         Governing
        Law and Venue.   This Agreement shall be deemed to be a
        contract made under the laws of the State of California and for all purposes
        shall be governed and construed in accordance with the laws of said
        State.  Any proceeding arising under this Agreement shall be
        instituted in the State of California.

      


      17.         Headings.   Paragraphs
        and subparagraph headings, used herein are included herein for convenience
        of
        reference only and shall not affect the construction of this Agreement nor
        constitute a part of this Agreement for any other purpose.

      


      IN
        WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
        executed, as of the date and year first above written.

      


      
        	 	
                COMPANY

              	 	 	
                HOLDER:

              	 
	 	
                Procera
                  Networks, Inc.

              	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	
                By:

              	
                 

              	 	 	 	 
	 	
                Doug
                  Glader, CEO

              	 	 	 	 
	 	 	 	 	
                 

              	 
	 	 	 	 	 	 
	 	 	 	
                By:

              	
                 

              	 
	 	 	 	
                Name:

              	
                 

              	 
	 	 	 	
                Tax
                  ID:

              	
                 

              	 


      

      

        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

        

      

       

      Exhibit
        A

      


      THE
        SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER
        THE
        SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE
        TRANSFERRED WITHOUT AN EFFECTIVE REGIS­TRATION THEREOF UNDER SUCH ACT OR
        PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL, REASON­ABLY SATISFACTORY TO
        THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
        REQUIRED.

      


      WARRANT
        TO PURCHASE SHARES

      OF
        COMMON
        STOCK OF

      PROCERA
        NETWORKS, INC

      


      
        	
                Initial
                  Number of Shares:

              	 	
                 

              
	
                Exercise
                  Price:

              	 	
                $2.00
                  per share

              
	
                Date
                  of Grant:

              	 	
                July
                  17, 2007

              
	
                Expiration
                  Date:

              	 	
                July
                  17, 2012

              


      

      


      THIS
        CERTIFIES THAT, _____________________- or any person or entity to whom the
        inter­est in this Warrant is lawful­ly transferred ("Holder") is
        entitled to purchase the above number (as adjust­ed pursuant to Section 4
        hereof) of fully paid and non-assess­able shares of the Common Stock (the
        "Shares") of Procera Networks, Inc., a Nevada corporation (the "Company),
        having
        an Exercise Price as set forth above, subject to the provisions and upon
        the
        terms and condi­tions set forth herein and in the Warrant Agreement dated
        July 17, 2007.  The exercise price, as adjusted from time to time as
        provided herein, is referred to as the "Exercise Price."

       

      1.           Term.  The
        purchase right represented by this Warrant is exer­cisable, in whole or in
        part, at any time commencing on the Date of Grant and ending on the Expiration
        Date, after which time the Warrant shall be void.

      


      2.           Method
        of Exercise; Payment; Issuance of New Warrant.  Subject to Section
        1 hereof, the right to purchase Shares repre­sented by this Warrant may be
        exercised by Holder, in whole or in part, for the total number of Shares
        remaining available for exercise by the surrender of this Warrant (with the
        notice of exercise form attached hereto as Exhibit A duly executed) at
        the principal office of the Company and by the payment to the Company, by
        check
        made payable to the Company drawn on a United States bank and for United
        States
        funds, or by delivery to the Company of evidence of cancellation of indebtedness
        of the Company to such Holder, of an amount equal to the then appli­cable
        Exercise Price per share multiplied by the number of Shares then being purchased
        or by net exercise pursuant to Section 6 hereof.  In the event of any
        exercise of the purchase right represented by this War­rant, certificates
        for the Shares so purchased shall be promptly delivered to Holder and, unless
        this Warrant has been fully exercised or has expired, a new Warrant representing
        the portion of the Shares, if any, with respect to which this Warrant shall
        not
        then have been exer­cised shall also be promptly delivered to
        Holder.

      


      3.           Exercise
        Price.   The Exercise Price at which this Warrant may be
        exercised shall be the Exercise Price, as adjusted from time to time pursuant
        to
        Section 4 hereof.

      


      4.           Reclassification,
        Reorganization, Consolidation or Merger.  In the case of any
        reclassification of the Shares, or any reorganization, consolidation or merger
        of the Company with or into another corporation (other than a merger or
        reorganization with respect to which the Company is the continuing corporation
        and which does not result in any reclassification of the Shares), the Company,
        or such successor corporation, as the case may be, shall execute a new warrant
        providing that the Holder shall have the right to exercise such new warrant
        and
        upon such exercise to receive, in lieu of each Share theretofore issuable
        upon
        exercise of this Warrant, the number and kind of securities, money and property
        receivable upon such reclassification, reorganization, consolidation or merger
        by a holder of Shares for each Share.  Such new warrant shall provide
        for adjustments which shall be as nearly equivalent as may be practicable
        to the
        adjust­ments provided for in this Section 4 including, without limitation,
        adjustments to the Exercise Price and to the number of Shares issuable upon
        exercise of this Warrant.  The provisions of this Section 4 shall
        similarly apply to successive reclassifications, reorganizations, consolidations
        or mergers.

      


      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

      5.           Transferability
        and Negotiability of Warrant.  This Warrant 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, if reasonably requested
        by the Com­pany).  Subject to the provisi­ons of this
        Section 5, title to this War­rant may be transferred in the same manner
        as a negotiable instrument transferable by endorsement and
        delivery.

      


      6.           Net
        Exercise.  In lieu of exercising this Warrant for cash, the Holder
        may elect to exchange this Warrant for Shares equal to the value of this
        Warrant
        by surrender of this Warrant, together with notice of such election, at the
        principal office of the Company, in which event the Company shall issue to
        the
        holder a number of Shares computed using the following formula:

      


      X
        = Y
        (A-B)

      A

      Where                 :

      


      X=
        the
        number of Shares to be issued to the holder.

      Y=
        the
        number of Shares purchasable under this Warrant.

      A=
        value
        per share of one Share determined in accordance with Section 2 of the Warrant
        Agreement.

      B=
        the
        Exercise Price (as adjusted).

       

      
        7.           Miscellaneous.
          The Company cove­nants that it will at all times reserve and keep available,
          solely for the purpose of issue upon the exercise hereof, a sufficient
          number of
          Shares to permit the exer­cise hereof in full.  Such Shares, when
          issued in compliance with the provisions of this Warrant and the Company’s First
          Amended and Restated Articles of Incorporation, will be duly authorized,
          validly
          issued, fully paid and non-assessable.  No Holder of this Warrant, as
          such, shall, prior to the exercise of this Warrant, be entitled to vote
          or
          receive dividends or be deemed to be a stockholder of the Company for any
          purpose, nor shall anything contained in this Warrant be construed to confer
          upon Holder, as such, any rights of a stockholder of the Company or any
          right to
          vote, give or withhold consent to any corporate action, receive notice
          of
          meetings, receive dividends or subscription rights, or
          otherwise.  Upon receipt of evidence reasonably satisfactory to the
          Company of the loss, theft, destruction or mutilation of this Warrant and,
          in
          the case of any such loss, theft or destruction, upon delivery of an indemnity
          agreement reason­ably satisfactory in form and amount to the Company or, in
          the case of any such mutila­tion, upon surrender and cancellation of such
          Warrant, the Company at its expense will execute and deliver, in lieu thereof,
          a
          new Warrant of like date and tenor.  The terms and provisions of this
          Warrant shall inure to the bene­fit of, and be binding upon, the Company and
          the Holder hereof and their respec­tive successors and as­signs. This
          Warrant shall be governed by and construed under the laws of the State
          of
          Nevada.



      
        	 Holder:	
                 

              	 	Company:	
                 

              
	 	
                 

              	 	 	
                Procera
                  Networks, Inc., a Nevada Corporation

              
	 	 	 	 	 
	 	 	 	 	 
	 By:	
                 

              	 	By:	
                 

              
	 	 	 	 	 
	 Name:	
                 

              	 	 	
                Doug
                  Glader, CEO

              


      


      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      


      NOTICE
        OF EXERCISE

      


      TO:         
        PROCERA NETWORKS, INC.

       

      1.           The
        undersigned hereby elects to purchase _________ shares of the Common Stock
        of
        PROCERA NETWORKS, INC. pursuant to the terms of the attached Warrant, and
        tenders herewith payment of the purchase price of such shares in full, together
        with all applicable transfer taxes, if any.

      


      2.           The
        undersigned hereby elects to purchase __________ shares of the Common Stock
        of
        PROCERA NETWORKS, INC. pursuant to the terms of the attached Warrant on a
        net
        exercise basis in accordance with Section 6.

      


      3.           Please
        issue a certificate or certificates repre­senting said shares of the Common
        Stock in the name of the under­signed or in such other name as is specified
        below:

      


      


      
        	 	
                Name:

              	
                 

              	 
	 	 	 	 
	 	
                Tax
                  ID:

              	
                 

              	 
	 	 	 	 
	 	
                Address:

              	
                 

              	 
	 	 	
                 

              	 
	 	 	
                 

              	 
	 	 	
                 

              	 
	 	 	
                 

              	 
	 	 	 	 
	 	 	 	 
	 	
                Signed:

              	
                 

              	 
	 	 	 	 
	 	 	 	 
	 	
                Date:

              	
                 

              	 


      


      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      


      INVESTMENT
        REPRESENTATION STATEMENT

       

      
        	
                PURCHASER

              	
                :

              	
                 

              	 
	
                COMPANY

              	
                :

              	
                PROCERA
                  NETWORKS, INC.

              	 
	
                SECURITY

              	
                :

              	
                COMMON
                  STOCK

              	 
	
                AMOUNT

              	
                :

              	
                 

              	 
	
                DATE

              	
                :

              	
                 

              	 


      

      


      In
        connection with the purchase of the above-listed Securities, I, the Purchaser,
        represent to the Company the following:

      


      (a)         
        I am aware of the Company's business affairs and financial condition, and
        have
        acquired sufficient information about the Company to reach an informed and
        knowledgeable decision to acquire the Securities.  I am purchasing
        these Securities for my own account for investment purposes only and not
        with a
        view to, or for the resale in connection with, any "distribution" thereof
        for
        purposes of the Securities Act of 1933, as amended ("Securities
        Act").

      


      (b)          I
        understand that the Securities have not been registered under the Securities
        Act
        in reliance upon a specific exemption therefrom, which exemption depends
        upon,
        among other things, the bona fide nature of my investment intent as expressed
        herein.

      


      (c)          I
        further understand that the Securities must be held indefinitely unless
        subsequently registered under the Securi­ties Act or unless an exemption
        from registration is otherwise available.  In addition, I understand
        that the certificate evidencing the Securities will be imprinted with a legend
        which prohibits the transfer of the Securities unless they are registered
        or
        such registration is not required in the opinion of counsel for the Purchaser
        satisfactory to the Company or receipt of a nonaction letter from the Securities
        and Exchange Commission.

      


      (d)          I
        am aware of the provisions of Rule 144, promulgated under the Securities
        Act, which, in substance, permits limited public resale of "restricted
        securities" acquired, directly or indirectly, from the issuer thereof (or
        from
        an affiliate of such issuer), in a non-public offering subject to the
        satisfaction of certain conditions, if applicable, including, among other
        things:  the availability of certain public information about the
        Company; the resale occurring not less than one year after the party has
        purchased and paid for the securities to be sold; the sale being made through
        a
        broker in an unsolicited "broker's transaction" or in transactions directly
        with
        a market maker (as said term is defined under the Securities Exchange Act
        of
        1934, as amended); and the amount of securities being sold during any three
        month period not exceeding the specified limitations stated
        therein.

      


      (e)          I
        further understand that at the time I wish to sell the Securities there may
        be
        no public market upon which to make such a sale, and that, even if such a
        public
        market then exists, the Company may not be satisfying the current public
        information requirements of Rule 144, and that, in such event, I may be
        precluded from selling the Securities under Rule 144 even if the one-year
        minimum holding period had been satisfied.

      


      (f)          I
        further understand that in the event all of the requirements of Rule 144
        are not satisfied, registration under the Securities Act, compliance with
        Regulation A, or some other registration exemption will be required; and
        that, notwithstanding the fact that Rule 144 is not exclusive, the Staff of
        the SEC has expressed its opinion that persons proposing to sell private
        placement securities other than in a registered offering and otherwise than
        pursuant to Rule 144 will have a substantial burden of proof in
        establishing that an exemption from registration is available for such offers
        or
        sales, and that such persons and their respective brokers who participate
        in
        such transactions do so at their own risk.

       

      
        	
                Date:

              	
                 

              	 	
                 

              	 
	 	 	 	
                Purchaser

              	 


      

       

       

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