Procera Networks, Inc. NOTE PURCHASE AGREEMENT

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:

1.1    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 ”).

2.1     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.

2.2    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.

The Company hereby represents and warrants to each Purchaser as follows:

3.1    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.

3.2    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.

3.3    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.

3.4    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.

3.5    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.

3.6        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.

4.1    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.

4.2    Information and Sophistication .  Without lessening or obviating the representations and warranties of the Company set forth in Section 3, each Purchaser hereby: (i) acknowledges that it has received all the information it has requested from the Company and that Purchaser considers necessary or appropriate for deciding whether to acquire the Notes, (ii) represents that Purchaser has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Notes and to obtain any additional information necessary to verify the accuracy of the information given the Purchaser (iii) further represents that Purchaser has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risk of this investment, and (iv) acknowledges receipt of that certain draft Confidential Private Placement Memorandum dated April 9, 2009.

4.3    Accredited Investor Status.   Each Purchaser is an “accredited investor” as such term is defined in Rule 501 under the Act.

4.4    Further Assurances.   Each Purchaser agrees and covenants that at any time and from time to time it will promptly execute and deliver to the Company such further instruments an