Procera
Networks, Inc.
NOTE
PURCHASE AGREEMENT
This Note Purchase
Agreement
(the “ Agreement
”) is made as of the ___ day of April 2009 (the “
Effective Date ”) by and among Procera Networks, Inc.
, a Nevada corporation
(the “ Company ”), and the persons and
entities named on the Schedule of Purchasers attached hereto
(individually, a “ Purchaser ” and
collectively, the “ Purchasers
”).
RECITAL
To provide the Company with additional resources
to conduct its business, the Purchasers are willing to loan to the
Company in one or more disbursements up to an aggregate amount of
three million dollars ($3,000,000), subject to the conditions
specified herein.
AGREEMENT
Now,
Therefore , in
consideration of the foregoing, and the representations,
warranties, covenants and conditions set forth below, the Company
and each Purchaser, intending to be legally bound, hereby agree as
follows:
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Amount and Terms of the
Loan(s)
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6.1
The Loan(s) . Subject to the terms of this
Agreement, each Purchaser agrees to lend to the Company at the
Closing (as hereinafter defined) the amount set forth opposite each
such Purchaser’s name on the Schedule of Purchasers attached
hereto (each, a “ Loan Amount ” and
collectively the “ Total Loan Amount ” or
“ Loan ”) against the issuance and
delivery by the Company of a promissory note or notes for such
amount(s), in substantially the form attached hereto as
Exhibit A (each, a “
Note ” and collectively, the “
Notes ”).
7.1
Closing Date(s). The closing of the sale and
purchase of the Notes (the “ Closing ”)
shall be held on the Effective Date, or at such other time(s) as
the Company and a majority in interest of the Purchasers shall
agree (the “ Closing Date
”). At any time on or before the third day
following the Closing, the Company may sell up to the balance of
the authorized Notes not sold at Closing.
7.2
Delivery. At the Closing (i) each Purchaser
shall deliver to the Company a cashier’s check or shall wire
transfer funds in the amount of such Purchaser’s portion of
the Loan Amount; and (ii) the Company shall issue and deliver
to each Purchaser a Note in favor of such Purchaser payable in the
principal amount of such Purchaser’s Loan Amount.
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Representations,
Warranties and Covenants of the Company
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The Company
hereby represents and warrants to each Purchaser as
follows:
8.1
Organization, Good Standing and Qualification
. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Nevada. The Company has the requisite corporate power to
own and operate its properties and assets and to carry on its
business as now conducted and as proposed to be
conducted. The Company is duly qualified and is
authorized to do business and is in good standing as a foreign
corporation in all jurisdictions in which the nature of its
activities and of its properties (both owned and leased) makes such
qualification necessary, except for those jurisdictions in which
failure to do so would not have a material adverse effect on the
Company or its business.
8.2
Corporate Power . The Company will have at
the Closing Date all requisite corporate power to execute and
deliver this Agreement, to issue each Note, (collectively, the
“ Loan Documents ”) and to carry out and
perform its obligations under the terms of this Agreement and under
the terms of each Note. The Company’s Board of
Directors has approved the Loan Documents based upon a reasonable
belief that the Loan is appropriate for the Company after
reasonable inquiry concerning the Company’s financing
objectives and financial situation.
8.3
Authorization. All corporate action on the part
of the Company, its directors and its stockholders necessary for
the authorization, execution, delivery and performance of this
Agreement by the Company and the performance of the Company’s
obligations hereunder, including the issuance and delivery of the
Notes has been taken. This Agreement and the Notes, when
executed and delivered by the Company, shall constitute valid and
binding obligations of the Company enforceable in accordance with
their terms, subject to laws of general application relating to
bankruptcy, insolvency, the relief of debtors and, with respect to
rights to indemnity, subject to federal and state securities
laws.
8.4
Compliance with Laws . To its knowledge, the
Company is not in violation of any applicable statute, rule,
regulation, order or restriction of any domestic or foreign
government or any instrumentality or agency thereof in respect of
the conduct of its business or the ownership of its properties,
which violation of which would materially and adversely affect the
business, assets, liabilities, financial condition, operations or
prospects of the Company.
8.5
Compliance with Other Instruments . The Company
is not in violation or default of any term of its certificate of
incorporation or bylaws, or of any provision of any mortgage,
indenture or contract to which it is a party and by which it is
bound or of any judgment, decree, order or writ, other than such
violation(s) that would not have a material adverse effect on the
Company. The execution, delivery and performance of this Agreement,
the Notes, and the consummation of the transactions contemplated
hereby or thereby will not result in any such violation or be in
conflict with, or constitute, with or without the passage of time
and giving of notice, either a default under any such provision,
instrument, judgment, decree, order or writ or an event that
results in the creation of any lien, charge or encumbrance upon any
assets of the Company or the suspension, revocation, impairment,
forfeiture, or nonrenewal of any material permit, license,
authorization or approval applicable to the Company, its business
or operations or any of its assets or properties.
8.6
Offering. Assuming the accuracy of the
representations and warranties of the Purchasers contained in
Section 4 hereof, the offer, issue, and sale of the Notes are
exempt from the registration and prospectus delivery requirements
of the Securities Act of 1933, as amended (the “
Act ”), and have been registered or qualified
(or are exempt from registration and qualification) under the
registration, permit, or qualification requirements of all
applicable state securities laws.
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Representations and
Warranties of the Purchasers
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9.1
Purchase for Own Account . Each Purchaser
represents that it is acquiring the Notes solely for its own
account and beneficial interest for investment and not for sale or
with a view to distribution of the Notes or any part thereof, has
no present intention of selling (in connection with a distribution
or otherwise), granting any participation in, or otherwise
distributing the same, and does not presently have reason to
anticipate a change in such intention.
9.2
Information and Sophistication . Without
lessening or obviating the representations and warranti