Document:

Exhibit 10.02

FORBEARANCE AGREEMENT

This Forbearance
Agreement (the “Agreement”) is made, and is effective, as of July 16,
2007, by and among The Wornick Company (the “Company”), Right Away
Management Corporation, The Wornick Company Right Away Division and The Wornick
Company Right Away Division L.P. (each a “Subsidiary,” and collectively,
the “Subsidiaries”), the holders of the Company’s 10.875% Senior Secured
Notes due 2011 (the “Notes”) that were issued pursuant to that certain
Indenture, dated as of June 30, 2004 (as amended, modified, supplemented or
amended and restated from time to time, the “Indenture”), that are
signatories hereto (each a “Noteholder,” and collectively, the “Noteholders,”
and together with the Company, the “Parties”) and U.S. Bank National
Association, as indenture trustee (the “Indenture Trustee”) under the
Indenture, solely with respect to Sections 3(b)(i) and 14 hereof.

RECITALS

WHEREAS, the
Noteholders collectively hold not less than $100 million in aggregate principal
amount of the Notes, representing not less than 80% of the aggregate principal
amount of the Notes that are outstanding;

WHEREAS, each of the
Noteholders (other than DDJ Total Return Loan Fund, L.P.; B IV Capital
Partners, L.P.; DDJ High Yield Fund; GMAM Investment Funds Trust II, for the
account of the Promark Alternative High Yield Bond Fund (Account No. 7M2E);
GMAM Investment Funds Trust; General Motors Welfare Benefit Trust (VEBA); GMAM
Investment Funds Trust II for the account of the Promark

Alternative High Yield
Bond Fund (Account No. 7MWD); DDJ Capital Management Group Trust; Stichting
Pensioenfonds Hoogovens; The October Fund, Limited Partnership; DDJ/Ontario
Credit Opportunities Fund, L.P.; and Multi-Style, Multi-Manager Funds PLC The
Global High Yield Fund (collectively, “DDJ”)), is a member of the
unofficial group of holders of the Notes (the “Noteholder Group”), which
collectively holds a majority in principal amount of the Notes;

WHEREAS, the
Company, the Subsidiaries and DDJ Total Return Loan Fund, L.P. (as assignee of
Texas State Bank; in such capacity, “Lender”) are parties to that
certain Loan Agreement, dated as of June 30, 2004 (as amended by the First
Amendment dated as of March 16, 2007, and as further amended, modified,
supplemented or amended and restated from time to time, the “Loan Agreement”);

WHEREAS, (a) the
obligations of the Company and the Subsidiaries evidenced by the Notes and the
Guarantees (as defined in the Indenture) and (b) the obligations of the Company
and the Subsidiaries to Lender pursuant to the Loan Agreement and the other
Loan Documents (as defined in the Loan Agreement), are secured by a security
interest in and continuing lien on substantially all of the assets of the
Company and the Subsidiaries (the “Collateral”);

WHEREAS, Lender’s
and the Indenture Trustee’s rights with respect to the priority and enforcement
of their security interests in the Collateral are governed by that certain
Intercreditor Agreement, dated as of June 30, 2004, between the Indenture

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Trustee and the Texas
State Bank (as amended, modified, supplemented or amended and restated from
time to time, the “Intercreditor Agreement”);

WHEREAS, as
of the date hereof, the Events of Default referred to herein as the “Specified
Existing Defaults,” all of which are specified on schedule A
attached hereto, have occurred and are continuing;

WHEREAS, the Company
anticipates that during the Forbearance Period (as defined below), certain
additional Defaults and Events of Default will occur and continue, referred to
herein as the “Anticipated Defaults,” all of which are specified on
schedule A attached hereto;

WHEREAS, the Company and
the Subsidiaries have advised the Noteholders that the Company, the
Subsidiaries and Lender will, simultaneously with the execution of this
Agreement, enter into a separate forbearance agreement, pursuant to which
Lender shall agree to forbear from exercising the rights and remedies available
to Lender under the Loan Agreement and the other Loan Documents (as defined in
the Loan Agreement), all on the terms and conditions set forth in such separate
forbearance agreement (as such agreement may be amended, modified, supplemented
or amended and restated from time to time, the “DDJ Forbearance Agreement”);

WHEREAS, at the
Company’s request, the Noteholders have agreed to forbear from exercising, and
to instruct the Indenture Trustee not to exercise, those of the rights and
remedies available under the Indenture, the Intercreditor Agreement, the
Collateral Agreements and/or applicable law that have or may have arisen, or
may

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hereafter arise, due to
the occurrence and continuance of the Specified Existing Defaults or the
Anticipated Defaults, on the terms and conditions set forth herein; and

WHEREAS, capitalized
terms used and not defined herein shall have the meanings ascribed to them in
the Indenture.

NOW THEREFORE, in
consideration of the premises and the respective covenants and agreements set
forth in this Agreement, the Parties, each intending to be legally bound, agree
as follows:

1.             Forbearance.

(a)           Effective
as of the Forbearance Effective Date (as defined below), the Noteholders agree
that, until the expiration of the Forbearance Period (as defined below), they
will forbear from exercising, and shall direct the Indenture Trustee,  and by signature hereto so direct the
Indenture Trustee pursuant to Section 6.5 of the Indenture, not to exercise,
any rights and remedies against the Company or the Subsidiaries that are
available under the Indenture, the Intercreditor Agreement, the Collateral Agreements
and/or applicable law solely with respect to the Specified Existing Defaults
and any Anticipated Defaults (excluding, however, the Noteholders’ right to
charge default interest on the Notes (including on all unpaid interest on the
Notes to the extent provided under the Indenture) during the Forbearance
Period); provided, however, that nothing herein shall restrict,
impair or otherwise affect the exercise of the Noteholders’ rights under this
Agreement, and provided  further that no such forbearance

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shall constitute a waiver with respect to any such Specified Existing
Defaults, Anticipated Defaults or any other Events of Default under the
Indenture.

(b)           As
used herein, the term “Forbearance Period” shall mean the period
beginning on the date hereof and ending upon the occurrence of a Termination
Event.  As used herein, “Termination
Event” shall mean the earlier to occur of (i) August 15, 2007; and (ii) two
business days after the delivery by the Noteholder Group to the Company and
Lender of a written notice terminating the Forbearance Period (the “Termination
Notice”), which notice may be delivered at any time upon or after the
occurrence of any Forbearance Default (as defined below); provided, however,
that notwithstanding the foregoing, (x) this Agreement shall immediately
terminate two (2) business days after the occurrence of a Forbearance Default
under subsection (D) below without the need for delivery of the Termination
Notice or any other notice, and (y) this Agreement shall immediately terminate upon
the occurrence of a Forbearance Default under subsection (J) below, without the
need for delivery of the Termination Notice or any other notice.  As used herein, the term “Forbearance
Default” shall mean: (A) the failure of the Company to provide the Noteholder
Group and its financial advisors with reasonable access, as determined by the
Noteholder Group in its reasonable discretion, to its Chief Executive Officer,
other senior executives and outside advisors, including representatives of
Kroll Zolfo Cooper that are working with the Company, and to provide the
Noteholder Group and its legal and financial advisors with any and all due
diligence information they may reasonably request, including, without
limitation, the Company’s current 13-week cash flow schedule, and all updates
thereto as soon as reasonably practicable after they are prepared, but in no
event no later than two (2) business days

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thereafter; (B) the failure of the Company to
engage in good faith negotiations with the Noteholder Group regarding a
potential restructuring transaction, which determination shall be made by the
Noteholder Group in its reasonable discretion; (C) the failure of the Company
to promptly notify the Noteholder Group of the occurrence of a Forbearance
Default (as defined in the DDJ Forbearance Agreement) under the DDJ Forbearance
Agreement or any amendment or modification to the DDJ Forbearance Agreement;
(D) termination of  the DDJ
Forbearance Agreement; (E) the execution of any amendment or modification to
the DDJ Forbearance Agreement, which amendment or modification has a material
adverse effect on the Noteholder Group as determined by the Noteholder Group in
its reasonable discretion; (F) termination by the Company of the Chanin
Engagement Letter (as defined below) or the failure of the Company to pay
Chanin’s fees, expenses and indemnity in accordance with the terms of the
Chanin Engagement Letter (as defined below); (G) the occurrence of any Event of
Default that is neither a Specified Existing Default, nor an Anticipated
Default; (H) the failure of the Company to comply with any term,
condition, covenant or agreement set forth in this Agreement; (I) the
failure of any representation or warranty made by the Company under this
Agreement to be true and correct in all material respects as of the date when
made; (J) the commencement by or against the Company or any of the
Subsidiaries of a case under title 11 of the United States Code; or (K)
the commencement of any action or proceeding by any creditor of the Company or
any of the Subsidiaries seeking to attach or take similar action against the
assets of the Company or the Subsidiaries.

(c)           Upon
the occurrence of a Termination Event, the agreement of the Noteholders
hereunder to forbear, and to direct the Indenture Trustee to

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forbear, from exercising rights and remedies in respect of the
Specified Existing Defaults and any Anticipated Defaults, shall immediately
terminate without the requirement of any demand, presentment, protest, or
notice of any kind (other than, where required, the Termination Notice), all of
which the Company and the Subsidiaries hereby waive.  The Company and the Subsidiaries agree that,
upon the occurrence of, and at any time after, the occurrence of a Termination
Event, the Noteholders or the Indenture Trustee, as applicable, may proceed,
subject to the terms of the Indenture, the Intercreditor Agreement, the
Collateral Agreements and/or applicable law, to exercise any or all rights and
remedies under the Indenture, the Intercreditor Agreement, the Collateral
Agreements and/or applicable law, including, without limitation, the rights and
remedies on account of the Specified Existing Defaults, the Anticipated
Defaults and any other Events of Default that may then exist.  Without limiting the generality of the
foregoing, upon the occurrence of a Termination Event, subject to the terms of
the Intercreditor Agreement, the Collateral Agreements and any related
documents, the Noteholders or the Indenture Trustee, as applicable, may, upon
such notice or demand as is specified by the Indenture, the Intercreditor
Agreement, the Collateral Agreements or applicable law (x) collect and/or
commence any legal or other action to collect any or all of the Company’s or
the Subsidiaries’ obligations under the Indenture or the Guarantees
(collectively, the “Obligations”); (y) foreclose or otherwise realize on
any or all of the Collateral, and/or appropriate, setoff or apply to the
payment of any or all of the Obligations, any or all of the Collateral or
proceeds thereof; and (z) take any other enforcement action or otherwise
exercise any or all rights and remedies provided for under the Indenture, the
Intercreditor

 7
 

Agreement, the Collateral Agreements and/or applicable law, all of
which rights and remedies are fully reserved.

(d)           Any
agreement by the Noteholders to extend the Forbearance Period or to enter into
any other forbearance or similar arrangement must be set forth in writing and
signed by all of the Noteholders.  The
Company and the Subsidiaries acknowledge that the Noteholders have made no
assurances whatsoever concerning any possibility of any extension of the
Forbearance Period, any other forbearance or similar arrangement or any other
limitations on the exercise of their rights, remedies and privileges under or
otherwise in connection with the Indenture, the Intercreditor Agreement, the
Collateral Agreements and/or applicable law.

(e)           The
Company and the Subsidiaries acknowledge and agree that any forbearance, waiver
or consent which the Noteholders may make on or after the date hereof has been
made by the Noteholders in reliance upon, and in consideration for, among other
things, the general releases contained in Section 4 hereof and the other
covenants, agreements, representations and warranties of the Company and the
Subsidiaries hereunder.

2.             Effectiveness. 
This Agreement shall become effective on the first date (the “Forbearance
Effective Date”) on which each of the following conditions is satisfied and
evidence of its satisfaction has been delivered to counsel to the Noteholder
Group:

(a)           execution
and delivery by the Company and the Subsidiaries of the DDJ Forbearance
Agreement having a Forbearance Period that (subject to earlier termination upon
the occurrence and continuation of a Forbearance

 8
 

Default as defined therein) is through and including a date that is no
earlier than August 13,
2007, and is otherwise reasonably satisfactory in form and substance to
the Noteholder Group;

(b)           execution
and delivery by the Company of that certain letter, dated as of June 25,
2007 (the “Chanin Engagement Letter”), evidencing the Company’s
agreement to the Noteholder Group’s retention of Chanin Capital Partners L.L.C.
(“Chanin”), as its financial advisor, and to the Company’s payment of
Chanin’s fees, expenses and indemnity, as provided therein; and

(c)           execution
and delivery of counterparts of this Agreement by the Noteholders, the
Indenture Trustee, the Company and the Subsidiaries.

3.             Representations, Warranties and Covenants.  

(a)           The
Company and the Subsidiaries represent, warrant and covenant as follows:

(i)            Except for the Specified Existing
Defaults or as otherwise expressly provided herein, the Company is in
compliance with all of the terms and provisions set forth in the Indenture on
its part to be observed or performed, and no other Event of Default has
occurred and is continuing.

(ii)           The execution, delivery and
performance by the Company and the Subsidiaries of this Agreement:

(1)           are within their corporate or limited
partnership powers, as applicable;

(2)           have been duly authorized by all
necessary corporate or limited partnership action, as applicable, including the
consent of the holders of its equity interests where required;

(3)           do not and will not (A) contravene
their certificate of incorporation or by-laws or limited partnership or other
constituent documents, (B) violate any applicable requirement of law or any
order or decree of any governmental

 9
 

authority or
arbitrator applicable to them, (C) conflict with or result in the breach of, or
constitute a default under, or result in or permit the termination or
acceleration of, any contractual obligation of the Company or the Subsidiaries,
or (D) result in the creation or imposition of any lien or encumbrance upon any
of the property of the Company or the Subsidiaries; and

(4)           do not
and will not require the consent of, authorization by, approval of, notice to,
or filing or registration with, any governmental authority or any other entity,
other than those which prior to the Forbearance Effective Date will have been
obtained or made and copies of which prior to the Forbearance Effective Date
will have been delivered to counsel to the Noteholder Group and DDJ and each of
which on the Forbearance Effective Date will be in full force and effect.

(iii)           The Company and the Subsidiaries
shall not make any payments either directly, or indirectly through TWC Holding
LLC, to The Veritas Capital Fund II, L.P. and its general partner, Veritas
Capital Management II, L.L.C.

(iv)          Within five (5)
business days after the Forbearance Effective Date, the Company shall file this
Agreement and the DDJ Forbearance Agreement with the United States Securities
and Exchange Commission as an exhibit to a filing by the Company on Form 8-K
pursuant to the Securities and Exchange Act of 1934, as amended, which 8-K
filing and any accompanying press release shall be in form and substance
reasonably satisfactory to the Noteholders.

(v)           The Company and the
Subsidiaries shall immediately notify the Noteholders and the Indenture Trustee
upon its or their becoming aware of an Event of Default under the Indenture or
an Event of Default (as defined in the Loan Agreement) under the Loan Agreement
that is not a Specified Default (as defined in the DDJ Forbearance Agreement),
or an Anticipated Default.

(b)           The
Indenture Trustee represents as follows:

(i)            Based solely on the representations
provided by counsel to the Noteholder Group and DDJ, the Indenture Trustee
represents that, as of the date hereof, the Noteholders, in the aggregate, hold
not less than $100 million in principal amount of the Notes, representing not
less than 80% of the aggregate principal amount of the Notes outstanding.

 

 10

 

(c)           The representations and warranties
set forth in this Section 3 shall survive the execution and delivery of
this Agreement and the Forbearance Effective Date.

4.             General
Release.  In consideration of, among
other things, the Noteholders’ execution and delivery of this Agreement, the
Company and the Subsidiaries, on behalf of themselves and their successors and
assigns (collectively, the “Releasors”), hereby forever agree and
covenant not to sue or prosecute against the Releasees (as defined below) and hereby
forever waive, release and discharge to the fullest extent permitted by law,
each Releasee from, any and all claims (including, without limitation,
crossclaims, counterclaims, rights of set-off and recoupment), actions, causes
of action, suits, debts, accounts, interests, liens, promises, warranties,
damages and consequential and punitive damages, demands, agreements, bonds,
bills, specialties, covenants, controversies, variances, trespasses, judgments,
executions, costs, expenses or claims whatsoever (collectively, the “Claims”),
that such Releasor now has or hereafter may have, of whatsoever nature and
kind, whether known or unknown, whether now existing or hereafter arising,
whether arising at law or in equity, against the Noteholders in any capacity
and their affiliates, shareholders and “controlling persons” (within the
meaning of the federal securities law), and their respective successors and
assigns and each and all of the officers, directors, employees, agents,
attorneys, advisors, auditors, consultants and other representative of each of
the foregoing (collectively, the “Releasees”), based in whole or in part
on facts whether or not now known, existing on or before the Forbearance
Effective Date, that relate to, arise out of otherwise are in connection with
(i) any aspect of the business, operations, assets, properties, affairs or

 

 11
 

 

any other aspect of the Company or the Subsidiaries; (ii) any aspect of
the dealings or relationships between or among the Company and the
Subsidiaries, on the one hand, and the Noteholders, on the other hand, or (iii)
the Indenture or any transactions contemplated thereby or any acts or omissions
in connection therewith, provided, however, that the foregoing
shall not release the Noteholders from their express obligations under this
Agreement, the Indenture, the Intercreditor Agreement and the Collateral
Agreements.  In entering into this
Agreement, the Company and the Subsidiaries consulted with, and have been
represented by, legal counsel and expressly disclaim any reliance on any
representations, acts or omissions by any of the Releasees and the Company and
the Subsidiaries hereby agree and acknowledge that the validity and
effectiveness of the releases set forth herein do not depend in any way on any
such representations, acts and/or omissions or the accuracy, completeness or
validity hereof.  The provisions of this
Section 4 shall survive the expiration of the Forbearance Period and the
termination of this Agreement and payment in full of the Obligations.

5.             Ratification
of Liability.  The Company and the
Subsidiaries each hereby ratifies and reaffirms all of its Obligations  and its grant of liens on or security
interests in its properties pursuant to the Collateral Agreements to which it
is party as security for the Obligations, and confirms and agrees that such
liens and security interests hereafter secure all the Obligations.

6.             Complete
Integration; Amendments.  This
Agreement constitutes the full and final agreement between the Parties with
respect to the subject matter hereof, and it may not be modified or amended
except by a written instrument, signed by each of the Parties, expressing such
amendment or modification.  The Parties
warrant, promise

 

 12
 

 

and represent that in executing this Agreement, each Party is not
relying upon any oral representation, promise or statement made by any other
Party hereto and that each Party is not relying upon any promise, statement or
representation contained in any other written instrument.

7.             No
Other Amendments; Reservation of Rights, No Waiver.  Other than as otherwise expressly provided
herein, this Agreement shall not be deemed to operate as an amendment or waiver
of, or to prejudice, any right, power, privilege or remedy of the Noteholders
or the Indenture Trustee, as applicable, under the Indenture, the Intercreditor
Agreement, the Collateral Agreements or applicable law, nor shall the entering
into this Agreement preclude the Noteholders from refusing to enter into any
further amendments or forbearances with respect to the Indenture.  Other than as expressly provided herein, this
Agreement shall not constitute a forbearance with respect to (i) any failure by
the Company to comply with any covenant or other provision in the Indenture or
(ii) the occurrence or continuance of any present or future Event of Default.

8.             No
Impairment of Lender’s Rights.  The
Noteholder Group, the Company and the Subsidiaries acknowledge and agree that
nothing contained in this Agreement nor the execution of this Agreement by DDJ
shall impair in any way nor shall be deemed to impair in any way any rights of
Lender or any affiliates of Lender arising under or related to the Loan
Agreement, the other Loan Documents (as defined in the Loan Agreement), the DDJ
Forbearance Agreement, the Intercreditor Agreement or otherwise.  All rights of Lender or any affiliate of
Lender arising under or related to the Loan Agreement, the other Loan Documents
(as defined in the Loan Agreement), the

 

 13
 

 

DDJ Forbearance Agreement, the Intercreditor Agreement or otherwise are
expressly reserved.

9.             Counterparts/Facsimile
Transmission.  This Agreement may be
signed in counterparts, each of which, when taken together, shall be deemed an
original.  Execution of this Agreement is
effective if a signature is delivered by facsimile transmission.

10.           Successors
and Assigns.  This Agreement shall be
binding upon and inure to the benefit of the Parties hereto and each of their
respective successors, assigns, heirs and personal representatives.

11.           Authority.  Any person signing this Agreement in a
representative capacity (i) represents and warrants that he/she is
authorized to sign this Agreement on behalf of the Party he/she represents and
that his/her signature upon this Agreement will bind the represented Party to
the terms of this Agreement, and (ii) acknowledges that the other Party to
this Agreement has relied upon such representation and warranty.

12.           Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
without regard to its choice of law provisions.

13.           Remedies.  All Parties hereto agree that irreparable
damage would result from any Party’s breach of this Agreement, and further
agree that a non-breaching Party would have no adequate remedy at law to
redress such breach.  Therefore, the
Parties hereto agree that, in the event of a breach of this Agreement, specific
performance and/or injunctive relief is appropriate to remedy such breach.  Notwithstanding the foregoing, nothing
contained in this Section 13 shall be deemed a waiver by any non-

 

 14
 

 

breaching Party hereto of any other remedies available at law to
redress any other Party’s breach of this Agreement.  Each of the rights and powers provided
pursuant to this Agreement shall be cumulative and in addition to and not in
derogation of the rights and powers otherwise available under applicable law to
the Parties.

14.           Direction
to Indenture Trustee.  The
Noteholders’ agreement to forbear as provided herein shall constitute a
direction from such Noteholders to the Indenture Trustee to similarly forbear
during the Forbearance Period.  In order
to induce the Indenture Trustee to accept such direction, the Company and the
Subsidiaries agree (a) that the Indenture Trustee, as an ex  officio
participant of the Noteholder Group, may receive the copies of all information
and participate in the negotiations referenced in subsections (A) and (B) of
the definition of Forbearance Default in Section 1(b) hereof, and (b) to pay,
in accordance with the terms of the Indenture, the reasonable fees and expenses
of the Indenture Trustee incurred during the Forbearance Period promptly on a
monthly basis.

 

 15

 

IN WITNESS WHEREOF, each
of the Parties hereto has caused this Agreement to be duly executed and
delivered as of the date first above written.

 

	
  

  	
  THE WORNICK COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jon Geisler

  	
   

  
	
   

  	
  Name:

  	
  Jon Geisler

  
	
   

  	
  Title:

  	
  President & CEO

  
	
   

  	
  Fax:

  	
  (513) 552-7604

  
					

 

 

	
  

  	
  SUBSIDIARIES

  
	
   

  	
   

  
	
   

  	
  RIGHT AWAY
  MANAGEMENT CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jon Geisler

  	
   

  
	
   

  	
  Name:

  	
  Jon Geisler

  
	
   

  	
  Title:

  	
  President & CEO

  
	
   

  	
  Fax:

  	
  (513) 552-7604

  
					

 

 

	
  

  	
  THE WORNICK
  COMPANY RIGHT AWAY

  
	
   

  	
  DIVISION 

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jon Geisler

  	
   

  
	
   

  	
  Name:

  	
  Jon Geisler

  
	
   

  	
  Title:

  	
  President & CEO

  
	
   

  	
  Fax:

  	
  (513) 552-7604

  
					

 

 

	
  

  	
  THE WORNICK COMPANY RIGHT AWAY

  
	
   

  	
  DIVISION L.P.

  
	
   

  	
   

  
	
  

  	
  By:

  	
  /s/ Jon Geisler

  	
   

  
	
   

  	
  Name:

  	
  Jon Geisler

  
	
   

  	
  Title:

  	
  President & CEO

  
	
   

  	
  Fax:

  	
  (513) 552-7604

  
					

 

 

	
  

  	
  THE NOTEHOLDERS

  
	
   

  	
   

  
	
   

  	
  AIG GLOBAL INVESTMENT CORP.

  
	
   

  	
  as investment adviser and/or subadviser

  
	
   

  	
  for various funds and accounts

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bryan Petermann

  	
   

  
	
   

  	
  Name:

  	
  Bryan Petermann

  
	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  QUADRANGLE DEBT RECOVERY ADVISORS LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew Herenstein

  	
   

  
	
   

  	
  Name:

  	
  Andrew Herenstein

  
	
   

  	
  Title:

  	
  Managing Principal

  
	
   

  	
  Fax:

  	
  (866) 741-2505

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CSAM Funding I

  
	
   

  	
  CSAM Funding II

  
	
   

  	
  CSAM Funding III

  
	
   

  	
  CSAM Funding IV

  
	
   

  	
  Atrium CDO

  
	
   

  	
  Atrium II

  
	
   

  	
  Atrium III

  
	
   

  	
  Atrium IV

  
	
   

  	
  Castle Garden Funding

  
	
   

  	
  Credit Suisse Syndicated Loan Fund

  
	
   

  	
  Madison Park Funding I, Ltd.

  
	
   

  	
  CS High Yield Focus CBS, Ltd.

  
	
   

  	
  Atrium V

  
	
   

  	
  By: Credit Suisse Alternative Capital, Inc.,
  as

  collateral manager

  
	
   

  	
  Madison Park Funding II, Ltd.

  
	
   

  	
  By: Credit Suisse Alternative Capital, Inc.,
  as

  collateral manager

  
	
   

  	
  Madison Park Funding III, Ltd.

  
	
   

  	
  By: Credit Suisse Alternative Capital, Inc.,
  as

  collateral manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas Flannery

  	
   

  
	
   

  	
  Name:

  	
  Thomas Flannery

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
  Fax:

  	
  (212) 538-8290

  
					

 

 

 

	
   

  	
  B IV CAPITAL PARTNERS, L.P.

  
	
   

  	
   

  
	
   

  	
  By: GP Capital IV, LLC, its General Partner

  
	
   

  	
  By: DDJ Capital Management, LLC, Manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Breazzano

  	
   

  
	
   

  	
  Name:

  	
  David J. Breazzano

  
	
   

  	
  Title:

  	
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DDJ HIGH YIELD FUND

  
	
   

  	
   

  
	
   

  	
  By: DDJ Capital Management, LLC,

  
	
   

  	
  its attorney-in-fact

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Breazzano

  	
   

  
	
   

  	
  Name:

  	
  David J. Breazzano

  
	
   

  	
  Title:

  	
  Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GMAM INVESTMENT FUNDS TRUST II, for the

  
	
   

  	
  account of the Promark Alternative High Yield Bond

  
	
   

  	
  Fund (Account No. 7M2E)

  
	
   

  	
   

  
	
   

  	
  By: DDJ Capital Management, LLC, on behalf

  
	
   

  	
  of GMAM Investment Funds Trust II, for the

  
	
   

  	
  account of the Promark Alternative High Yield

  
	
   

  	
  Bond Fund, in its capacity as investment manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Breazzano

  	
   

  
	
   

  	
  Name:

  	
  David J. Breazzano

  
	
   

  	
  Title:

  	
  Member

  
					

 

 

 

	
  

  	
  GMAM INVESTMENT FUNDS TRUST

  
	
   

  	
   

  
	
   

  	
  By: DDJ Capital Management, LLC,

  
	
   

  	
  on behalf of GMAM Investment

  
	
   

  	
  Funds Trust, in its capacity as

  
	
   

  	
  investment manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Breazzano

  	
   

  
	
   

  	
  Name:

  	
  David J. Breazzano

  
	
   

  	
  Title:

  	
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GENERAL MOTORS WELFARE BENEFIT TRUST (VEBA)

  
	
   

  	
   

  
	
   

  	
  By:  State
  Street Bank and Trust Company, solely in its capacity as

  
	
   

  	
  Trustee for General Motors Welfare Benefit Trust
  (VEBA)

  
	
   

  	
  as directed by DDJ Capital Management, LLC, and not
  in its individual

  
	
   

  	
  capacity

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Breazzano

  	
   

  
	
   

  	
  Name:

  	
  David J. Breazzano

  
	
   

  	
  Title:

  	
  Member

  
	
   

  	
  Fax:

  
	
   

  	
   

  
	
   

  	
  GMAM INVESTMENT FUNDS TRUST II, for the account of
  the

  
	
   

  	
  Promark Alternative High Yield Bond Fund (Account
  No. 7MWD)

  
	
   

  	
   

  
	
   

  	
  By: DDJ Capital Management, LLC,

  
	
   

  	
  on behalf of GMAM Investment

  
	
   

  	
  Funds Trust II for the account of the Promark

  
	
   

  	
  Alternative High Yield

  
	
   

  	
  Bond Fund, in its capacity as investment manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Breazzano

  	
   

  
	
   

  	
  Name:

  	
  David J. Breazzano

  
	
   

  	
  Title:

  	
  Member

  
					

 

 

	
  

  	
  DDJ CAPITAL MANAGEMENT GROUP TRUST

  
	
   

  	
   

  
	
   

  	
  By:  DDJ
  Capital Management, LLC, Investment Manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Breazzano

  	
   

  
	
   

  	
  Name:

  	
  David J. Breazzano

  
	
   

  	
  Title:

  	
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  STICHTING PENSIOENFONDS HOOGOVENS

  
	
   

  	
   

  
	
   

  	
  By:  DDJ
  Capital Management, LLC, on

  
	
   

  	
  behalf of Stichting Pensioenfonds Hoogovens,

  
	
   

  	
  in its capacity as Manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Breazzano

  	
   

  
	
   

  	
  Name:

  	
  David J. Breazzano

  
	
   

  	
  Title:

  	
  Member

  
	
   

  	
   

  
	
   

  	
  THE OCTOBER FUND, LIMITED
  PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  By: October G.P., LLC, its
  General Partner

  
	
   

  	
  By:  DDJ Capital Management, LLC, Manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Breazzano

  	
   

  
	
   

  	
  Name:

  	
  David J. Breazzano

  
	
   

  	
  Title:

  	
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DDJ/ONTARIO CREDIT OPPORTUNITIES FUND, L.P.

  
	
   

  	
   

  
	
   

  	
  By:  GP
  DDJ/Ontario Credit Opportunities, L.P., its General Partner

  
	
   

  	
  By:  GP Credit
  Opportunities, Ltd., its General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Breazzano

  	
   

  
	
   

  	
  Name:

  	
  David J. Breazzano

  
	
   

  	
  Title:

  	
  Director

  
					

 

 

	
  

  	
  MULTI-STYLE, MULTI-MANAGER FUNDS PLC

  
	
   

  	
  THE GLOBAL HIGH YIELD FUND

  
	
   

  	
   

  
	
   

  	
  By:  DDJ
  Capital Management, LLC, on

  
	
   

  	
  behalf of Multi-Style, Multi-Manager Funds PLC,

  
	
   

  	
  The Global High Yield Fund, in its capacity as

  
	
   

  	
  Money Manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Breazzano

  	
   

  
	
   

  	
  Name:

  	
  David J. Breazzano

  
	
   

  	
  Title:

  	
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
  DDJ TOTAL RETURN LOAN FUND, L.P.

  
	
   

  	
   

  
	
   

  	
  By:  GP Total
  Return, LP, its General Partner

  
	
   

  	
  By:  GP Total
  Return, LLC, its General Partner

  
	
   

  	
  By:  DDJ
  Capital Management, LLC, Manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Breazzano

  	
   

  
	
   

  	
  Name:

  	
  David J. Breazzano

  
	
   

  	
  Title:

  	
  Member

  
					

 

 

	
  AGREED TO AND ACKNOWLEDGED

  	
   

  	
   

  
	
  BY THE INDENTURE TRUSTEE

  	
   

  	
   

  
	
  (SOLELY WITH RESPECT TO

  	
   

  	
   

  
	
  SECTIONS 3(B)(I)

  	
   

  	
   

  
	
  (REPRESENTATION, WARRANTIES

  	
   

  	
   

  
	
  AND COVENANTS) AND 14

  	
   

  	
   

  
	
  (DIRECTION TO

  	
   

  	
   

  
	
  INDENTURE TRUSTEE)):

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Lawrence J. Bell

  	
   

  	
   

  
	
  Name:

  	
  Lawrence J. Bell

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
   

  
	
  Fax:

  	
  (503) 275-5738

  	
   

  	
   

  
							

 

Schedule A

SPECIFIED EXISTING
DEFAULTS

1.             The Issuer’s failure to make an
Excess Cash Flow Offer as required by Section 4.22 of the Indenture for the
fiscal years ended December 31, 2004, and December 31, 2005.

2.             The Issuer’s failure to deliver
certain annual financial statements as required by Section 4.3 of the Indenture
for the fiscal year ended December 31, 2006.

3.             The Issuer’s failure to deliver the
compliance certificate required by Section 4.4(a) of the Indenture in respect
of the Company’s fiscal year ended December 31, 2006.

4.             The Issuer’s failure to deliver any
compliance certificate required by Section 4.4(b) of the Indenture in respect
of a Specified Existing Default.

ANTICIPATED DEFAULTS

1.             The Issuer’s failure to deliver
certain quarterly financial statements for the fiscal quarters ended March 31,
2007 and June 30, 2007.

2.             The Issuer’s failure to make the
scheduled interest payment due under the Notes on July 15, 2007.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:

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