ex4_15.htm


    
      

    

    WARRANT
      AGREEMENT

    


    TO
      PURCHASE COMMON STOCK OF

    


    PROCERA
      NETWORKS, INC.

    


    


    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.

    


    THE
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
      ACT
      OF 1933, AS AMENDED (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.  THERE
      IS NO PUBLIC MARKET FOR THE SECURITIES AND NONE IS LIKELY TO
      DEVELOP.  THE COMPANY IS UNDER NO OBLIGATION TO REGISTER THE
      SECURITIES UNDER THE SECURITIES ACT.

     

    
      
        
        

      

      
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    This
      Warrant Agreement (the "Agreement") is entered into this _________day of
      ___, 2003, by and between Procera Networks, Inc. (the "Company”)
      and                                      
(the Holder").  For good and valuable consideration, the receipt
      and sufficiency of which is hereby acknowledged, the parties agree as
      follows:

    


    1.           Issuance
      of Warrants.  The Company, subject to the terms and conditions
      hereinafter set forth, hereby issues Warrants (“Warrants”) to purchase one share
      of Company Common Stock (the “Share” or “Shares”) for each two shares of Company
      Common Stock purchased by Holder pursuant to that certain Subscription
      Agreement, dated­, executed and delivered by Holder to Company (the
“Subscription”).  The Purchase Price upon exercise of the Warrants
      shall be Seventy-Five Cents ($0.75) per Share of Common Stock Purchased subject
      to adjustment in accordance with Paragraph 5 of this Agreement.

    


    2.           Term.  The
      Warrants may be exercised at any time after the Effective Date set forth on
      the
      signature page hereof and.

    


    3.           Exercise.

    


    (a)           The
      Holder shall exercise the Warrants granted hereunder, in whole or in part,
      by
      delivering to the Company at the office of the Company, or at such other address
      as the Company may designate by notice in writing to the holder hereof, (1)
      the
      Notice of Exercise attached hereto as Exhibit A (or the Notice of Net
      Issue Exercise attached hereto as Exhibit B) and incorporated herein by
      reference and, (2) a certified check or wire transfer in lawful money of the
      United States in the amount of the Purchase Price multiplied by the number
      of
      Shares to be received (except in the case of a Net Issue Exercise).

    


    (b)           Upon
      delivery of the items set forth in (a) above, the Holder shall be entitled
      to
      receive a certificate or certificates representing the Shares issued upon
      exercise of the Warrants.  Such Shares shall be validly issued, fully
      paid and non-assessable.

    


    (c)           Warrants
      shall be deemed to have been exercised immediately prior to the close of
      business on the day of such delivery, and the Holder shall be deemed the holder
      of record of the Shares issuable upon such exercise at such time.  The
      Warrants may be exercised in whole or in part and from time to time as the
      Holder may determine.

    


    (d)           Upon
      any partial exercise, at the request of the Company, this Agreement shall be
      surrendered and a new Warrant Agreement evidencing the right to purchase the
      number of Shares not purchased upon such exercise shall be issued to the
      Holder.

    


    (e)           Net
      Issue Exercise.

    


    (i)           In
      lieu of exercising this Warrant in the manner provided above in Section 3(a),
      the Holder may elect to receive Shares equal to the value of this Warrant (or
      the portion thereof being canceled) by surrender of this Warrant at the
      principal office of the Company together with notice of such election in which
      event the Company shall issue to the Holder a number of Shares computed using
      the following formula:

    


    


    X
      =           (P)(Y)(A -
      B)

    A

    


    Where
      X =
      The number of Shares to be issued to the Holder for the portion of the Warrant
      being converted;

     

    


    P
      = The
      portion of the Warrant being converted expressed as a decimal
      fraction;

     

    
      
        
        

      

      
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    Y
      = The
      number of Shares purchasable under this Warrant (as adjusted under Section
      5
      herein, on the date of such calculation);

    


    A
      = The
      fair market value of one Share (at the date of such calculation);
      and

    


    B
      = The
      Purchase Price (as adjusted under Section 5 herein, on the date of such
      calculation).

    


    (ii)           For
      purposes of this Section 3(e), the fair market value of one Share on the date
      of
      calculation shall mean:

    


    (A)           If
      the exercise is in connection with a public offering of Company’s Common Stock,
      and if a Registration Statement relating to such public offering has been
      declared effective by the Securities and Exchange Commission, then the fair
      market value per Share shall be the initial per share "Price to Public"
      specified in the final prospectus with respect to the offering;

    


    (B)           If
      (A) is not applicable, the fair market value of a Share shall be at the highest
      price per Share which the Company could obtain on the date of calculation from
      a
      willing buyer (not a current employee or director) for Shares sold by the
      Company, from authorized but unissued Shares, as determined in good faith by
      the
      Board of Directors, unless the Company is at such time subject to an
      acquisition, in which case the fair market value of one Share shall be deemed
      to
      be the per-share value received by the holders of such stock pursuant to such
      acquisition.

    


    (f)           Any
      portion of this Warrant that is converted shall be immediately
      canceled.  This Warrant or any portion hereof shall be deemed to have
      been converted immediately prior to the close of business on the date of its
      surrender for conversion as provided above, and the person entitled to receive
      the shares of stock issuable upon such conversion shall be treated for all
      purposes as Holder of such shares of record as of the close of business on
      such
      date.  As promptly as practicable after such date, the Company shall
      issue and deliver to the person or persons entitled to receive the same a
      certificate or certificates for the number of full shares issuable upon such
      conversion.  If the Warrant shall be converted for less than the total
      number of shares of the Warrant then issuable upon conversion, promptly after
      surrender of the Warrant upon such conversion, the Company will execute and
      deliver a new Warrant, dated the date hereof, evidencing the right of the Holder
      to the balance of the shares purchasable hereunder upon the same terms and
      conditions set forth herein.

    


    4.           Representations
      and Warranties of the Holder.  The Holder hereby represents and
      warrants to the Company as follows:

    


    (a)           Sophistication.
      The Holder has (i) a preexisting personal or business relationship with the
      Company or one or more of its officers, directors, or control persons; or
      (ii) by reason of the Holder’s business or financial experience, or by
      reason of the business or financial experience of the Holder’s financial advisor
      who is unaffiliated with and who is not compensated, directly or indirectly,
      by
      the Company or any affiliate or selling agent of the Company, the Holder is
      capable of evaluating the risks and merits of this investment and of protecting
      the Holder’s own interests in connection with this investment.

    


    (b)           Accredited
      Investor.  The Holder is an "accredited investor" as such term is
      defined under Regulation D of the Securities Act of 1933 as amended (the
      "Securities Act").

    


    (c)           Investment
      Intent.  The Holder is purchasing the Shares solely for its own
      account for investment.  The Holder has no present intention to resell
      or distribute the Warrants or the Shares or any portion thereof.

    


    (d)           Information
      Concerning Company.  The Holder is aware of the business affairs and
      financial condition of the Company and has acquired sufficient information
      about
      the Company to make an informed and knowledgeable decision to purchase the
      Warrants and the Shares.

     

    
      
        
        

      

      
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    (e)           Economic
      Risk.  The Holder realizes that the purchase of the Warrants and the
      Shares will be a highly speculative investment and involves a high degree of
      risk. The Holder is able, without impairing his or her financial condition,
      to
      hold the Warrants and/or the Shares for an indefinite period of time and to
      suffer a complete loss of the Holder’s investment.

    


    5.           Anti-dilution
      Adjustments.  The Warrants granted hereunder and the Purchase
      Price thereof shall be subject to adjustment from time to time upon the
      happening of certain events as set forth below.  Notwithstanding the
      above or any provision of this Agreement, no adjustment shall be made to the
      Purchase Price or the amount of Warrants granted hereunder once the shares
      of
      Company’s Common Stock have been offered for sale in connection with an initial
      public offering.

    


    (a)           Stock
      Splits and Dividends.  If outstanding shares of the Company Common
      Stock shall be split into a greater number of shares or a dividend in Common
      Stock shall be paid in respect of Common Stock, the Purchase Price in effect
      immediately prior to such split or at the record date of such dividend shall
      simultaneously with the effectiveness of such split or immediately after the
      record date of such dividend be proportionately reduced.  If
      outstanding shares of Common Stock shall be combined into a smaller number
      of
      Shares, the Purchase Price in effect immediately prior to such combination
      shall, simultaneously with the effectiveness of such combination, be
      proportionately increased.  When any adjustment is required to be made
      in the Purchase Price, the number of Shares purchasable upon the exercise of
      this Warrant shall be changed to the number determined by dividing (i) an amount
      equal to the number of shares issuable upon the exercise of this Warrant
      immediately prior to such adjustment, multiplied by the Purchase Price in effect
      immediately prior to such adjustment, by (ii) the Purchase Price in effect
      immediately after such adjustment.

    


    (b)           Reclassification,
      Etc.  In case there occurs any reclassification or change of the
      outstanding securities of the Company or of any reorganization of the Company
      (or any other corporation the stock or securities of which are at the time
      receivable upon the exercise of this Warrant) or any similar corporate
      reorganization on or after the date hereof, then and in each such case the
      Holder, upon the exercise hereof at any time after the consummation of such
      reclassification, change, or reorganization shall be entitled to receive, in
      lieu of the stock or other securities and property receivable upon the exercise
      hereof prior to such consummation, the stock or other securities or property
      to
      which the Holder would have been entitled upon such consummation if the Holder
      had exercised this Warrant immediately prior thereto, all subject to further
      adjustment pursuant to the provisions of this Section.

    


    (c)           Adjustment
      Certificate.  When any adjustment is required to be made in the Shares
      or the Purchase Price pursuant to this Section, the Company shall promptly
      mail
      to the Holder a certificate setting forth (i) a brief statement of the facts
      requiring such adjustment, (ii) the Purchase Price after such adjustment and
      (iii) the kind and amount of stock or other securities or property into which
      this Warrant shall be exercisable after such adjustment.

    


    6.           Reservation
      of Shares.  The Company shall at all times keep reserved a
      sufficient number of authorized Shares to provide for the exercise of the
      Warrants in full.

    


    
      
        
        

      

      
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    7.           Non-Transferability.  The
      Warrants issued hereunder and any and all Shares issued upon exercise of the
      Warrants are not transferable.

    


    8.           Voting.  Nothing
      contained in this Agreement shall be construed as conferring upon the Holder
      the
      right to vote or to receive dividends or to consent or receive notice as a
      shareholder in respect to any meeting of shareholders for the election of
      directors of the Company or for any other purpose not specified
      herein.

    


    9.           Miscellaneous.

    


    (a)           Amendment.
      This Agreement may be amended only by written agreement between the Company
      and
      the Holder.

    


    (b)           Notice.
      Any notice, demand or request required or permitted to be given under this
      Agreement will be in writing and will be deemed sufficient when delivered
      personally or with a commercial courier service, with postage prepaid, and
      addressed, if to the Company, at its principal place of business, attention
      the
      President, and if to the Holder, at the Holder’s address as shown on the stock
      records of the Company.

    


    (c)           Further
      Assurances.  Both parties agree to execute any additional documents
      necessary to carry out the purposes of this Agreement.

    


    (d)           Severability.  If
      any provision of this Agreement is held by any court of competent jurisdiction
      to be illegal, unenforceable or void, such provision will be enforced to the
      greatest extent possible and all other provisions of this Agreement will
      continue in full force and effect.

    


    (e)           Governing
      Law. This Agreement will be interpreted and enforced in accordance with
      California Law as applied to agreements made and performed in
      California.

    


    (f)           Entire
      Agreement; Successors and Assigns.  This Agreement and the documents
      and instruments attached hereto constitute the entire agreement between the
      Holder and the Company relative to the subject matter hereof.  Any
      previous agreements between the parties are superseded by this
      Agreement.  Subject to any exceptions specifically set forth in this
      Agreement, the terms and conditions of this Agreement shall inure to the benefit
      of and be binding upon the respective executors, administrators, heirs,
      successors and assigns of the parties.

    


    (g)           Headings.  The
      headings of the Paragraphs of this Agreement are for convenience and shall
      not
      by themselves determine the interpretation of this Agreement.

    


    IN
      WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement
      as of the date first written above (“Effective Date”).

    


    
      
        
        

      

      
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              The
                Company:

            	
              PROCERA
                NETWORKS, INC.

            	 
	 	 	 
	 	
               

            	 
	 	
              Douglas
                J. Glader, President

            	 
	 	 	 
	
              The
                Holder:

            	 	 
	 	 	 
	 	
               

            	 


    

    


    
      
        
        

      

      
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    EXHIBIT
      A

     

    WARRANT

    


    NOTICE
      OF EXERCISE

    


    


    To:           PROCERA
      NETWORKS, INC.

    


    (1)                                
      ("Holder") hereby elects to purchase ______________ shares of Common Stock
      of
      Procera Networks, Inc. (the “Company”) pursuant to the terms of the Warrant
      Agreement executed by the Holder and the Company, datedand tenders herewith
      payment of the purchase price in full, together with all applicable transfer
      taxes, if any.

    


    (2)           Please
      issue a certificate or certificates representing said shares in the name of
      the
      Holder or in such other name as is specified below.

    


    


    
      	
              The
                Holder:

            	 	 	 
	 	 	 	 
	 	 	
               

            	 
	 	 	 	 
	
              Date:

            	 	
               

            	 


    

    


    
      
        
        

      

      
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    EXHIBIT
      B

    


    


    WARRANT

    


    NOTICE
      OF NET ISSUE EXERCISE

    


    To:           PROCERA
      NETWORKS, INC.

    


    (1)                                   (“Holder”)
      hereby elects to acquire ______________ shares of Common Stock of Procera
      Networks, Inc. (the “Company”), pursuant to the terms of the Warrant Agreement
      executed by the Holder and the Company, dated , by conversion of
      _____________ percent (________ %) of the Warrant.

     

    (2)           Please
      issue a certificate or certificates representing said shares in the name of
      the
      Holder or in such other name as is specified below.

     

    
      	
              The
                Holder:

            	 	 	 
	 	 	 	 
	 	 	
               

            	 
	 	 	 	 
	
              Date:

            	 	
               

            	 


    

     

     

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