Document:

ex10_7.htm

    
      

    

    Exhibit
10.7

    

    

    August
12, 2008

    

    

    Charles
D. Haley, Esq.

    1674
Anamor Street

    Redwood
City, CA 94061

    

    Re:  Offer

    

    Dear
Charley:

    

    I am
pleased to offer you the position of Senior Vice President and General Counsel
of Symyx Technologies, Inc., reporting to Rex Jackson. You will receive a
monthly salary of $20,834.00, which will be paid semi-monthly in accordance with
Symyx’s normal payroll procedures, less applicable withholding taxes. In
addition, based upon achievement of company financial objectives and of
individual goals we will define together, you will be eligible to receive an
on-target annual bonus of 30% of your annual salary earned in fiscal 2008. Your
participation in this plan is subject to the terms of the bonus plan, including
that you must be an employee at the time the bonus is paid in order to receive
the bonus.

    

    In addition, subject to approval by
Symyx’s Board of Directors or its appropriately appointed committee or designee,
you will be granted an option to purchase 30,000 shares of Symyx common stock
priced at the closing sale price of our common stock on the date of grant. These
stock options will be governed by the 2007 Symyx Technologies, Inc. Stock
Incentive Plan and the applicable stock option agreement, and will vest 20% on
the first anniversary of your date of hire, 40% on the second anniversary, and
40% on the third (subject to your continued employment through these
dates).

    

    As a Symyx employee, you are eligible
to receive certain employee benefits. Please review the enclosed Benefits
Summary which summarizes our current benefits offering. You should note that
Symyx may modify its compensation and benefits from time to time as it deems
necessary, including, without limitation, the ability to amend and terminate
such plans at any time.

    

    You
should be aware that your employment with Symyx is not for a specified period
and is at will. As a result, you are free to resign at any time, for any or no
reason.  Similarly, Symyx is free to conclude its employment
relationship with you at any time, with or without cause, and with or without
notice; provided, however, that you will be entitled to severance benefits under
certain circumstances as described in Attachment
A.

     

    Symyx
reserves the right to conduct background investigations and/or reference checks
on all of its potential employees.  Your job offer, therefore, is
contingent upon a clearance of such a background investigation and/or reference
check, if any.

    

    For
purposes of federal immigration law, you will be required to provide to Symyx
documentary evidence of your identity and eligibility for employment in the
United States.  Such documentation must be provided to us within three
business days of your date of hire, or our employment relationship with you may
be terminated.

    
      
         

      

      
        1.

        
          

        

      

      
         

      

    

     

    Charles Haley, Esq.

    August 12, 2008

    Page 2 of 2

     

    You agree
that during the term of your employment with Symyx you will not engage in any
other employment, occupation, consulting or business activity directly related
to the business in which Symyx is now involved or becomes involved during the
term of your employment, nor will you engage in any other activities that
conflict with your obligations to Symyx.  As a Symyx employee, you
will be expected to sign and comply with the enclosed At-Will, Confidential
Information, Invention Assignment and Arbitration Agreement, which requires
(among other things) the assignment of patent rights to any invention made
during your employment at Symyx and non-disclosure of proprietary
information.

    

    To
indicate your acceptance of Symyx’s offer, please sign and date this letter in
the space provided below and return it to me, along with the signed code of
conduct and confidentiality agreement.  A duplicate original is
enclosed for your records.  This offer of employment expires
August 18, 2008 unless
accepted prior to that date. This letter, along with the agreement
relating to proprietary rights between you and Symyx, set forth the terms of
your employment with Symyx and supersedes any prior representations and/or
agreements, whether written or oral. This letter may not be modified or amended
except by a written agreement, signed by an officer of Symyx and by
you.

    

    We look
forward to working with you at Symyx.

    

    Sincerely,

    

    
      
        
          	 
      	
                  /s/ Rex S. Jackson

                
	 
      	
                  Rex
      S. Jackson

                
	 
      	
                  Executive
      Vice President,

                
	 
      	
                  Chief
      Financial Officer

                

        

      

    

    

    ACCEPTED
AND AGREED TO this

    
      
        
          
            
              	
                      13th

                    	
                        
      day of August, 2008.

                    	 
      
	 
      	 
      	 
      
	
                      By:

                    	
                      /s/Charles D. Haley

                    	 
      
	
                      Start
      date:

                    	
                      September 8, 2008

                    	 
      

            

          

        

      

    

    

    

    Enclosures

    
      
         

      

      
        2.

        
          

        

      

      
         

      

    

    ATTACHMENT
A

     

    SYMYX TECHNOLOGIES,
INC.

     

    EXECUTIVE CHANGE IN CONTROL AND
SEVERANCE BENEFIT TERMS

     

    
      	
              1.

            	
              Introduction.

            

    

     

    The Change in Control and Severance
Benefit terms below supplement the offer letter dated as of August 12, 2008 from
Symyx Technologies, Inc. to Charles D. Haley (“Participant”) to which these terms are
attached.

     

    
      	
              2.

            	
              Definitions.

            

    

     

    The following terms are defined as
follows:

     

    (a)           “Base
Salary” means Participant’s
annual base pay (excluding incentive pay, premium pay, commissions, overtime,
bonuses and other forms of variable compensation), at the rate in effect during
the last regularly scheduled payroll period immediately preceding the
Participant’s Covered Termination date.

     

    (b)           “Monthly
Base Salary” means
Participant’s Base Salary divided by twelve (12).

     

    (c)           “Board” means the Board of Directors of Symyx
Technologies,
Inc.

     

    (d)           
“Change in Control” means
the occurrence of any of the following:

     

    (i)   the Company’s
shareholders’ approve a plan of complete liquidation of the Company or of an
agreement for the sale or disposition of all or substantially all of the
Company's assets;

    

    (ii)     the
Company’s shareholders approve a merger or consolidation of the Company with any
other corporation, other than a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than fifty percent (50%) of
the total voting power represented by the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation;

    

    (iii)    any
"person" (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) becomes the "beneficial owner" (as defined in
Rule 13d-3 under said Act), directly or indirectly, of thirty percent (30%) or
more of the Company's then outstanding voting securities; or

    

    (iv)     a
change in the composition of the Board, as a result of which fewer than
sixty-six percent (66%) of the directors are elected, or nominated for election,
to the Board with the affirmative votes of at least a majority of those
directors whose election or nomination was not in connection with any
transactions described in subsections (i), (ii) or (iii), or in connection with
an actual or threatened proxy contest relating to the election of Company
directors.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (f) 
“Change in Control Termination” means a Covered Termination occurring
within the period commencing three (3) months prior to a Change in Control and
ending twelve (12) months after the Change in Control.   

     

    (g)           “COBRA”
means the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended.

     

    (h)           “Code” means the Internal Revenue Code of 1986,
as amended.

     

    (i)           “Company” means Symyx Technologies, Inc., or any
successor entity thereto.

     

    (j)           “Constructive
Termination” means
Participant’s resignation
of employment that
constitutes a “separation from service” under Treas. Reg. Sections 1.409A-1(h)
within ninety (90) days
after one of the following occurs without the Participant’s express written
consent: 

     

    (i)    
        the Company reduces the Participant’s
base  compensation;

     

    (ii)   
        the Company materially reduces the Participant’s
authority, duties or responsibilities, but only if such reduction of authority,
duties or responsibilities occurs with the period commencing three (3) months
prior to a Change in Control and ending twelve(12) months following such Change
in Control;
or

     

    (iii)           the Company relocates the Participant’s
primary business office more than fifty (50) miles from the location at which the
Participant predominately performed duties prior to such relocation, except for
required Participant travel on Company business to an extent substantially
consistent with the Participant’s prior business travel
obligations.

     

    Notwithstanding the foregoing, a
termination shall not constitute a Constructive Termination based on conduct
described above unless (A) within thirty (30) days following the occurrence of
the conduct, the Participant provides the Company’s Chief Executive Officer
written notice specifying (x) the particulars of the conduct and (y) that the
Participant deems such conduct to be described in (i), (ii) or (iii) of this
Section 2(j), and (B) the conduct described has not
been cured within thirty (30) days following receipt by the Company’s Chief
Executive Officer of such notice.

     

    (k)           “Coverage
Period” means six (6) months.

     

    (l)           “Covered
Termination” means either
(A) an Involuntary Termination Without Cause or (B) a Constructive
Termination.  Termination of employment of a Participant due to death
or disability shall constitute a Covered Termination unless the Company’s
termination of Participant’s employment immediately prior to the Participant’s
death or disability would not have qualified as an Involuntary Termination
Without Cause.

     

    (m)           “Disability” means either (A) the Participant is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than twelve
(12) months; or (B) the Participant, by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months,
receives income replacement benefits for a period of note less than three (3)
months under an accident and health paln covering employees of the Participant’s
employer.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (n)           
“Entity” means a
corporation, partnership, limited liability company or other
entity.

     

    (o)            “Involuntary
Termination Without Cause”
means a termination by the Company of a Participant’s employment relationship
that constitutes a
“separation from service” under Treas. Reg. Sections 1.409A-1(h) for any reason other than the
Participant:

     

    (i)       
     willfully refuses to perform in any
material respect the Participant’s duties or responsibilities for the Company or
willfully disregards in any material respect any financial or other budgetary
limitations established in good faith by the Board;

     

    (ii)     
      engages in conduct that
causes, or is reasonably likely to cause,
material and demonstrable injury, monetarily or otherwise, to the Company,
including, but not limited to, misappropriation or conversion of Company assets
(other than non-material assets); or

     

    (iii)           engages in an act of moral turpitude or
conviction of or entry of a plea of nolo contendere to a
felony.

     

    No Participant act or failure to act
shall be deemed “willful” if done, or omitted to be done, in good faith and with
the reasonable belief that the action or omission was in the best interest of
the Company.  For the avoidance of doubt, a transfer of employment of
a Participant from the Company or one of its Subsidiaries to the Company, one of
its Subsidiaries or an Entity that acquires control of the Company shall not be
deemed an Involuntary Termination Without Cause; however, depending on the facts
and circumstances, such a transfer of employment may, in conjunction with a
resignation by the Participant, result in a Constructive
Termination.

     

    (p)           
“Equity Interest” means an
option to purchase any equity security of the Company, restricted stock awards,
restricted stock units, or other economically similar equity awards with respect
to the equity of the Company.

     

    (q)           “Own,” “Owned,” “Owner,” “Ownership” A person or Entity shall be deemed to
“Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of
securities if such person or Entity, directly or indirectly, through any
contract, arrangement, understanding, relationship or otherwise, is the
beneficial owner of such securities.   For example, a holder of
stock of a corporation (the “direct corporation”) is deemed to Own such stock
and to Own a pro rata portion (based on relative holdings of the stock of the
direct corporation) of any stock of any other corporation Owned by the direct
corporation.

     

    (r)           
“Subsidiary” means (A) any
corporation of which more than fifty percent (50%) of the outstanding capital
stock having ordinary voting power to elect a majority of the board of directors
of such corporation (irrespective of whether, at the time, stock of any other
class or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time, directly or
indirectly, Owned by the Company, and (B) any partnership or limited liability
company in which the Company has a direct or indirect interest (whether in the
form of voting or participation in profits or capital contribution) of more than
fifty percent (50%).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              3.

            	
              Eligibility For
      Benefits.

            

    

     

    (a)           General
Rules. Participant will not
receive benefits hereunder his employment terminates or is terminated for any
reason other than a Covered Termination.  Subject to the limitations set forth in
this Section 3 and Section 5, in the event of a Covered Termination,
the Company shall provide the severance benefits described in
Section 4 to Participant.

     

    (b)           Termination or Return
of Benefits.  If
a Covered Termination occurs following a Change in Control,
Participant’s right to
receive benefits shall terminate immediately (and any benefits received pursuant
to this Plan shall be immediately returned to the Company) if, at any time prior
to or during the period
ending on the earlier of
the date on which the Participant ceases to be receiving benefits hereunder or the date that is eighteen (18)
months following such Change in Control, the Participant, without the prior
written approval of the Plan Administrator:

     

    (i)        
    willfully breaches a material provision
of the Participant’s proprietary information or confidentiality agreement with
the Company;

     

    (ii)       
    encourages or solicits any of the
Company’s then current employees to leave the Company’s employ for any reason or
interferes in any other manner with employment relationships at the time
existing between the Company and its then current employees; or

     

    (iii)           induces any of the Company’s then
current clients, customers, suppliers, vendors, distributors, licensors,
licensees or other third party to terminate or materially diminish their
existing business relationship with the Company or interferes in any other
manner with any existing business relationship between the Company and any then
current client, customer, supplier, vendor, distributor, licensor, licensee or
other third party.

     

    
      	
              4.

            	
              Amount of
      Benefits.

            

    

     

    If Participant incurs a Covered Termination, Participant shall receive the benefits
in this Section 4, subject, however, to the payment
provisions in Section 6 and the other limitations and
exclusions set forth herein.

     

    (a)           Cash Severance
Benefits.  The
Company shall make monthly cash severance payments to Participant in an amount
equal to Participant’s Monthly Base Salary.  Such payments shall
continue for the Coverage Period.  

     

    (b)           Health Continuation
Coverage.

     

    (i)         
   Provided
Participant is eligible for, and has made an election at the time of the Covered
Termination pursuant to COBRA under a Company-sponsored health, dental, or
vision plan, the Company shall continue to pay the amount of the COBRA premiums
(inclusive of premiums for the Participant’s dependents) for such health,
dental, or vision plan coverage as in effect immediately prior to the date of
the Covered Termination necessary to maintain such health, dental, or vision
plan coverage for a period equal to the Participant’s Coverage Period; provided,
however, that such payments by the Company shall cease as of the date upon which
the Participant and the Participant’s dependents, if any, are covered by similar
plans of a new employer.  Except as provided in this paragraph, at all
times the Participant shall be solely responsible for all health costs of the
Participant and any dependents of the Participant including any coverage
pursuant to COBRA.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (ii)  
         For purposes of this
Section 4(b), (A) references to COBRA shall be
deemed to refer also to analogous provisions of state law, and (B) any
applicable insurance premiums that are paid by the Company shall not include any
amounts payable by
Participant under an
Internal Revenue Code Section 125 health care reimbursement plan, which amounts,
if any, are the sole responsibility of Participant.

     

    (c)           Vesting
Acceleration.  If
the Covered Termination is a Change in Control Termination, then effective upon the Change in Control
Termination,

     

    (i)      
      the vesting, exercisability and
repurchase provisions for Time-vesting Equity Interests (as defined below) shall
first be converted to daily accrual.  For example, if an option vests
(i.e., becomes exercisable) in installments at the rate of 25% per year from the
date of grant, the vesting schedule for such Option shall automatically change
to 25%/365 per day from the date of grant.

     

    (ii)           the vesting and exercisability of any
outstanding Time-vesting Equity Interests that Participant holds on such date
and are not exercisable and vested in full after the application of Section
4(c)(i) shall immediately accelerate and become vested and exercisable for that
number of shares subject thereto with respect to which such Equity Interests
would have become, after the application of Section 4(c)(i), vested and
exercisable over the twenty-four (24) month period following the
Participant’s Change in Control Termination.  “Time-vesting Equity
Interests” include only those interests that vest based solely on the passage of
time and Participant’s continuation of services for the Company and do not
otherwise require the achievement of certain goals or milestones as a condition
of vesting.  If an Equity Interest includes both time-vesting and
other vesting criteria, the provisions of this Section 4(c) shall apply to the time-vesting
component only.

     

    (iii)           any reacquisition or repurchase rights
held by the Company after the application of Section 4(c)(i) to reacquire from
the Participant any equity security of the Company Participant holds shall lapse
(i.e., the equity security shall vest in the
Participant pursuant to time-vesting) to the extent such equity security was
scheduled to vest, after the application of Section 4(c)(i), pursuant to
time-vesting (i.e., such reacquisition or repurchase
rights were scheduled to lapse) in the twelve (12) month period following the
Participant’s Change in Control Termination.

     

    (iv)           Notwithstanding the provisions of this
Section 4(c), if the provisions of this
Section 4(c) regarding acceleration of vesting would
adversely affect a Participant’s Equity Interests (including, without
limitation, its status as an incentive stock option under Section 422 of the
Code or result in an Equity Interest that would not otherwise be deemed to be a
nonqualified deferred compensation plan or arrangement for the purposes of
Section 409A of the Code to be deemed to be such a nonqualified deferred
compensation plan or arrangement) that is outstanding on the date the
Participant commences participation in the Plan, such acceleration of vesting
shall be deemed null and void as to such Equity Interest unless the affected
Participant consents in writing to such acceleration of vesting as to such
Equity Interest within thirty (30) days after becoming a Participant under the
Plan.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (d)           Other Employee
Benefits.  All
other benefits (such as life insurance, disability coverage, and 401(k) plan
coverage) shall terminate as of Participant’s termination date (except to the
extent that a conversion privilege may be available
thereunder).

     

    
      	
              5.

            	
              Limitations on
      Benefits.

            

    

     

    (a)           Release.  In order to be eligible to
receive benefits hereunder, Participant must execute a general
waiver and release in a form reasonably acceptable to the Company,
and such release must become effective in accordance with its terms.

     

    (b)           Certain
Reductions.  The
Company, in its sole discretion,
shall have the authority to
reduce Participant’s
severance benefits hereunder, in whole or in part, by the amount of any other
severance benefits, pay in lieu of notice, or other similar benefits payable to
Participant by the Company that become payable in connection with Participant’s termination of employment
pursuant to (i) any applicable legal requirement, including, without limitation,
the Worker Adjustment and Retraining Notification Act (the “WARN
Act”), or (ii) any Company policy or practice
providing for the Participant to remain on the payroll for a limited period of
time after being given notice of the termination of the Participant’s
employment.  The benefits provided hereunder are intended to satisfy, in whole
or in part, any and all statutory obligations that may arise out of
Participant’s termination
of employment.

     

    (c)           Parachute
Payments.  Except
as otherwise provided in an agreement between Participant and the Company, if any
payment or benefit the Participant would receive in connection with a Change in
Control from the Company or otherwise (“Payment”) would (i) constitute a “parachute
payment” within the meaning of Section 280G of the Code, and (ii) but for this
sentence, be subject to the excise tax imposed by Section 4999 of the Code (the
“Excise
Tax”), then such Payment
shall be equal to the Reduced Amount.  The “Reduced Amount” shall be
either (x) the largest portion of the Payment that would result in no portion of
the Payment being subject to the Excise Tax, or (y) the largest portion, up to
and including the total, of the Payment, whichever amount, after taking into
account all applicable federal, state and local employment taxes, income taxes,
and the Excise Tax (all computed at the highest applicable marginal rate),
results in the Participant’s receipt, on an after-tax basis, of the greater
amount of the Payment notwithstanding that all or some portion of the Payment
may be subject to the Excise Tax. If a reduction in payments or benefits
constituting “parachute payments” is necessary so that the Payment equals the
Reduced Amount, reduction shall occur in the following order unless the
Participant elects in writing a different order (provided, however, that such
election shall be subject to Company approval if made on or after the date on
which the event that triggers the Payment occurs): (1) reduction of cash
payments; (2) cancellation of accelerated vesting of equity awards other than
stock options; (3) cancellation of accelerated vesting of stock options; and (4)
reduction of other benefits
paid to Participant. If
acceleration of vesting of
compensation from Participant’s equity awards is to be
reduced, such acceleration of vesting shall be cancelled by first canceling such
acceleration for the vesting installment that will vest last and continuing by
canceling as a first priority such acceleration for vesting installment
with the latest vesting
unless Participant elects
in writing a different order for cancellation prior to any Change in
Control.

     

    (d)           Mitigation.  Except as otherwise
specifically provided herein, Participant shall not be required to mitigate
damages or the amount of any payment provided under this Plan by seeking other
employment or otherwise, nor shall the amount of any payment provided for under
this Plan be reduced by any
compensation earned by Participant as a result of employment by
another employer or any retirement benefits received by Participant after the date of Participant’s Covered Termination,
except for health continuation coverage provided pursuant to
Section 4(b).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (e)           Non-Duplication of
Benefits.  Except
as otherwise specifically provided for herein, Participant is not eligible to receive benefits under this
Plan more than one time.  The payments pursuant to these terms are in addition to, and not in lieu of,
any unpaid salary, bonuses
or benefits to which
Participant may be entitled for the period ending with the Participant’s Covered
Termination.

     

    
      	
              6.

            	
              Time of Payment and Form Of
      Benefits.

            

    

     

    (a)           General
Rules.  Except as
otherwise provided herein, benefits in Section 4 shall be paid in accordance with and
subject to the Company’s normal payroll practices.  In no event shall
payment of any benefit be made prior to the Participant’s termination date or
prior to the effective date of the release described in
Section 5(a).  For the avoidance of doubt,
in the event of an acceleration of the exercisability of an option or other
Equity Interest pursuant to Section 4(c), such acceleration shall not be
effective until the effective date of the release described in
Section 5(a).  Notwithstanding the
provisions of Section 4 and this Section 6(a) regarding the timing of the payment of
benefits, if the Company or any Entity that acquires control of the Company
pursuant to a Change in Control is in breach of its obligations to Participant
or otherwise refuses to comply with its obligations hereunder with respect to
Participant, all benefits due Participant shall be immediately due and payable
on the later of (i) the date of such breach or refusal or (ii) the date of
Participant’s Covered Termination.

     

    (b)            Application of
Section 409A.  If
the Company determines that (i) any cash severance
benefit provided under Section 4(a), or (ii) any health continuation coverage
provided under Section 4(b) fails to satisfy the distribution
requirement of Section 409A(a)(2)(A) of the Code as a result of the application
of Section 409A(a)(2)(B)(i) of the Code, the payment of such benefit shall be
accelerated to the minimum extent necessary so that the benefit is not subject
to the provisions of Section 409A(a)(1) of the Code.  (It is the
intention of the preceding sentence to apply the short-term deferral provisions
of Section 409A of the Code, and the regulations and other guidance thereunder,
to such payments and benefits.  The payment schedule as revised after
the application of such preceding sentence shall be referred to as
the
“Revised Payment Schedule.”)  However, if there is no
Revised Payment Schedule that would avoid the application of Section 409A(a)(1)
of the Code, the payment of such benefits shall not be paid pursuant to the
original payment schedule or a Revised Payment Schedule and instead the payment
of such benefits shall be delayed to the minimum extent necessary so that such
benefits are not subject to the provisions of Section 409A(a)(1) of the
Code.  The Plan Administrator may attach conditions to or adjust the
amounts paid pursuant to this Section 6(b) to preserve, as closely as possible,
the economic consequences that would have applied in the absence of this
Section 6(b); provided,
however, that no such
condition shall result in the payments being subject to Section 409A(a)(1) of
the Code.

     

    (c)           Withholding.  All payments under the Plan
will be subject to all applicable withholding obligations of the Company,
including, without limitation, obligations to withhold for federal, state and
local income and employment taxes.

     

    (d)           Indebtedness of
Participants.  If
Participant is indebted to the Company on
the effective date of his
Covered Termination, the
Company reserves the right to offset any
severance payments hereunder by the amount of such
indebtedness.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              7.

            	
              Re-employment.

            

    

     

    If the Company re-employs Participant during the Coverage Period, the Company may in its sole and absolute discretion
require Participant to repay to the Company and/or waive all or a portion of the
benefits paid or otherwise payable hereunder as a condition of
re-employment.  Participant’s refusal to accept re-employment on such
terms and conditions shall not affect Participant’s entitlement to benefits paid
or payable as a result of Participant’s earlier termination or
resignation.

     

    
      	
              8.

            	
              Right To
      Interpret.

            

    

     

    The Company shall have the exclusive
discretion and authority to establish rules, forms, and procedures for the
administration of these
terms, and to construe and
interpret them and to decide any and all questions of
fact, interpretation, definition, computation or administration arising in
connection with the
operation of these terms,
including, but not limited to, whether benefits are in fact due and the
amount of benefits to be paid.  The rules, interpretations,
computations and other actions of the Company shall be binding and conclusive on all
persons.

     

    
      	
              9.

            	
              No Implied Employment
      Contract.

            

    

     

    The Plan shall not be deemed (i) to give
Participant any right to be retained in the
Company’s employ, or (ii) to interfere with the Company’s right to discharge
Participant at any time, with or without
cause.

     

    
      	
              10.

            	
              Legal
      Construction.

            

    

     

    These terms are governed by and shall be construed in
accordance with the laws of the State of California.

     

    
      	
              11.

            	
              General
      Provisions.

            

    

     

    (a)           Notices.  Any notice, demand or request required
or permitted to be given by
either the Company or Participant pursuant to the terms of
this Plan shall be in writing and shall be deemed given when delivered
personally or deposited in the U.S. mail, First Class with postage prepaid, and
addressed to the parties, in the case of the Company, at the address set forth in
Section 2(t) and, in
the case of Participant, at
the address as set forth in the Company’s employment file maintained for Participant as previously
furnished by Participant or such other address as a
party may request by notifying the other in writing.

     

    (b)           Transfer and
Assignment.  The
rights and obligations of Participant hereunder may not be transferred or assigned
without the prior written consent of the Company.  These terms shall be binding upon any surviving
entity resulting from a Change in Control and upon any other person who is a
successor by merger, acquisition, consolidation or otherwise to the business
formerly carried on by the Company without regard to whether or not such person
or entity actively assumes the obligations hereunder.

     

    (c)           Waiver.  Any Party’s failure to enforce any
provision or provisions hereof shall not in any way be construed as
a waiver of any such provision or provisions, nor prevent any Party from
thereafter enforcing each and every other provision hereof.  The rights granted the
Parties herein are cumulative and shall not constitute a waiver of any Party’s
right to assert all other legal remedies available to it under the
circumstances.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (d)           Severability.  Should any provision of these terms be declared or determined to be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or
impaired.

     

    (e)           Section
Headings.  Section headings herein are included for convenience of
reference only and shall not be considered part of these terms for any other
purpose.ex10_1.htm

EXHIBIT 10.1

 

EXHIBIT  A

PROCERA NETWORKS, INC.

SUBSCRIPTION AGREEMENT

Restricted Common Stock at $0.40 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 April 9, 2009, 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 Certificate of Accredited Investor Status, attached to the this Subscription Agreement as Exhibit 1 and to the PPM as Exhibit B; and

(iii)         The Participant’s check in the amount of $ _____________ in exchange for _____________ Shares purchased (at a price per share of $0.40) net to the Company, 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)[this section intentionally omitted]

(g)This Offering, as defined in the Memorandum, is scheduled to close no later than April 30, 2009 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 6,250,000 Shares ($2,500,000) and an additional over-allotment at the Company’s discretion of up to 5,000,000 Shares ($2,000,000), but this Offering has no prescribed minimum amount and the Company may accept lessor amounts from investors and/or have multiple closings of this Offering.

  

  

  

(h)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 current or 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)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 1.

(h)Participant understands that the Shares are illiquid and will not be registered under the Securities Act, and until 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, and/or the loss of Participant’s entire investment in the Shares will cause Participant 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 Participant’s
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 appropriate and/or 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, Participant’s financial position and Participant’s 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 and therein.

  

  

  

(m)Each Participant hereby: (i) acknowledges that it has received all the information it has requested from the Company and that Participant considers necessary or appropriate for deciding whether to acquire the Shares, (ii) represents that Participant has had an opportunity to ask questions and receive answers from the Company regarding
the terms and conditions of the offering of the Shares and to obtain any additional information necessary to verify the accuracy of the information given the Participant and (iii) further represents that Participant has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risk of this investment.

(n)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 State of Nevada 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 has been duly authorized, executed, and delivered by the Company and is a valid and binding agreement, enforceable in accordance with its 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 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 NYSE  AMEX LLC (the “AMEX”),
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, provided however that the approval of the AMEX will be required prior to the issuance of the Shares.

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

  

  

  

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 as applied to agreements among California residents, made and to be performed entirely within the State of California, without giving effect to conflicts of laws
principles.

9.General.  If a court of competent jurisdiction finds any provision of this Subscription unenforceable, the parties agree to replace the offending provision with an enforceable provision that most nearly achieves the intent and economic effect of the unenforceable provision
and all other terms shall remain in full force and effect.  Except as otherwise expressly provided herein, the provisions of this Subscription are for the benefit of the parties hereto and not for any other person or entity.  This Subscription shall not provide any non-party with any remedy, claim, liability, reimbursement, claim of action or other right in excess of those existing without reference hereto. The titles and subtitles used in this Subscription are used for convenience only and
are not to be considered in construing or interpreting this Subscription.  This Subscription is the result of negotiations among, and has been received by, Participant and the Company and their respective counsel.  Accordingly, this Subscription shall be deemed to be the product of all parties hereto, and no ambiguity shall be construed in favor of or against either party.  This Subscription may be executed in two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument. This Subscription, including the Exhibits, may only be amended or modified in a writing signed by both parties.  The Company and each Participant shall each bear its respective expenses and legal fees incurred with respect to this Agreement and the transactions contemplated herein.  This Subscription is the full and entire understanding and agreement between the parties and supersedes all prior agreements and other communications
between the parties, oral and written, with regard to the subjects hereof and no party shall be liable or bound to any other party in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein.

  

  

  

10.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 1, included herewith.)

Name (please print): ______________________________________________________

Person is domiciled (for tax purposes) in the following country:  USA

Social Security or Taxpayer I.D. Number:

Business Address (including zip code):

Business Phone:

Residence Address (including zip code and country):

 

Residence Phone:

Email:  __________________________________________________________

All communications to be sent to:

Business or Residence Address

Number of Shares subscribed for at $0.40 per share: _____________________________

Total Subscription Amount: $ _______________________________________________

  

  

  

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, MAY HAVE TAX
CONSEQUENCES, AND/OR 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 Participant’s domicile and Participant’s 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 April, 2009, at _________________________.

PARTICIPANT

(Signature)

	  	
[name]

The Company has accepted this subscription this _____ day of ____________, 2009.

	  	
“COMPANY”

	  	  
	  	
PROCERA NETWORKS, INC.,

	  	
a Nevada corporation

By:           

James Brear, CEO

Address for notice:

Procera Networks, Inc.

100-C Cooper Court

Los Gatos, CA  95032

Attn: James Brear

  

  

  

Exhibit 1

To The Subscription Agreement

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 or she is representing his or her 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 __________________, 2009.

(signature)

[name]

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