Riverbed Technology (RVBD)

1.7 Post-Closing Payments.

(a) For purposes of Section 1.7, the following terms shall have the following meanings:

(i) “Eligible Stockholder” shall mean a holder of shares of Company Preferred Stock immediately prior to the Effective Time that does not perfect its dissenters’ rights;

(ii) “One Year Bookings” shall mean: (A) the bookings (net of applicable discounts and as the term “bookings” is commonly understood and only to the extent that a purchase order and related executed customer contract exists in respect thereof) derived by Parent or the Company solely from: (1) the sale of any of the Company’s products identified on Schedule 1.7(a)(ii) (collectively, the “Specified Company Products”) during the One-Year Period; and (2) the sale of initial or renewal maintenance contracts during the One-Year Period to the extent related to the sale of Specified Company Products (it being understood that with respect to multi-year maintenance arrangements, the bookings

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that shall be included in “One Year Bookings” shall be calculated by: (x) determining the aggregate maintenance bookings for the entire term of the applicable maintenance arrangement; (y) allocating the bookings determined pursuant to clause “x” of this sentence over the term of the maintenance arrangement on a pro-rata basis; and (z) including in “One Year Bookings” the amount allocated under clause “(y)” of this sentence for a one year period); less (B) the sum of: (1) actual sales returns with respect to the bookings referred to in clause “(A)” of this sentence for the period beginning on the first day of the One-Year Period and ending at 5:00 p.m. Pacific time on the 90^th day following the last day of the One-Year Period (the “Specified Period”); (2) actual write-offs of accounts receivable with respect to the bookings referred to in clause “(A)” of this sentence for the Specified Period; (3) any accounts receivable with respect to the bookings referred to in clause “(A)” of this sentence that are more than 90 days past due as of the end of the Specified Period; and (4) any bookings with respect to which product revenue is not recognizable (whether during or after the One-Year Period) in accordance with GAAP;

(iii) “One-Year Period” shall mean the period commencing at 9:00 a.m. Pacific time on April 1, 2009 and ending at 5:00 p.m. Pacific time on March 31, 2010;

(iv) “Percentage Interest” shall mean, with respect to any particular Eligible Stockholder, the percent set forth next to such Eligible Stockholder’s name on Schedule 1.7(a)(iv); and

(v) “Post-Closing Payment” shall mean any payment that Parent is required to make pursuant to Section 1.7.

(b) Subject to any right of setoff that Parent may be entitled to exercise (pursuant to Section 9.6 or otherwise), and subject to the other provisions of Section 1.7:

(i) if the One Year Bookings are equal to or greater than the amount set forth in clause “(i)(1)” of Schedule 1.7(b), then Parent shall pay to each Eligible Stockholder, on a date selected by Parent within 120 days following the end of the One-Year Period, cash equal to such Eligible Stockholder’s Percentage Interest in the amount set forth in clause “(i)(2)” of Schedule 1.7(b);

(ii) if the One Year Bookings are at least equal to the amount set forth in clause “(ii)(1)” of Schedule 1.7(b), then Parent shall pay to each Eligible Stockholder, on a date selected by Parent within 120 days following the end of the One-Year Period, cash equal to: (A) the amount due under clause “(i)” of this Section 1.7(b); and (B) such Eligible Stockholder’s Percentage Interest in the amount set forth in clause “(ii)(2)” of Schedule 1.7(b); and

(iii) if the One Year Bookings are greater than the amount set forth in clause “(iii)(1)” of Schedule 1.7(b), then Parent shall pay to each Eligible Stockholder, on a date selected by Parent within 120 days following the end of the One-Year Period, cash equal to: (A) the amount due under clause “(i)” of this Section 1.7(b); (B) the amount due under clause “(ii)” of this Section 1.7(b); and (C) such Eligible Stockholder’s Percentage Interest in the amount determined by multiplying: (1) the amount set forth in clause “(iii)(2)” of Schedule 1.7(b); by (2) the quotient of: (x) the amount by which the One Year Bookings exceed the amount set forth in clause “(iii)(1)” of Schedule 1.7(b); and (y) the amount set forth in clause “(iii)(3)” of Schedule 1.7(b).

Notwithstanding anything to the contrary contained in this Agreement: (A) in no event shall the aggregate amounts payable by Parent to the Eligible Stockholders pursuant to this Section 1.7 exceed the amount set forth in clause “(iii)(4)” of Schedule 1.7(b); and (B) if the Stockholders’ Agent delivers an Initial Objection Notice or a Final Objection Notice to Parent in accordance with Section 1.7(e), then Parent shall make any payments required under this Section 1.7(b) to the Eligible Stockholders within 30 days after the dispute identified in such Initial Objection Notice or a Final Objection Notice, as the case may be, is resolved.

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(c) Notwithstanding anything to the contrary contained in this Section 1.7 or elsewhere in this Agreement (and without limiting any other rights or remedies available to Parent), Parent shall, subsequent to the rendering of a final determination pursuant to Section 1.7(e) below, be entitled, in its sole discretion, to deduct from either the Escrow Fund or any Post-Closing Payment cash equal to the Eligible Stockholders’ portion of the Post-Closing Payment Fees and Expenses (as defined below).

(d) Promptly following the end of each fiscal quarter during the One-Year Period, but in no event more than 30 days thereafter, Parent shall in good faith: (i) prepare or cause to be prepared a non-binding estimate of the amount of the One Year Bookings as of the end of such fiscal quarter (the “Quarterly Statement”); and (ii) for informational purposes only, deliver or cause to be delivered such Quarterly Statement to the Stockholders’ Agent for and on behalf of the Eligible Stockholders.

(e) On or before the 60^th day following the end of the One-Year Period, Parent shall: (i) prepare or cause to be prepared a statement (the “Bookings Statement”) setting forth the One Year Bookings, together with the dollar amounts of any Post-Closing Payment that Parent believes is due in accordance with Section 1.7; and (ii) deliver or cause to be delivered such Bookings Statement to the Stockholders’ Agent for and on behalf of the Eligible Stockholders.

(f) In the event that the Stockholders’ Agent objects to Parent’s calculation of the Bookings Statement or the dollar amount of any Post-Closing Payment set forth in any Bookings Statement or requires further information in order to perform such calculations or determine such amounts, then within 20 days after the delivery to the Stockholders’ Agent of such Bookings Statement (the “Initial Response Period”), the Stockholders’ Agent shall deliver to Parent a written notice (an “Initial Objection Notice”): (i) describing in reasonable detail the Stockholders’ Agent’s objections to Parent’s calculation of the amounts set forth in such statement and containing a statement setting forth the One Year Bookings or the amount of any such Post-Closing Payment determined by the Stockholders’ Agent to be correct; or (ii) requesting additional information from Parent that the Stockholders’ Agent deems reasonably necessary in order to perform such calculations or determine such amounts (which information, to the extent reasonably necessary in order to perform such calculations, shall be provided by Parent within 15 days after Parent’s receipt of such request). If the Stockholders’ Agent does not deliver an Initial Objection Notice to Parent during the Initial Response Period, then Parent’s calculation of the amounts set forth in the Bookings Statement shall be binding and conclusive on Parent, the Eligible Stockholders and the Stockholders’ Agent. If the Stockholders’ Agent delivers an Initial Objection Notice to Parent accompanied by a request for additional information from Parent as described above during the Initial Response Period, then the Stockholders’ Agent shall have an additional 20 days after receiving from Parent either: (x) all of the information requested by the Stockholders’ Agent; or (y) written notice from Parent that no further requested information is to be provided (such 20 day period, the “Final Response Period”) to deliver to Parent a written notice (a “Final Objection Notice”) describing in reasonable detail the Stockholders’ Agent’s objections to Parent’s calculations of the amounts set forth in such Bookings Statement accompanied by a statement setting forth the One Year Bookings or the dollar amount of any such Post-Closing Payment determined by the Stockholders’ Agent to be correct. If the Stockholders’ Agent has requested additional information in an Initial Objection Notice delivered during the Initial Response Period and does not deliver a Final Objection Notice to Parent during the Final Response Period, then Parent’s calculation of the amounts set forth in the Bookings Statement shall be binding and conclusive on Parent, the Eligible Stockholders and the

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Stockholders’ Agent. If the Stockholders’ Agent delivers an Initial Objection Notice or Final Objection Notice, as the case may be, accompanied by a statement setting forth the One Year Bookings or the amount of any such Post-Closing Payment determined by the Stockholders’ Agent to be correct to Parent during either the Initial Response Period or the Final Response Period in accordance with this Section 1.7(f), and if the Stockholders’ Agent and Parent are unable to agree upon the calculation of the amounts set forth in the Bookings Statement within 30 days after such Initial Objection Notice or Final Objection Notice, as the case may be, is delivered to Parent, the dispute shall be finally settled by a “Big Four” accounting firm selected by Parent and reasonably acceptable to the Stockholders’ Agent (other than Parent’s auditing firm at the time). The determination by the independent accounting firm of the disputed amounts and the Post-Closing Payments, if any, shall be conclusive and binding on Parent, the Eligible Stockholders and the Stockholders’ Agent. Parent and the Stockholders’ Agent (on behalf of the Eligible Stockholders) shall each bear and pay 50% of the fees and other expenses of such independent accounting firm (the “Post-Closing Payment Fees and Expenses”).

(g) No rights or interest of any Eligible Stockholder under this Section 1.7 may be assigned, transferred or otherwise disposed of, in whole or in part, other than pursuant to the laws of descent and distribution or by will or, in the case of an Eligible Stockholder that is an entity organized for the purpose of making venture capital investments, to any entity under common investment management with such Eligible Stockholder.

(h) At reasonable times during normal business hours and upon reasonable notice provided to Parent, Parent shall permit the Stockholders’ Agent, to examine the financial books and records of the Surviving Corporation and/or Parent, only to the extent necessary for the exercise of the Stockholders’ Agent’s right to object to Parent’s calculation of the amounts set forth in the Bookings Statement. The Stockholders’ Agent agrees that he shall hold all information acquired during such examination in strict confidence and shall use such information only for purposes of making calculations under Section 1.7; provided, however, that such information may be provided to agents and independent contractors of the Stockholders’ Agent that are subject to contractual (or, with respect to counsel, professional) confidentiality obligations in favor of (and for the benefit of) Parent in respect of such information for use in furtherance of an engagement to assist the Stockholders’ Agent in making such calculations as provided for herein.

(i) While Parent currently believes that it is in its best interest that it and the Company use commercially reasonable efforts to generate One Year Bookings, it is understood and agreed that: (i) neither Parent nor the Company has any obligation to use any specified efforts to generate One Year Bookings (or to sell or license Specified Company Products or enter into or renew related maintenance contracts); and (ii) Parent (on behalf of itself and on behalf of any of its Subsidiaries, including the Surviving Corporation) may discontinue the sale or license of Specified Company Products and the entering into or renewal of related maintenance contracts at any time without penalty (it being understood, however, that Parent will act in good faith in connection with the foregoing).