Exhibit 10.7


    
      

    

    Exhibit
      10.7

     

    Procera
      Networks

     

    March
      12,
      2004

    


    Anil
      Sahai

    20661
      Carniel Avenue

    Saratoga,
      CA 95070

    


    Dear
      Anil,

    


    We
      are
      pleased to offer you employment with Procera Networks, Inc. (the "Company")
      in
      the exempt position of Executive
      Vice-President and Chief Technical Officer (CTO),
      reporting to the CEO of the Company. You will be employed by Procera Networks,
      Inc. through Execustaff, a Professional Employer Organization providing human
      resources management.

    


    You
      will
      be compensated as follows:

    


    
      	 	
              •

            	
              Base
                Salary:

            	
              $180,000
                annually, payable at the rate of $6,923.08 per pay period. You will
                be
                paid on a bi-weekly basis, every other Friday, and will be subject
                to
                normal withholdings. If a Friday pay period falls on a Company Holiday,
                you will be paid on the last business day prior to the Holiday. The
                first
                and last payment by the Company to you will be adjusted, if necessary,
                to
                reflect a commencement or termination date other than the first or
                last
                working day of a pay period.

            


    

    


    
      	 	
              •

            	
              Incentive

            	
              You
                will have the opportunity to earn an incentive target bonus of $100,000
                per annum, based on your performance against milestones which are
                mutually
                agreed upon by you and the CEO and approved by the Board of
                Directors.

            


    

    


    
      	 	
              •

            	
              Stock
                Options:

            	
              Upon
                commencement of employment, you will be granted an incentive
                stock option, subject to approval by the Board of Directors at their
                meeting in April 2004, to purchase 1,200,000 shares of the Company's
                common stock The option price per share will be the closing bid price
                of
                the Company's common stock on the business day prior to the Date
                of Grant
                by the Board. Options will vest as follows: (a) Zero (0) vesting
                for the
                first three (3) months of employment following your Hire Date; (b)
                three-hundred thousand (300,000) shares will vest on the last day
                of the
                calendar month in which your third calendar month of employment occurs;
                and (c) eighty-one thousand eight-hundred eighteen (81,818) shares
                shall
                vest at the end of each third calendar month of employment thereafter,
                until the options become folly vested or your employment is terminated,
                whichever occurs first.

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              •

            	
              Paid
                Time-Off:

            	
              As
                an employee of the Company, you shall be provided with twenty
                (20) days of paid time-off, to be used at your discretion. PTO will
                accrue, starting with your first full pay period, at the rate of
                6.2 hours
                per pay period.

            


    

    


    
      	 	
              •

            	
              Employee
                Benefits:

            	
              Per
                Company Policy

            


    

    


    The
      Company offers a number of benefits to its employees, presently including,
      health, dental, long-term disability, short-term disability, and vision
      insurance, as well as 401(k) and Flexible Spending plans. The Company policy
      also provides for the direct deposit of paychecks. Details of these benefits
      are
      described on the attached summary. The Company reserves the right to alter
      its
      policies and/or to amend it's benefits in its discretion upon notice to its
      employees.

    


    Your
      employment with the Company will be strictly on an at-will basis, which means
      that either you or the Company can end the relationship at any time upon notice
      to the other, without cause, for any reason or no reason. The Company also
      reserves the right to discipline, demote or alter the terms of employment of
      its
      employees at any time, with or without cause or advance notice. This letter
      agreement shall represent the entire understanding concerning the at-will nature
      of your employment and the possible termination of the employment relationship.
      This at-will agreement cannot be changed or modified in any way except by a
      written agreement between you and the Company, authorized in advance by a duly
      authorized officer of the Company.

    


    Your
      employment is conditioned upon your signing and returning this letter as well
      as
      the following attached documents, which also shall govern the terms of your
      employment:

    


    
      	 	
              •

            	
              EMPLOYEE
                CONFIDENTIALITY AND NON-SOLICITATION
                AGRFEEMENT

            


    

    
      	 	
              •

            	
              PROPRIETARY
                INFORMATION AND INVENTIONS
                AGREEMENT

            


    

    


    Other
      than as expressly stated in this letter and the attached agreements, the Company
      makes no promises or representations concerning future promotions, compensation,
      or other terms and conditions of employment. By accepting employment, you agree
      that you have not relied upon or been induced to accept employment with the
      Company on the basis of any such promises or representations.

    


    This
      agreement is the only agreement between the parties, and supersedes any and
      all
      previous verbal or written agreements regarding the issues related hereto.
      This
      offer is contingent upon your ability to provide proof of eligibility to work
      in
      the United States as required by the Immigration Reform Control
      Act.

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    
      


      It
        is
        anticipated that your employment with Procera Networks, Inc. will commence
        on or
        before March 20, 2004.

      


      Anil,
        we
        are looking forward to your joining our team at Procera Networks,
        Inc.

      


      Sincerely,

      


      /s/
        Douglas J. Glader


      Douglas
        J. Glader

      CEO

      


      


      
        	
                Offer
                  accepted:

              	
                /s/
                  Anil Sahai

              	 
	 	 	 
	
                Date:

              	
                3/12/04