S-1/A

As filed with the Securities and Exchange Commission on April 28, 2004

Registration No. 333-113830

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 1

TO

FORM S-1

REGISTRATION STATEMENT

Under

The Securities Act of 1933

BRIGHTMAIL INCORPORATED

(Exact name of Registrant as specified in its charter)

California	7372	94-3295092
(prior to reincorporation)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)
Delaware	301 Howard Street Suite 1800 San Francisco, CA 94105 (415) 905-5595
(after reincorporation) (State or other jurisdiction of incorporation or organization)

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Enrique Salem

President and Chief Executive Officer

301 Howard Street

Suite 1800

San Francisco, CA 94105

(415) 905-5595

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

John T. Sheridan, Esq. Jonathan M. Block, Esq. Glen E. Caplan, Esq. Wilson Sonsini Goodrich & Rosati Professional Corporation 650 Page Mill Road Palo Alto, CA 94304-1050 (650) 493-9300 Betty Ho, Esq. Brightmail Incorporated 301 Howard Street Suite 1800 San Francisco, CA 94105 (415) 905-5595 Bruce K. Dallas, Esq. Davis Polk & Wardwell 1600 El Camino Real Menlo Park, CA 94025 (650) 752-2000

Approximate date of commencement of proposed sale to the public:  As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), check the following box.  ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.  ¨

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission acting pursuant to said Section 8(a) may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED April 28, 2004

Preliminary Prospectus

             shares

Common stock

This is an initial public offering of shares of common stock by Brightmail Incorporated. Brightmail is selling              shares of common stock. The estimated initial public offering price is between $             and $             per share.

We have applied for quotation of our common stock on the Nasdaq National Market under the symbol BRML.

	Per Share	Total
Initial public offering price	$	$
Underwriting discounts and commissions	$	$
Proceeds to Brightmail, before expenses	$	$

Brightmail has granted the underwriters an option for a period of 30 days to purchase up to                  additional shares of common stock.

Investing in our common stock involves a high degree of risk. See “ Risk factors” beginning on page 7.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

JPMorgan Lehman Brothers

Pacific Crest Securities

                 , 2004

Table of contents

	Page
Prospectus summary	1
Risk factors	7
Special note regarding forward-looking statements	22
Use of proceeds	23
Dividend policy	23
Capitalization	24
Dilution	26
Selected consolidated financial data	28
Management’s discussion and analysis of financial condition and results of operations	30
Business	42
Management	57
Certain relationships and related-party transactions	72
Principal stockholders	73
Description of capital stock	75
Shares eligible for future sale	79
Underwriting	82
Certain United States tax considerations for non-United States holders	85
Legal matters	87
Experts	87
Where you can find additional information	88
Index to consolidated financial statements	F-1

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Prospectus summary

You should read the following summary together with the entire prospectus, including the more detailed information in our consolidated financial statements and related notes appearing in the back of this prospectus. You should carefully consider, among other things, the matters discussed in “Risk factors.”

Brightmail Incorporated

Brightmail is a leading provider of electronic messaging security software and services to enterprises and messaging service providers worldwide, currently protecting approximately 25% of all mailboxes globally. Our proprietary software platform provides flexible, scalable and dynamic anti-spam, anti-virus and related messaging security solutions to protect our customers’ email and electronic messaging infrastructure by effectively identifying and disposing of unwanted or malicious messages while accurately allowing delivery of legitimate messages. Our software installs easily and quickly and provides administration, customization and policy management capabilities. As a result, we provide our customers with a secure and improved messaging environment, allowing them to realize workforce productivity gains and more efficiently utilize their technology infrastructure.

We market our products and services through the combination of our indirect sales channels, including distributors, resellers, business outsourcing and hosted service providers, large global systems integrators, original equipment manufacturers and appliance vendors, as well as through the efforts of our direct sales organization. We provide our customers with software updates approximately every ten minutes drawing upon our proprietary Probe Network, which monitors evolving messaging threats in real-time. Our software, which is available solely on a subscription basis, can support numerous hardware configurations, operating systems and messaging applications and infrastructure, and is delivered as stand-alone software or, by our distribution partners, integrated into their appliance solutions or as a hosted service. From 1999, when we first introduced our products and services, through April 2004, our customer base has grown to over 2,000 customers, with an aggregate of approximately 300 million end-user mailboxes under subscription.

Our products, services and support

•  Brightmail Anti-Spam. Brightmail Anti-Spam is our flagship product and is typically deployed at the Internet gateway, where email enters a customer’s core network. It effectively identifies and filters unsolicited or unwanted electronic messages while reducing the number of blocked legitimate emails, or false positives, to less than one message in one million. Our core anti-spam engine uses multiple proprietary technologies, a globally deployed detection network and a dynamic rule delivery mechanism. Brightmail Anti-Spam incorporates a multi-faceted approach to spam detection, including filtering based on the message source, content or embedded directives, which attempt to induce recipients to visit specific website addresses or dial phone numbers embedded within the message.

•  Brightmail Anti-Virus. Brightmail Anti-Virus is a module that customers may license in conjunction with Brightmail Anti-Spam. This anti-virus module, which incorporates certain anti-

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virus technology from Symantec Corporation, scans message attachments for viruses and other malicious code and delivers anti-virus signature updates to customers automatically and securely.

•  Brightmail Reputation Service. Brightmail Reputation Service provides businesses with an additional level of security against messaging security threats and is currently offered in conjunction with our anti-spam product. Using data from our Probe Network, this service tracks message and spam flow in real time from hundreds of thousands of email sources and automatically creates profiles for each email source, permitting customers to block messages from identified sources.

•  Brightmail Anti-Fraud. Brightmail Anti-Fraud is designed to protect established businesses from fraudulent emails that mimic legitimate corporate communications for the purposes of stealing financial or personal information. Brightmail Anti-Fraud acts as an early detection system by utilizing the information collected by our Probe Network to proactively monitor whether an anti-fraud customer’s brand is being fraudulently used in messages.

•  Customer service and support. With each subscription, customers receive support and maintenance services, including access to customer service professionals, technical support, software upgrades and updates, delivery of filtering rules and rules updates and an online repository of information about our products and services.

Our market opportunity

We believe that the following industry factors are important in order to understand the growth potential for our business:

•  Electronic messaging has become a ubiquitous communication tool and a mission critical application for the conduct of business.

•  The existing electronic messaging infrastructure is susceptible to security attacks that threaten the utility of electronic messaging.

•  The proliferation of spam is one of the most severe and challenging electronic messaging security threats faced by businesses today, as hackers and spammers increasingly use spam to advertise, introduce viruses into business networks and steal confidential information. According to International Data Corporation, spam as a percentage of overall Internet email traffic will grow from 35% in 2002 to 67% in 2007.

•  Spam is a dynamic problem because spammers rapidly evolve techniques to circumvent efforts aimed at stopping them.

•  Spam inflicts costs and harm to businesses through lost productivity, false positives, strain on IT resources, damage to corporate brands, increased risk of workplace liabilities and increased customer churn for service providers.

•  The international portability of spam operations and the ability of spammers to remain anonymous, in addition to the fact that governments have difficulty prosecuting across jurisdictions, means that an effective technology solution, in addition to legislation, is necessary to address the spam problem.

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Our strengths

We believe our competitive strengths include:

•  High effectiveness. Our messaging security technologies employ multiple proprietary techniques that enable us to quickly and dynamically identify, analyze and address messaging threats in real-time.

•   High accuracy (low false positives). Our low false positive rate enables customers to elect to have Brightmail automatically delete potentially unwanted or malicious messages, providing cost savings in bandwidth, network, storage and personnel.

•  Low total cost of ownership. Our software requires minimal consulting or in-house resources to install and implement. Once implemented, our automated processes analyze the latest threat trends and provide updates to filters, rules and definitions in real-time.

•  Cross-platform flexibility. Our software can support numerous operating systems, messaging applications and messaging protocols. We also deliver our solution as stand-alone software or integrated as an appliance or hosted service through our distribution channels.

•  High performance and scalability. Brightmail Anti-Spam is scalable to a virtually unlimited number of mailboxes and is built to efficiently meet the high volume messaging demands of large messaging service providers as well as the requirements of small businesses. Furthermore, our filtering technology has only a minimal impact on message transmission time regardless of total volume.

•  Customizable filtering and administration. Our software is customizable to the customer’s preferences with respect to the treatment of unwanted or malicious messages. Rules can be written or modified to customize the software for individual groups, departments or divisions.

Our strategy

Our strategy is to become the leading provider of messaging security products and services to businesses worldwide. In order to execute on this strategy, we endeavor to:

•  Extend product and technology leadership. We plan to continue improving our products, services and technology and expanding our solution offerings through internal development, third party solution providers and, potentially, strategic acquisitions.

•  Expand geographic coverage. We seek to broaden our existing customer base in international markets where spam growth is high but solution adoption is low. In particular, we will pursue large messaging service providers and Global 2000 accounts in Asia Pacific and Europe, Middle East and Africa.

•  Extend leveraged sales channel. We intend to expand sales coverage through the indirect sales channel of distributors, resellers, business outsourcing and hosted service providers, large global systems integrators, original equipment manufacturers and appliance vendors, as well as through our direct sales professionals.

•  Leverage installed base of existing customers. We plan to leverage our large and diverse customer base by cross-selling additional products. We believe there is a significant opportunity to market new messaging security products and services to our existing customers.

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•  Encourage development of third-party applications for our software platform. We will continue to offer our Software Development Kit to enable the integration of third-party products and services and to foster the development of new applications.

Corporate information

We were incorporated in California as BrightLight Technologies Inc. in 1998, and changed our name to Brightmail in 2000. Prior to the completion of the offering, we will reincorporate as a Delaware corporation. Our principal executive offices are located at 301 Howard Street, Suite 1800, San Francisco, California 94105. Our telephone number at that location is (415) 905-5595. Our website address is www.brightmail.com. We do not incorporate the information on our website into this prospectus, and you should not consider any information on, or that can be accessed through, our website as part of this prospectus.

BRIGHTMAIL is our registered trademark. Probe Network, BLOC, BrightSig and The Anti-Spam Leader are our trademarks. Trade names, trademarks and service marks of other companies appearing in this prospectus are the property of the respective holders.

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The offering

Common stock offered:              shares

Common stock to be outstanding after the offering:              shares

Use of proceeds:

We intend to use the net proceeds of this offering for general corporate purposes, including working capital and capital expenditures, and potential investments and acquisitions.

Proposed Nasdaq National Market symbol: BRML

The number of shares of our common stock to be outstanding immediately after this offering is based on shares of common stock outstanding as of February 29, 2004. This information excludes:

•  6,822,718 shares of common stock issuable upon the exercise of outstanding stock options as of February 29, 2004, with exercise prices ranging from $0.05 to $0.95 per share and a weighted average exercise price of $0.78 per share;

•  73,099 shares of common stock issuable upon the exercise of warrants outstanding as of February 29, 2004, with exercise prices ranging from $1.50 to $5.02 per share and a weighted average exercise price of $2.82 per share;

•  2,500,000 shares of common stock to be available for issuance under our 2004 Equity Incentive Plan, and 1,050,000 shares of common stock to be available for issuance under our 2004 Employee Stock Purchase Plan, each plan to be effective upon the completion of this offering. The 2004 Equity Incentive Plan and the 2004 Employee Stock Purchase Plan each contain a provision that automatically increase their share reserve each year, as more fully described in “Management—Benefit plans.”

Except as otherwise indicated in this prospectus, the number of shares of common stock to be outstanding after the offering assumes the following:

•  the conversion of all outstanding convertible preferred stock into 20,939,375 shares of common stock upon the closing of the offering;

•  the underwriters’ over-allotment option will not be exercised to purchase additional shares in this offering; and

•  the completion of our reincorporation into Delaware.

We expect to effect a reverse stock split prior to completion of this offering. Share and per share numbers in this registration statement do not give effect to such reverse stock split.

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Summary consolidated financial data

The following tables summarize consolidated financial data regarding our business and should be read together with “Management’s discussion and analysis of financial condition and results of operations” and our consolidated financial statements and the related notes included elsewhere in this prospectus.

Year ended January 31, (in thousands, except per share data)	2002			2003			2004
Consolidated statement of operations:
Revenues	$	6,428		$	12,184		$	26,046
Operating income (loss)		(11,755	)		(5,243	)		1,040
Net income (loss)		(10,844	)		(4,974	)		1,169
Net income (loss) per share:
Basic	$	(2.17	)	$	(0.87	)	$	0.20
Diluted		(2.17	)		(0.87	)		0.04
Pro forma (unaudited)		—			—			0.04
Number of shares used in per share calculations:
Basic (1)		4,997			5,691			5,878
Diluted (1)		4,997			5,691			30,499
Pro forma (unaudited) (1)		—			—			30,499

(1) For information regarding the computation of per share amounts, refer to notes 1 and 9 of the notes to our consolidated financial statements.

January 31, 2004, (in thousands)	Actual			Pro forma			Pro forma as adjusted
Consolidated balance sheet data:
Cash, cash equivalents and short-term investments	$	26,837		$	26,837		$
Deferred revenue		17,706			17,706
Working capital		17,889			17,889
Total assets		38,836			38,836
Convertible preferred stock		53,210			—
Common stock		4,692			57,902
Accumulated deficit		(38,833	)		(38,833	)
Total stockholders’ equity (deficit)		(35,515	)		17,695

Pro forma balance sheet data reflect the conversion of all of the convertible preferred stock into common stock, which will occur if all criteria described in note 4 to our consolidated financial statements are met, upon the closing of this offering.

Pro forma as adjusted balance sheet data reflect our sale of              shares in this offering and the receipt of the estimated net proceeds from this offering at an assumed initial public offering price of $             per share, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

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Risk factors

Investing in our common stock involves a high degree of risk. You should carefully consider the following risk factors, which we believe are the material risks related to our business and this offering, as well as all other information in this prospectus, before deciding whether to invest in shares of our common stock. If any of the following risks actually occurs, our business and operating results could suffer and you might lose all or part of your investment in our common stock.

Risks related to our business and industry

Although we have reported net income for a limited period of time, we expect to incur a net loss in fiscal 2005 and we plan to invest substantially in expansion of our operations and may incur significant operating losses in the future, which makes our business difficult to evaluate and predict.

We experienced substantial operating losses from our inception in February 1998 through the third quarter of our fiscal year ended January 2003 and only achieved profitability on an annual basis in fiscal 2004. In fiscal 2002 and 2003, we reported net losses of approximately $10.8 million and $5.0 million, respectively, and we had an accumulated deficit of $38.8 million at January 31, 2004. In the future, we expect to increase our operating expenses as we invest to expand our operations, and based upon the amount of deferred stock-based compensation as of January 31, 2004, we expect to amortize approximately $1.4 million in deferred stock-based compensation over the next four years. We expect these expenses and amortization charges to result in a net loss in fiscal 2005 and potentially in future periods, and future losses could be substantial. Our ability to sustain profitability is dependent on a number of factors, including:

•  our ability to develop, upgrade and maintain new and existing products and services and to effectively respond to the rapid technology change in the messaging security market;

•  our ability to compete effectively in a highly competitive industry;

•  the growth, if any, in enterprise and service provider purchases and use of our products and services and the growth of the messaging security market generally;

•  the volume of sales of our products and services by our strategic partners, distribution partners and resellers;

•  our ability to successfully manage the expansion of our operations, including the hiring of additional employees both in the United States and internationally and the expansion of our international distribution channels; and

•  the continued success and adoption of our products and services.

You should not consider recent quarterly revenue growth as indicative of our future performance. In fact, in future quarters we may not have any revenue growth, and our revenues could decline. Furthermore, if our operating expenses exceed our expectations, our financial performance will be adversely affected.

If we experience significant fluctuations in our operating results or fail to meet revenue and earnings expectations, our stock price may fall.

Due to our limited operating history and the unpredictability of the developing messaging security industry, we may not be able to accurately forecast our future operating results. We base

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our current and future expense levels on estimates of future revenues. Our expenses are to a large extent fixed in the short term, and we expect that these expenses will increase in the future. We may not be able to adjust our spending quickly enough if our revenues fall short of our expectations.

Factors that could cause our quarterly financial results to fluctuate include:

• releases of new versions of our products and product upgrades, and the effect those new product releases will have on our ability to retain existing customers and to win new customers;

• the introduction of competitive products and the pricing of these products;

• reduced demand for our anti-spam, anti-virus and other products and services;

• significant increases in expenses to drive the growth of our business and international expansion, which may not yield corresponding increases in revenue;

• the concentration of annual year-end renewal dates of our customers’ subscription contracts, at which point our customers may elect not to renew;

• the effectiveness of future legislation in eliminating or reducing spam;

• changes in customer demands and needs for messaging security solutions; and

• fluctuations in currency exchange rates, particularly as we expand our international operations.

As a result, revenue growth may not be sustainable and may decrease in the future, and our earnings may be harmed. We believe that period-to-period comparisons of our historical operating results may not be meaningful, and you should not rely on them as an indication of future performance.

Our products may become obsolete due to rapid technological change in the messaging security market.

The messaging security market is characterized by:

• rapid technological change;

• the proliferation of new and changing methods of distributing spam and other messaging threats;

• frequent product introductions and updates; and

• changing customer needs.

These characteristics of our market create significant risks and uncertainties for our business success. Our competitors might introduce products with better performance, higher effectiveness and better accuracy. Numerous service providers and vendors have also announced that they are developing or considering developing an email authentication system to enhance the effectiveness of their spam filtering products by blocking emails that obscure the identify of the sender of an email. Additionally, new software operating systems, hardware or messaging security industry standards could emerge. We may not be successful in either developing appropriate modifications and enhancements to our products and services or in timely bringing them to market. Furthermore, uncertainties about the timing and nature of new network platforms or technologies, or modifications to existing platforms or technologies, could increase our product development expenses. Our existing products might be incompatible with some or all of such standards or if such new standards are successful in eliminating messaging threats, the

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demand for our products could significantly decrease. Our business and operating results could materially suffer unless we are able to respond quickly and effectively to these developments.

If we become unable to utilize our Probe Network of decoy email accounts or if the security of the Probe Network is compromised, the effectiveness of our products and services would be adversely affected.

The effectiveness of our messaging security products and services depends on the continued operation and expansion of our Probe Network, which collects data from over a million decoy email addresses and enables us to identify, analyze and provide filter updates as spam attacks occur. We have relationships with third parties pursuant to which we deploy decoy email accounts in our Probe Network, which represent a major source of our decoy email accounts. Our product development efforts and the creation of filtering rules and other proprietary technology are dependent upon the information we obtain from the Probe Network. Despite the efforts we take to maintain and protect the security of the Probe Network, if originators of spam, virus or other messaging threats were to obtain access to the identities of, or other information regarding, our decoy email addresses, the value of our Probe Network would be compromised. In this event, the effectiveness of our products would likely decrease and we could lose customers and sales, thereby causing our revenues to decline and our operating results to suffer.

The market in which we participate is intensely competitive, and if we do not compete effectively, our operating results could be harmed.

The market for network security solutions, including messaging security products and services, is intensely competitive and rapidly changing. Barriers to entry into this market are relatively low, many of our competitors are larger and have more resources than we do, and with the introduction of new technologies and market entrants, we expect competition to intensify in the future. Many of our current and potential competitors enjoy substantial competitive advantages, such as greater name recognition, longer operating histories, larger research, development and marketing budgets as well as substantially greater financial, technical and other resources. In addition, many of our current and potential competitors have access to larger customer bases and have more extensive marketing and distribution arrangements with resellers, distributors and original equipment manufacturers, or OEMs, than we do. As a result, our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or customer requirements. Furthermore, because of these advantages, even if our products are more effective than the products that our competitors offer, potential customers might accept competitive products in lieu of purchasing our products.

We face competition from businesses that develop their own anti-spam and other messaging security technology, as well as from enterprise software vendors and online service providers who develop or bundle anti-spam, anti-virus and other messaging security technology with their other products. Our current and potential principal competitors include:

•  pure-play messaging security vendors such as CipherTrust, Inc. and Postini Corporation;

•  IT security and anti-virus vendors such as Network Associates, Inc., Symantec Corporation and Trend Micro Inc.; and

•  in-house software developers.

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In addition, we may face competition from large enterprise network infrastructure and software vendors such as Cisco Systems and Microsoft as they diversify their product offerings.

We believe that we compete principally on the basis of solution effectiveness, a low false positive rate, total cost of ownership and flexibility. In particular, we view our low false positive rate as a critical competitive factor. If we are unable to maintain our low false positive rate and continue to block a high percentage of spam, we may lose customers and be unable to maintain our market share.

Major vendors of enterprise software or hardware may decide to bundle anti-spam, anti-virus or other messaging security products as components or standard features of their broader product offerings, which could enable these competitors to provide their anti-spam, anti-virus or other messaging security products at deep discounts or at no additional cost. Some of our principal competitors offer their products at a lower price, which could result in pricing pressures on our products. This could render our products obsolete or unmarketable, particularly if the products offered by these vendors were comparable or superior to our products. If we are unable to maintain our current market share or pricing, our business and operating results would be negatively impacted. In addition, pricing pressures and increased competition generally could result in reduced sales, reduced margins or the failure of our products and services to achieve or maintain more widespread market acceptance, any of which could harm our business.

If our primary agreement with Microsoft expires or terminates early, our revenues could substantially decline.

We depend on our relationship with Microsoft Corporation, which is our largest customer, representing approximately 18% of our total revenues for the fiscal year ended January 31, 2004. Microsoft announced in November 2003 that it had developed an anti-spam technology that it will sell as part of its Exchange Server 2003. Our primary agreement with Microsoft expires in December 2005, subject to interim non-renewal rights. We intend to commence negotiations to extend this agreement in the near future. If this agreement is terminated or if we are unable to extend the term of this agreement, our business and operating results would be materially and adversely affected. Because of the large amount of revenues we derived from this agreement and our model of amortizing our revenues over the applicable subscription term, it will be difficult for us to rapidly increase our revenues through additional sales in any period to replace any lost revenues from Microsoft.

We depend on approximately 25 customers for a significant portion of our revenues. If we fail to retain or expand customer relationships, our revenues could decline.

We derive a significant portion of our revenues from a small number of customers, and we anticipate that we will continue to do so in the foreseeable future. In fiscal 2004, Microsoft accounted for 18% of our revenues and our top 25 customers, including Microsoft, comprised approximately 77% of our revenues. These customers may decide not to renew their subscriptions of our products and services, to terminate their agreements prior to the end of the subscription period or to reduce the size of their subscriptions. In addition, because we price our products on a sliding scale based on the number of mailboxes or users a customer has, consolidation within our customer base could adversely affect our revenues.

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We rely upon Symantec Corporation for technology that is critical to our anti-virus product. If we are unable to continue to use Symantec’s anti-virus technology, our ability to sell or continue to support subscriptions to our anti-virus products and services would be limited and our operating results could be harmed.

We rely upon certain of Symantec’s anti-virus technology as the engine for our anti-virus product, and we estimate that sales of our anti-virus module under our agreement with Symantec represented approximately 20% of our total revenues for the fiscal year ended January 31, 2004. Amounts charged to royalties pursuant to our agreement with Symantec were $2.0 million, $1.6 million and $1.2 million in fiscal years 2004, 2003 and 2002, respectively. Our agreement with Symantec relating to this anti-virus technology has a three-year term expiring in July 2005. Symantec also has the right to terminate this agreement upon the occurrence of certain events, including if we are subject to a change in control transaction or if we enter into any agreement that disrupts Symantec’s anti-virus small business revenue. In addition, Symantec currently sells an anti-spam product that could potentially compete with our anti-spam products and services, and Symantec could decide not to extend the term of our agreement. If our agreement with Symantec were to terminate, we would be required to license an anti-virus technology from another third party or develop such technology ourselves in order to sell an integrated anti-spam and anti-virus product. If we are unable to do so in a timely manner, our business and operating results would be harmed.

Because we generate substantially all of our revenues from two product lines, a reduction in sales from those product lines would harm our business and operating results.

Historically, we have derived substantially all of our revenues from subscriptions to our anti-spam and anti-virus product offerings. Although we have begun to offer more comprehensive messaging security software and services, we expect our anti-spam and anti-virus products will continue to account for the largest portion of our sales for the foreseeable future. Because of this revenue concentration, our business would be harmed by a decline in demand for, or in the prices of, these products. Factors that could affect demand or prices include any change in our pricing model, increased competition, technological change, lower growth or a contraction in the worldwide demand for anti-spam or anti-virus software technology, maturation in the markets for these products or other risks described in this document. The occurrence of any of these events could have a material adverse effect on our business and operating results. In addition, any efforts to expand beyond our existing products may never result in significant revenue growth for us and may divert management resources from existing operations and require us to commit significant financial resources to an unproven business, which may harm our business and operating results.

Defects in our products could diminish demand for our products and services and cause us to lose customers.

Because our products and services are complex, they may have errors or defects that users identify after they begin using them, which could harm our reputation and our business. In particular, our anti-spam products may identify some legitimate emails as unwanted or unsolicited spam, or we may not be able to filter out a sufficiently high percentage of unsolicited or unwanted messages sent to the email accounts of our customers. Complex software products like ours frequently contain undetected errors when first introduced or when new versions or

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enhancements are released. In addition, we may be unable to respond in a prompt manner, or at all, to new methods of attacking a messaging system, such as new spamming techniques or virus attacks. We have from time to time found defects in our products and errors in our existing products may be detected in the future. Any such errors, defects or other performance problems could impact the perceived reliability of our products and services and hurt our reputation. If that occurs, customers could elect not to renew or terminate their subscriptions and we could lose future sales. In addition, while our subscription agreements typically contain provisions that limit our liability to our customers, these limitations may not be enforced in certain circumstances and we may be liable for lost business or other claims by our customers if our products do not perform as expected.

System failures, power outages, interruptions or delays in Internet and data center services from our third party providers could impair the delivery of our products and services and harm our business.

Our corporate headquarters, out-sourced data center and other third party service providers are located in northern California, a region known for seismic activity. Consequently, Internet and data center services we receive are subject to damage or interruption from earthquakes, as well as from floods, fires, power loss, telecommunications failures and similar events. Our back-up operations center in Sacramento has not yet been established and may be inadequate once it is established, and our business interruption insurance may not be enough to compensate us for any losses that may occur. The Internet and data center services are also subject to sabotage, intentional acts of malfeasance and similar misconduct. Despite precautions taken by Internet service providers and data centers, the occurrence of a natural disaster or other unanticipated problems at the facilities of our third party providers or our headquarters could result in unanticipated interruptions in Internet and data center services and consequently cause delays in our customers’ access to the products and services we provide. Interruptions in our products and services may reduce our revenue, cause customers to terminate their subscriptions, adversely affect our renewal rates and delay product sales. Our business will be harmed if our customers and potential customers believe our products and services are unreliable.

Because we recognize revenues from subscriptions for our products and services over the term of the subscription, downturns or upturns in sales may not be immediately reflected in our operating results, which makes our business more difficult to evaluate. In addition, our ability to renew our contracts with our customers will have an important impact on our business.

Our customers subscribe to use our products and services for a limited duration of time with all version, software and filtering rules updates included, as opposed to purchasing a single version of traditional software with perpetual access to only one version. We recognize revenues from our customers monthly over the terms of their subscription agreements, which are typically 12 to 24 months. As a result, much of the revenues we report in each quarter are deferred revenue from subscription agreements entered into during previous quarters. Consequently, a decline in new or renewed subscriptions in any one quarter will not necessarily be fully reflected in the revenues recognized in that quarter and will negatively affect our revenues recognized in future quarters. In addition, we may be unable to adjust our cost structure to reflect these reduced revenues. Accordingly, the effect of significant downturns in sales and market acceptance of our products and services may not be fully reflected in our results of operations until future periods. Our subscription model also makes it difficult for us to rapidly increase our revenues through

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additional sales in any period, as revenues from new customers must be amortized over the applicable subscription term.

In addition, historically, a high percentage of our customer contracts are executed and have their subscription terms end at the end of each calendar year. As a result, we expect a substantial portion or our customer contracts to come up for renewal at the end of each calendar year, so any material increase in our non-renewal rates would first be apparent in our fourth fiscal quarter. We have limited historical data with respect to rates of customer subscription renewals and terminations, so we cannot accurately predict customer renewal or termination rates.

We are dependent upon our distribution channels for a majority of the sales of our products, and we would be adversely affected if these relationships are terminated or diminished.

A majority of our product sales is made through value-added resellers, systems integrators, OEMs and other partners. Our operating plan assumes that the percentage of our total revenues generated by our resellers and distributors will increase over time. Because we have limited visibility into demand changes in the market segments in which our channel partners operate, reliance on these channels causes more uncertainties in our business and increases the risk that we may not plan effectively for the future, which could result in adverse operating results in future periods. When our channel partners sell our products and services, these partners are responsible for most aspects of the relationship with the end customer. As such, we may not become aware of issues or dissatisfaction with our products and services, which could result in lost business and damage to our reputation.

Our channel partners may also offer our competitors’ products, and our agreements with our channel partners may be terminated by them or by us without cause on the anniversary of the agreement. Their decisions to sell our products are partly a function of pricing, terms and special promotions offered by us and our competitors and other factors that we do not control and cannot predict. We would be adversely affected if our partners chose to sell greater amounts of competitive offerings relative to the amount they sell of our offerings. In addition, we sell our products through OEMs who bundle our products with other products in a hardware device. We continuously seek to establish new OEM relationships and, conversely, may encounter OEMs that decide to replace our messaging security anti-spam software with a competitor’s product. If we lose an OEM relationship, our sales could be adversely affected. In addition, some of our distribution partners have experienced financial difficulties in the past, and others may experience financial difficulties in the future. If these partners do experience financial difficulties, we may experience reduced sales or increased write-offs, which would adversely affect our operating results.

We rely upon third parties for technology that is critical to our products, and if we are unable to continue to use this technology and future technology, our ability to sell or continue to support subscriptions to our products and services would be limited and our operating results could be harmed.

We rely on non-exclusive software license rights from third parties in technologies that are incorporated into and necessary for the operation and functionality of our products. Our licenses often require the payment of royalties or other consideration to third parties. Our success will depend in part on our continued ability to have access to these technologies, and we do not know whether these third-party technologies will continue to be licensed to us on commercially

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reasonable terms or at all. Our loss of license to, or the inability to support, maintain and enhance, software products we license from third parties could result in our customers having to upgrade their Brightmail products. In addition, a loss of license from third parties could lead to increased costs and delays or reductions in our product development, sales and support until we are able to develop functionally equivalent software or identify and obtain licenses to alternative third party software with comparable functionality, which we may be unable to do. As a result, our margins, market share and operating results could be significantly harmed. If any of these events occur, our business and operating results could be harmed.

Our reliance on open source code software imposes limitations on our ability to commercialize our products and subjects us possible intellectual property litigation.

We incorporate open source code software into our products. Open source code may impose limitations on our ability to commercialize our products because, among other reasons, open source license terms may be ambiguous and may result in unanticipated obligations regarding our products, and open source software cannot be protected under trade secret law. In addition, it may be difficult for us to accurately determine the developers of the open source code and whether the acquired software infringes third party intellectual property rights. For example, a lawsuit was recently filed against IBM Corporation alleging that IBM misappropriated proprietary UNIX code or derivative works into certain open source software. Claims of infringement or misappropriation against us could require us to seek to obtain licenses from third parties in order to continue offering our products, to reengineer our products or to discontinue the sale of our products in the event reengineering could not be accomplished on a timely basis. If this occurs, our business and operating results could be harmed.

If we acquire companies or technologies in the future, they could prove difficult to integrate, disrupt our business, dilute stockholder value and adversely affect our operating results.

We may acquire or make investments in complementary companies, services and technologies in the future. We have not made any acquisitions or investments to date, and therefore our ability as an organization to make acquisitions or investments is unproven. Acquisitions and investments involve numerous risks, including:

•  difficulties in integrating operations, technologies, services and personnel;

•  diversion of financial and managerial resources from existing operations;

•  risk of entering new markets;

•  potential write-offs of acquired assets;

•  potential loss of key employees;

•  inability to generate sufficient revenues to offset acquisition or investment costs; and

•  delays in customer purchases due to uncertainty.

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Acquisitions could also require us to record substantial amounts of goodwill and other intangible assets. Any future impairment of such goodwill, and the amortization of other intangible assets, would adversely affect our operating results. In addition, if we finance acquisitions by issuing convertible debt or equity securities, our existing stockholders may be diluted which could affect the market price of our stock. If we finance such acquisitions with bank debt or high yield debt, these arrangements would impose substantial operating covenants and result in interest expense that could adversely affect our business and operating results. As a result, if we fail to properly evaluate and execute acquisitions or investments, our business and operating results may be seriously harmed.

International sales expose us to additional risks that have potential to adversely affect our business and operating results.

During fiscal 2003 and 2004, approximately 8% and 14%, respectively, of our recognized revenues were derived from sales to customers outside the United States, and in the future, we plan to invest aggressively to expand our international sales efforts. International operations and sales subject us to risks and challenges that we would otherwise not face if we conducted our business only in the United States. The risks and challenges associated with operations and sales to customers outside the United States include:

•  localization of our products and services, including translation of the interface of our products into foreign languages, development of technology to identify, assess and analyze messages written in foreign languages, creation of localized agreements and associated expenses;

•  foreign currency fluctuations;

•  a largely unproven market for our products and services outside of the United States;

•  laws and business practices favoring local competitors;

•  compliance with multiple, conflicting and changing governmental laws and regulations, including employment, tax, privacy and data protection laws and regulations;

•  our ability to adapt sales practices and customer requirements in different cultures;

•  differing abilities to protect our intellectual property rights;

•  difficulties in staffing and managing foreign operations;

•  longer accounts receivable payment cycles and other collection difficulties; and

•  regional economic and political conditions.

Most of our international subscription fees are currently payable to us in U.S. dollars. If we successfully expand our international sales, we expect that the percentage of subscription fees payable in foreign currencies will increase. Consequently, our potential exposure from fluctuations in the value of the U.S. dollar and foreign currencies could increase. Currently, we do not hedge our exposure to currency fluctuations. Fluctuations in the value of the U.S. dollar and foreign currencies may make our products more expensive for international customers, which could harm our business. If we fail to realize increased sales from our investment in expanded international operations, our business and operating results will be adversely affected.

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Computer hackers may damage our products, services and systems, which could cause interruptions in our service and harm to our business.

From time to time we and our customers may be targets of computer hackers who, among other things, create viruses to sabotage or otherwise attack companies’ products and services. For example, there was recently a spread of viruses, or worms, that intentionally deleted anti-virus and firewall software. Also, a number of websites and systems have been subject to denial of service attacks, where a website is bombarded with information requests eventually causing the website and system to overload, resulting in a delay or disruption of services. Our website, system, products and services, as well as our customers’ websites and systems, may be the subject of attacks by hackers. If successful, any of these events could damage users’ or our computer systems and result in an interruption of the provisioning of our products and services, force us to incur substantial costs to fix technical problems or result in hackers gaining access to our technical and other proprietary information, which could harm our business and operating results.

Failure to protect our intellectual property rights could adversely affect our business.

If we fail to protect our intellectual property rights adequately, our competitors might gain access to our technology, and our business might be harmed. In addition, defending our intellectual property rights might entail significant expense. Any of our patents, trademarks or other intellectual property rights may be challenged by others or invalidated through administrative process or litigation. We currently have three issued patents. Although we also have filed several pending or provisional patents, we may be unable to obtain additional patent protection in the future. Our current or any future patents may not provide us with any competitive advantages, or may be challenged by third parties. Furthermore, legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain. Effective patent, trademark, copyright and trade secret protection may not be available to us in every country in which our products and services are available. The laws of some foreign countries may not be as protective of intellectual property rights as those in the United States, and mechanisms for enforcement of intellectual property rights may be inadequate. Accordingly, despite our efforts, we may be unable to prevent third parties from infringing upon or misappropriating our intellectual property.

We might be required to spend significant resources to monitor and protect our intellectual property rights. We may initiate claims or litigation against third parties for infringement of our proprietary rights or to establish the validity of our proprietary rights. Any litigation, whether or not it is resolved in our favor, could result in significant expense to us and divert the efforts of our technical and management personnel.

If we are sued by third parties for alleged infringement of proprietary rights, our business and operating results could be harmed.

The software and Internet markets are characterized by the existence of a large number of patents, trademarks and copyrights and by frequent litigation based on allegations of infringement or other violations of intellectual property rights. As the number of entrants into our market increases, the possibility of an intellectual property claim against us grows. Our patents, trademarks, copyrights and other intellectual property rights may not withstand third-party claims or rights against their use. Any intellectual property claims, with or without merit,

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could be time-consuming and expensive to litigate or settle and could divert management attention from executing our business plan. In addition, almost all of our subscription agreements with customers and other agreements with reseller, distributors and other partners require us to indemnify our customers and partners for third-party intellectual property infringement claims, which would increase the cost to us of an adverse ruling in such a claim. An adverse determination could also prevent us from offering our products to others, cause the sales of our products to decrease or require us to pay substantial license fees or royalties in connection with sales of our products.

We may become involved in litigation, which could be costly and time consuming to defend.

We may become involved in litigation such as securities class actions, intellectual property, employment (unfair hiring or terminations) and product liability claims, among others. For example, we routinely receive communications from parties who claim that we intentionally blocked the intended recipient from receiving their emails. Parties whose emails are blocked by our products may also seek redress against us for labeling them as spammers or for interfering with their business. In particular, our reputation services identify certain email sources that we determine are generating spam or viruses, and our customers for this service have blocked all email from those sources. Any of these sources could claim we are interfering with the lawful conduct of their business. Although we believe we have the authority under applicable law to block unwanted emails and none of these claims have ever resulted in any liability to us, we cannot guarantee this or another favorable outcome for any such claims that may be brought against us in the future. Litigation involves costs in defending the action and the risk of an adverse judgment. Any resulting litigation, with or without merit, could result in substantial costs and divert management’s attention and resources, which could seriously harm our business and operating results.

Our growth could strain our personnel and infrastructure resources, and if we are unable to implement appropriate controls and procedures to manage our growth, we may not be able to successfully implement our business plan.

We are currently experiencing a period of rapid growth in our headcount, operations and product development, which has placed, and will continue to place, a significant strain on our management, administrative, operational and financial infrastructure. For example, during fiscal 2004, we increased our headcount from 81 employees to 127 employees and have expanded our operations into a number of countries. We anticipate that further growth will be required to achieve increases in our customer base and development of additional product lines, as well as our expansion into new geographic areas.

Our success will depend in part upon the ability of our senior management to manage this growth effectively. To do so, we must continue to hire, train and manage new employees as needed. If our new hires perform poorly, or if we are unsuccessful in hiring, training, managing and integrating these new employees, or if we are not successful in retaining our existing employees, our business may be harmed. To manage the expected growth of our operations and personnel, we will need to continue to improve our operational, financial and management controls and our reporting systems and procedures. The additional headcount and capital investments we are adding will increase our cost base, which will make it more difficult for us to offset any future revenue shortfalls by offsetting expense reductions in the short term. If we fail to successfully manage our growth, we will be unable to execute our business plan.

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We are dependent on our management team, and the loss of any key member of this team may prevent us from implementing our business plan in a timely manner.

Our success depends largely upon the continued services of our executive officers and other key personnel. We are also substantially dependent on the continued service of our existing development personnel because of the complexity of our service and technologies. The employment arrangements we have with our executive officers, key management and development personnel are at-will agreements that do not require these individuals to remain our employees. Therefore, such employees could terminate their employment with us at any time without penalty and may go to work for one or more of our competitors. We do not maintain key person life insurance policies on any of our employees. The loss of one or more of our key employees could seriously harm our business.

Because competition for our target employees is intense, we may not be able to attract and retain the highly skilled employees we need to support our planned growth.

To execute our growth plan, we must attract and retain highly qualified personnel. Competition for these employees is intense, especially for engineers with high levels of experience in developing messaging security solutions. We may not be successful in attracting and retaining qualified personnel. We have from time to time in the past experienced, and we expect to continue to experience in the future, difficulty in hiring and retaining highly skilled employees with appropriate qualifications. Many of the companies with which we compete for experienced personnel have greater resources than we have. If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects could be severely harmed.

Evolving regulation of the Internet and unregulated commercial email may affect us adversely.

As Internet commerce continues to evolve, increasing regulation by federal, state or foreign agencies becomes more likely. For example, the United States government recently enacted the CAN-SPAM Act of 2003, which is largely directed at curbing fraudulent and deceptive practices used in connection with the transmission of email messages. Strict legal prohibitions on the transmission of unsolicited commercial email, coupled with aggressive enforcement, could result in the transmission of less unsolicited commercial email and, thus, a corresponding decrease in demand for our products and services. If legal developments alone prove effective in eliminating or sharply reducing spam, the market for our products and services would be adversely affected.

In addition, taxation of products and services provided over the Internet or other charges imposed by government agencies or by private organizations for accessing the Internet may also be imposed. Any regulation imposing greater fees for Internet use or restricting information exchange over the Internet could result in a decline in the use of the Internet and the viability of Internet-based products and services, which could harm our business and operating results.

Risks related to this offering

There has been no prior market for our common stock. The trading price of our common stock is likely to be volatile, and you might not be able to sell your shares at or above the initial public offering price.

Prior to this offering, there has been no public market for our common stock. An active trading market for our common stock may never develop or be sustained, which would depress the value

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of our common stock. In addition, the initial public offering price of our common stock has been determined through negotiations between us and the representatives of the underwriters, and may not bear any relationship to the price at which our common stock will trade upon completion of this offering. The trading prices of the securities of technology companies have historically been highly volatile. Accordingly, the trading price of our common stock is likely to be subject to wide fluctuations. Factors affecting the trading price of our common stock will include:

•  variations in our operating results;

•  announcements of technological innovations, new products or product enhancements, strategic alliances or significant agreements by us or by our competitors;

•  recruitment or departure of key personnel;

•  changes in the estimates of our operating results or changes in recommendations by any securities analysts that elect to follow our common stock; and

•  market conditions in our industry, the industries of our customers and the economy as a whole.

In addition, the trading price of our common stock could decline for reasons unrelated to our business, operating results or financial condition. The trading price of our common stock might also decline in reaction to events that affect other companies in our industry even if these events do not directly affect us. Because we do not intend to pay any dividends, you will not receive any proceeds from our common stock until you sell it. As a result of the foregoing considerations, we cannot assure you that you will receive any return on your investment when you do sell your shares, or that you will not lose your entire investment.

Future sales of shares by existing stockholders could cause our stock price to decline.

If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market after the 180-day contractual lock-up and other legal restrictions on resale discussed in this prospectus lapse, the trading price of our common stock could decline below the initial public offering price. Based on shares outstanding as of February 29, 2004, upon completion of this offering, we will have outstanding              shares of common stock, assuming no exercise of outstanding options and warrants. Of these shares, only shares of common stock sold in this offering will be freely tradable, without restriction, in the public market. J.P. Morgan Securities Inc. may, in its sole discretion, permit our stockholders to sell shares prior to the expiration of the lock-up agreements.

After the lock-up agreements pertaining to this offering expire 180 days from the date of this prospectus, an additional              shares will be eligible for sale in the public market,              of which are held by directors, executive officers and other affiliates and will be subject to volume limitations under Rule 144 under the Securities Act of 1933, as amended, and various vesting agreements. In addition, the              shares subject to outstanding warrants and the              shares subject to outstanding options and reserved for future issuance under our 1998 Stock Option Plan, 2004 Equity Incentive Plan and 2004 Employee Stock Purchase Plan will become eligible for sale in the public market to the extent permitted by the provisions of various vesting agreements, the lock-up agreements and Rules 144 and 701 under the Securities Act of 1933, as amended. If these additional shares are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline.

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The concentration of our capital stock ownership with insiders upon the completion of this offering will likely limit your ability to influence corporate matters.

We anticipate that our executive officers, directors and affiliated entities will together beneficially own approximately          percent of our common stock outstanding after this offering. As a result, these stockholders, acting together, will have control over most matters that require approval by our stockholders, including the election of directors and approval of significant corporate transactions. Corporate action might be taken even if other stockholders, including those who purchase shares in this offering, oppose them. This concentration of ownership might also have the effect of delaying or preventing a change of control of our company that other stockholders may view as beneficial.

Because Symantec has a representative on our board of directors and will own         % of our outstanding stock following this offering, it may have the ability to influence our operations and business.

Upon completion of this offering, Symantec will own approximately              of our outstanding stock, and currently, one of Symantec’s officers is a member of our eight-member board of directors. Accordingly, Symantec’s officer will have a vote on matters relating to our operations and business, and Symantec will have a vote on matters requiring approval by our stockholders, including the election of directors and approval of significant corporate transactions, such as mergers or other business combinations. In addition, Symantec currently sells an anti-spam product that could potentially compete with our anti-spam products and services, and it may have interests that are different than ours.

Our management will have broad discretion over the use of the proceeds to us from this offering and might not apply the proceeds of this offering in ways that increase the value of your investment.

Our management will have broad discretion to use the net proceeds from this offering, and you will be relying on the judgment of our management regarding the application of these proceeds. Our management might not apply the net proceeds of this offering in ways that increase the value of your investment. We expect to use the net proceeds from this offering for general corporate purposes, including working capital and capital expenditures, and for possible investments in, or acquisitions of, complementary services or technologies. We have not allocated these net proceeds for any specific purposes. Our management might not be able to yield a significant return, if any, on any investment of these net proceeds.

You will experience immediate and substantial dilution in the net tangible book value of the shares you purchase in this offering.

The initial public offering price of our common stock will be substantially higher than the book value per share of the outstanding common stock after this offering. Therefore, based on an assumed offering price of $             per share, investors in this offering will suffer immediate and substantial dilution of approximately $             per share. If outstanding options and warrants to purchase our common stock are exercised, investors in this offering will experience additional dilution.

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Provisions in our amended and restated certificate of incorporation and bylaws or Delaware law might discourage, delay or prevent a change of control of our company or changes in our management and, therefore, depress the trading price of our common stock.

Our amended and restated certificate of incorporation and bylaws contain provisions that could depress the trading price of our common stock by acting to discourage, delay or prevent a change of control of our company or changes in our management that the stockholders of our company may deem advantageous. These provisions:

•  provide that directors may only be removed “for cause” and only with the approval of 66 ²/3 percent of our stockholders;

•  require super-majority voting to amend some provisions in our amended and restated certificate of incorporation and bylaws;

•  authorize the issuance of “blank check” preferred stock that our board could issue to increase the number of outstanding shares and to discourage a takeover attempt;

•  limit the ability of our stockholders to call special meetings of stockholders;

•  prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;

•  provide that the board of directors is expressly authorized to make, alter or repeal our bylaws; and

•  and establish advance notice requirements for nominations for election to our board or for proposing matters that can be acted upon by stockholders at stockholder meetings.

We also will be subject to provisions of the Delaware General Corporation Law that, in general, prohibit any business combination with a beneficial owner of 15% or more of our common stock for three years after the point in time that such stockholder acquired shares constituting 15% or more of our shares, unless the holder’s acquisition of our stock was approved in advance by our board of directors.

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Special note regarding forward-looking statements

This prospectus, including the sections entitled “Prospectus summary,” “Risk factors,” “Management’s discussion and analysis of financial condition and results of operations” and “Business,” contains forward-looking statements that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this prospectus, including statements regarding our future financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “potential,” or the negative of these terms or other similar expressions. We have based these forward-looking statements on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions described in “Risk factors” and elsewhere in this prospectus, regarding, among other things:

•  the future growth of the messaging security markets;

•  our business strategies and development plans;

•  new products and technologies;

•  future expenses; and

•  competition and competitive factors of the messaging security markets.

These risks are not exhaustive. Other sections of this prospectus include additional factors that could adversely impact our business and operating results. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we nor any other person assume responsibility for the accuracy and completeness of the forward-looking statements. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this prospectus to conform these statements to actual results or to changes in our expectations.

You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement on Form S-1, of which this prospectus is a part, that we have filed with the Securities and Exchange Commission, completely and with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

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Use of proceeds

We estimate that the net proceeds we will receive from this offering will be approximately $             million, at an assumed initial public offering price of $             per share, after deducting estimated offering expenses and estimated underwriting discounts and commissions payable by us. If the underwriters exercise their over-allotment option in full, we estimate that our net proceeds will be approximately $             million.

The principal purposes of this offering are to create a public market for our common stock, to obtain additional capital and to facilitate our future access to the public equity markets.

We intend to use the net proceeds from this offering for general corporate purposes, including working capital and capital expenditures, but we have not designated any specific uses. We may also use a portion of the net proceeds to fund possible investments in, or acquisitions of, complementary businesses, products or technologies or establishing joint ventures. We have no current agreements or commitments with respect to any investment, acquisition or joint venture, and we currently are not engaged in negotiations with respect to any investment, acquisition or joint venture. Accordingly, our management will have broad discretion in applying the net proceeds of this offering. Pending these uses, we intend to invest the net proceeds in short-term interest-bearing, investment grade securities.

The amount and timing of what we actually spend for these purposes may vary significantly and will depend on a number of factors, including our future revenues and cash generated by operations and the other factors described in “Risk factors.” We may find it necessary or advisable to use portions of the proceeds for other purposes.

Dividend policy

We have never declared or paid any cash dividends on our common stock or other securities. We currently anticipate that we will retain all of our future earnings for use in the expansion and operation of our business and do not anticipate paying any cash dividends in the foreseeable future. We also may incur indebtedness in the future that may prohibit or effectively restrict the payment of dividends on our common stock. Any future determination related to our dividend policy will be made at the discretion of the board.

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Capitalization

The following table summarizes our cash, cash equivalents and short-term investments and capitalization as of January 31, 2004,

•  on an actual basis;

•  on a pro forma basis to reflect the conversion of all outstanding shares of convertible preferred stock into common stock upon the closing of this offering and to give effect to changes in our authorized shares as a result of our Delaware reincorporation; and

•  on a pro forma as adjusted basis to reflect of the foregoing and our receipt of estimated net proceeds from the sale of our shares of common stock in this offering (at an assumed initial public offering price of $             per share and after deducting estimated underwriting discounts and commissions and estimated offering expenses).

You should read this table in conjunction with “Use of proceeds,” “Selected consolidated financial data,” “Management’s discussion and analysis of financial condition and results of operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.

January 31, 2004, (in thousands except share data)	Actual			Pro forma			Pro forma as adjusted
Cash, cash equivalents and short-term investments	$	26,837		$	26,837		$
Convertible preferred stock, $0.001 par value; 21,135,705 shares authorized, 20,939,375 shares issued and outstanding, actual; 5,000,000 shares authorized, none issued and outstanding, pro forma and pro forma, as adjusted		53,210			—			—
Stockholders’ equity (deficit):
Common stock, $0.001 par value, 51,000,000 shares authorized; 6,005,006 shares issued and outstanding, actual; 51,000,000 shares authorized, 26,944,381 shares issued and outstanding, pro forma; 100,000,000 shares authorized,              shares issued and outstanding, pro forma as adjusted		4,692			57,902
Deferred stock-based compensation		(1,380	)		(1,380	)		(1,380	)
Accumulated other comprehensive income		6			6			6
Accumulated deficit		(38,833	)		(38,833	)		(38,833	)
Total stockholders’ equity (deficit)		(35,515	)		17,695
Total capitalization	$	17,695		$	17,695		$

The number of shares of our common stock shown above to be outstanding after this offering is based on shares outstanding as of January 31, 2004 and gives effect to Delaware reincorporation that will occur prior to the completion of this offering. This information excludes:

•  6,151,184 shares of common stock issuable upon the exercise of outstanding stock options as of January 31, 2004, with exercise prices ranging from $0.05 to $0.95 per share and a weighted average exercise price of $0.76 per share;

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•  73,099 shares of common stock issuable upon the exercise of warrants outstanding as of January 31, 2004, with exercise prices ranging from $1.50 to $5.02 and a weighted average exercise price of $2.82 per share; and

•   2,500,000 shares of common stock to be available for issuance under our 2004 Equity Incentive Plan, and 1,050,000 shares of common stock to be available for issuance under our 2004 Employee Stock Purchase Plan, each plan to be effective upon the completion of this offering. The 2004 Equity Incentive Plan and the 2004 Employee Stock Purchase Plan each contain a provision that automatically increase their share reserve each year, as more fully described in “Management—Benefit plans.”

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Dilution

If you invest in our common stock, your interest will be diluted to the extent of the difference between the public offering price per share of our common stock and the pro forma as adjusted net tangible book value per share of our common stock immediately after this offering. Pro forma net tangible book value per share represents the amount of our total tangible assets less total liabilities, divided by the pro forma number of shares of our common stock outstanding assuming the conversion of all shares of convertible preferred stock outstanding as of January 31, 2004, into 20,939,375 shares of common stock.

Investors participating in this offering will incur immediate, substantial dilution. Our pro forma net tangible book value was $17.7 million, or $0.66 per share of common stock, after giving effect to the conversion of all outstanding shares of our convertible preferred stock into shares of our common stock upon the completion of this offering. Assuming the sale by us of              shares of common stock offered in this offering at an assumed initial public offering price of $             per share, and after deducting the underwriting discount and estimated offering expenses, our pro forma as adjusted net tangible book value as of                     , 2004, would have been $             million, or $             per share of common stock. This represents an immediate increase in pro forma net tangible book value of $             per share of common stock to our existing stockholders and an immediate dilution of $             per share to the new investors purchasing shares in this offering.

The following table illustrates this per share dilution:

Assumed initial public offering price per share		$
Pro forma net tangible book value per share before the offering	$
Increase per share attributable to new public investors
Pro forma net tangible book value per share after this offering
Dilution per share to new public investors		$

The following table sets forth, on a pro forma as adjusted basis as of                     , 2004, the difference between the number of shares of common stock purchased from us, the total consideration paid, and the average price per share paid by existing stockholders and by new public investors before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, using an assumed initial public offering price of $             per share:

	Shares purchased		Total consideration		Average price per share
	Number	Percent	Amount	Percent
Existing stockholders		%	$	%	$
New investors
Total		100.0%	$	100.0%

If the underwriters’ over-allotment option is exercised in full, the number of shares of common stock held by existing stockholders will be reduced to         % of the total number of shares of common stock to be outstanding after this offering; and the number of shares of common stock held by the new investors will be increased to              shares or         % of the total number of shares of common stock outstanding after this offering. See “Principal stockholders.”

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The discussion and tables above assume no exercise of the underwriters’ over-allotment option, and the conversion of all our outstanding shares of convertible preferred stock into 20,939,375 shares of common stock, and excludes:

•           shares of common stock issuable upon the exercise of outstanding stock options as of                 , with exercise prices ranging from          to          per share and a weighted average exercise price of $0.78 per share;

•           shares of common stock issuable upon the exercise of warrants outstanding as of                 , with exercise prices ranging from          to          and a weighted average exercise price of $2.82 per share; and

•  2,500,000 shares of common stock to be available for issuance under our 2004 Equity Incentive Plan, and 1,050,000 shares of common stock to be available for issuance under our 2004 Employee Stock Purchase Plan, each plan to be effective upon the completion of this offering. The 2004 Equity Incentive Plan and the 2004 Employee Stock Purchase Plan each contain a provision that automatically increases their share reserve each year, as more fully described in “Management—Employee benefit plans.”

To the extent that these options and warrants are exercised, there will be further dilution to new investors. In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.

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Selected consolidated financial data

The following table sets forth our selected consolidated financial data. The data should be read in conjunction with “Management’s discussion and analysis of financial condition and results of operations” following this section and the consolidated financial statements, related notes, and other financial information included herein. The following selected consolidated statement of operations data for the three years ended January 31, 2004, and the selected consolidated balance sheet data as of January 31, 2003 and 2004, are derived from the audited consolidated financial statements of the company. The consolidated statement of operations data for the two years ended January 31, 2001 and the selected consolidated balance sheet data as of January 31, 2000, 2001 and 2002 are derived from unaudited consolidated financial statements not included in this prospectus. The historical results are not necessarily indicative of results to be expected in any future period.

Year ended January 31,
(in thousands, except per share data)	2000			2001			2002			2003			2004
Consolidated statement of operations:
Revenues (1)	$	93		$	1,953		$	6,428		$	12,184		$	26,046
Cost of revenues		576			1,333			3,025			3,561			5,548
Gross profit (loss)		(483	)		620			3,403			8,623			20,498
Operating expenses:
Product development		2,979			5,692			6,575			6,393			7,432
Sales and marketing		4,055			4,095			5,361			4,292			8,004
General and administrative		1,291			2,849			2,627			3,032			3,550
Stock-based compensation (2)		252			1,241			595			149			472
Total operating expenses		8,577			13,877			15,158			13,866			19,458
Operating income (loss)		(9,060	)		(13,257	)		(11,755	)		(5,243	)		1,040
Other income:
Other income (expense)		(53	)		38			—			5			36
Interest income		215			1,223			1,025			352			243
Interest expense		(79	)		(200	)		(114	)		(88	)		(38	)
Income (loss) before provision for income taxes		(8,977	)		(12,196	)		(10,844	)		(4,974	)		1,281
Provision for income taxes		—			—			—			—			(112	)
Net income (loss)	$	(8,977	)	$	(12,196	)	$	(10,844	)	$	(4,974	)	$	1,169
Net income (loss) per share:
Basic (3)	$	(3.49	)	$	(3.11	)	$	(2.17	)	$	(0.87	)	$	0.20
Diluted (3)	$	(3.49	)	$	(3.11	)	$	(2.17	)	$	(0.87	)	$	0.04
Pro forma (unaudited) (3) (4)													$	0.04
Weighted average shares used in per share calculations:
Basic (3)		2,574			3,924			4,997			5,691			5,878
Diluted (3)		2,574			3,924			4,997			5,691			30,499
Pro forma (unaudited) (3) (4)														30,499

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(1) Revenue from international sales prior to fiscal 2002 were not significant. Our revenues by geographic region for fiscal 2002, 2003 and 2004 were as follows:

Year ended January 31,
(in thousands)	2002		2003		2004
Revenues by geography:
Americas	$	6,323	$	11,183	$	22,445
Europe, Middle East and Africa		105		767		2,968
Asia Pacific		—		234		633

(2) Amortization of deferred stock-based compensation expense categorized by the department it relates to:

Year Ended January 31,
(in thousands)	2002		2003		2004
Cost of revenues	$	5	$	1	$	23
Product development		162		57		78
Sales and marketing		147		22		152
General and administrative		281		69		219
Stock-based compensation	$	595	$	149	$	472

(3) For information regarding the computation of per share amounts, refer to notes 1 and 9 of the notes to our consolidated financial statements.

(4) The pro forma per share amounts in the consolidated statement of operations data table above give effect to the conversion of all outstanding shares of our convertible preferred stock into 20,939,375 shares of our common stock upon the closing of this offering, refer to note 9 of the notes to our consolidated financial statements.

January 31,
(in thousands)	2000			2001			2002			2003			2004
Balance sheet data:
Cash, cash equivalents and short-term investments	$	6,918		$	30,618		$	23,430		$	22,292		$	26,837
Deferred revenue		342			1,035			3,010			9,933			17,706
Working capital		5,258			29,553			19,588			15,306			17,889
Total assets		8,777			33,896			26,392			28,387			38,836
Long-term obligations, net of current portion		737			891			489			203			—
Convertible preferred stock		17,734			53,224			53,210			53,210			53,210
Accumulated deficit		(11,988	)		(24,184	)		(35,028	)		(40,002	)		(38,833	)
Total stockholders’ deficit		(11,685	)		(22,558	)		(32,759	)		(37,221	)		(35,515	)

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Management’s discussion and analysis of

financial condition and results of operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes that appear in this prospectus. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this prospectus, particularly in “Risk factors.”

Overview

Brightmail is a leading provider of electronic messaging security software and services to enterprises and messaging service providers worldwide. We provide a comprehensive suite of products and services focused on securing the messaging infrastructure of businesses of all sizes and industries worldwide. Our proprietary products and services help customers protect their electronic messaging infrastructure by effectively identifying and disposing of unwanted or malicious messages while accurately allowing delivery of legitimate messages. These integrated products and services help our customers protect their systems from spam, viruses and fraudulent emails, as well as other security threats while allowing legitimate mail to be reliably and securely delivered.

We were founded in February 1998 and began offering our messaging security solutions in 1999. Our revenues have grown from $93,000 in fiscal 2000, the first full year in which we sold our products and services, to $26.0 million in fiscal 2004. We experienced our first profitable quarter in the fourth quarter of fiscal 2003, and we had net income of $1.2 million in fiscal 2004. Based on stock-based compensation we recorded as of January 31, 2004, we expect to amortize approximately $1.4 million in stock-based compensation over the next four years. Consequently, we expect these amortization charges to result in net losses on a quarterly and annual basis in fiscal 2005. In addition, we first achieved positive cash flows from operations in the third quarter of fiscal 2003, prior to which time we financed our operations primarily through equity financing. Since inception, we have raised a total of $53.2 million, primarily through issuances of convertible preferred stock. As of January 31, 2004, we had cash, cash equivalents and short-term investments totaling $26.8 million and an accumulated deficit of $38.8 million, and our customer base currently consists of over 2,000 customers with an aggregate of approximately 300 million end-user mailboxes under subscription.

We believe the principal driver behind the development of the market for our products is the need for a technological solution to the continued proliferation of spam and new and emerging messaging security threats. We further believe that our success in penetrating our target markets depends on the effectiveness and accuracy of our products and services, compared to those of our competitors, in addressing spam and related threats, as well as the success of our distribution strategy in gaining and sustaining market share in the United States and internationally. As such, if messaging security technology that is superior to ours becomes available or if an alternative solution gains greater market acceptance, our business and operating results will be adversely affected.

Our fiscal year ends on January 31. References to fiscal 2004, for example, refer to the 12 months ended January 31, 2004.

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Sources of revenues

Subscription revenue model. We derive all of our revenues from providing our products and services on a subscription basis. We sell our products and services through the combination of our indirect sales channels, including distributors, resellers, business outsourcing and hosted service providers, large global systems integrators, OEMs and appliance vendors, as well as through the efforts of our direct sales organization. We recognize our revenues from indirect sales net of reseller discounts on a sell-through basis. The typical subscription term of our contracts is 12 to 24 months, and these contracts are generally non-cancelable. We generally price our products and services on a per-subscriber basis, and to date we have not experienced material competitive pricing pressures. In addition, over the past three years, our revenues have increased due to increased demand for our products and services.

Deferred revenue. We typically invoice our customers for the entire contract term in advance of the subscription period. Amounts that have been invoiced are recorded in accounts receivable and deferred revenue, which we then amortize into revenues ratably over the period during which our products and services have been prepaid. We believe deferred revenue is generally a good indicator of future revenues and provides visibility to a significant percentage of our quarterly revenues.

Cost of revenues and operating expenses

Cost of revenues. Cost of revenues consists primarily of expenses associated with the deployment and management of our filtering rule production infrastructure, royalties paid to our anti-virus provider, expenses related to providing customer support and allocated overhead. Over the next several months, we intend to establish a Sacramento data center to implement redundant filter update delivery systems. In connection with establishing this data center, we expect our costs of revenues to increase over the course of fiscal 2005.

Product development. Product development expenses consist primarily of salaries and related expenses for our product development staff, the cost of outside contractors and allocated overhead. Our product development efforts are focused on improving and enhancing our existing product and service offerings as well as developing new proprietary technology. We expect that research and development expenses will increase in absolute dollars as we seek to expand our technology and product offerings.

Sales and marketing. Sales and marketing expenses consist primarily of salaries and related expenses for our sales and marketing staff, including commissions, bonuses, marketing events, corporate communications, advertising, other brand building and product marketing expenses and allocated overhead. Commissions are based on the total amount of the subscription contract and are fully expensed in the period they are earned, which is typically the period the contract is executed. We expect sales and marketing expenses to increase in absolute dollars, as we plan to invest in international expansion, increase the number of indirect and direct sales personnel in order to add new customers and increase penetration within our existing customer base, build brand awareness and sponsor additional marketing events.

General and administrative. General and administrative expenses consist of salaries and related expenses for executive, finance and accounting, legal and human resources departments, professional fees, other corporate expenses and allocated overhead. We expect general and administrative expenses to increase in absolute dollars as we add personnel and incur additional professional fees and insurance costs related to the growth of our business and to our operations as a public company.

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Critical accounting policies

Our accounting policies are more fully described in Note 1 of the consolidated financial statements. As disclosed in Note 1, the preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ significantly from those estimates.

We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective and complex judgments.

Revenue recognition. We recognize revenue pursuant to the requirements of Statement of Position 97-2 “Software Revenue Recognition”, or SOP 97-2, issued by the American Institute of Certified Public Accountants, as amended by SOP 98-9 “Modification of SOP 97-2, Software Revenue Recognition, With Respect to Certain Transactions.”

We sell our products and services on a subscription basis. Our subscription contracts are generally non-cancelable with a term of 12 to 24 months. Because the support component of our products require continuous delivery and is not separable from the products, we recognize revenues from subscription contracts ratably over the term of the contracts. We generate substantially all of our revenue from two products. In accordance with SOP 97-2, we begin to recognize revenue from the licensing and support of our products when all of the following criteria are met: (1) we have entered into a legally binding agreement with a customer; (2) we deliver the products; (3) subscription agreement terms are deemed fixed or determinable; and (4) collection is probable. We generally invoice our customers in advance, either bi-annually, annually or quarterly. Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue and are amortized into revenue ratably over the term of the subscription contract as described above. Our subscription contracts do not contain general rights of return.

Revenue from sales made through our indirect sales channels are recognized as the product and support are delivered to the end users provided that all four of the SOP 97-2 revenue recognition criteria noted above are met. This is commonly referred to as the sell-through method.

When a subscription contract includes an acceptance provision, we do not recognize revenue until the earlier of the receipt of a written customer acceptance or, if not notified by the customer to cancel the subscription contract, the expiration of the acceptance period.

Allowance for doubtful accounts. We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. Estimated reserves are determined based upon the number of days that billings are past due and an evaluation of the potential risk of loss associated with specific problem accounts. The use of different estimates or assumptions could produce different allowance balances. While we believe our existing allowance for doubtful accounts is adequate, additional allowances may be required should the financial condition of our customers deteriorate or as unusual circumstances arise. Historically our losses from uncollectible accounts have not been material and at January 31, 2004, our allowance was $58,000.

Deferred income tax assets. At January 31, 2004, we had net operating loss carryforwards for federal income tax purposes of approximately $32.5 million, which will begin to expire in 2018

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and federal research and development tax credits of approximately $808,000, which will begin to expire in 2018. We also have state net operating loss carryforwards of approximately $25.5 million which expire beginning in 2006 and state research and development tax credits of approximately $602,000 which have no expiration date. These net operating loss carryforwards and day credits are carried on our balance sheet as a deferred tax asset. However due to uncertainty surrounding when or if we will realize the benefits of this deferred tax asset, we have recorded a 100% valuation allowance against our deferred tax asset. Statement of Financial Accounting Standards No. 109, ‘‘Accounting for Income Taxes’’ or SFAS 109 requires that a valuation allowance be set up to reduce a deferred tax asset to the extent it is more likely than not that the related tax benefits will not be realized. In order for a company to realize the tax benefits associated with a net operating loss, it must have taxable income within the applicable carryback or carryfoward periods. Sources of taxable income that may allow for the realization of those tax benefits include taxable income in the current year or prior years that is available though a carryback claim; future taxable income that will result from the reversal of existing taxable temporary differences, (i.e., the reversal of deferred tax liabilities) and future taxable income generated by future operations.

SFAS 109 indicates that all available evidence, both positive and negative, should be identified and considered in making a determination as to whether it is more likely than not that all or some portion of the deferred tax asset will not be realized. Examples of positive evidence include: strong earnings history; existing contracts or backlog; and assets with net built in gains for tax purposes. Examples of negative evidence include: a pretax loss for financial reporting purposes for the current year or a recent preceding year; a deficit in stockholders’ equity; a history of operating loss or tax credit carryforwards expiring unused; and cumulative losses in recent years.

We believe that our losses in recent years and deficit in stockholder’s equity present negative evidence that require a valuation allowance to be recorded to reduce to zero the deferred tax asset associated with the net operating loss carryforwards and temporary differences. Accordingly, we have not taken a benefit for that asset.

Accounting for stock-based awards. We record deferred stock-based compensation charges in the amount by which the exercise price of an option is less than the deemed fair value of our common stock at the date of grant. We amortize the deferred compensation charges using the accelerated method over the vesting period of the underlying option awards. As of January 31, 2004, we have recorded an aggregate of $1.4 million of deferred stock-based compensation. We currently expect this deferred stock-based compensation balance to be amortized as follows: $861,000 during fiscal 2005; $345,000 during fiscal 2006; $150,000 during fiscal 2007; and $24,000 during fiscal 2008. We have elected to use the intrinsic value method of accounting for stock option grants. The impact of expensing employee stock awards based on grant date fair value using the Black-Scholes option-pricing model is further described in Note 1 of the notes to our consolidated financial statements.

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Results of operations

The following table sets forth consolidated statement of operations data expressed as a percentage of total revenues for the periods indicated.

Year ended January 31,	2002		2003		2004
Consolidated statement of operations data:
Revenues	100	%	100	%	100	%
Cost of revenues	47		29		21
Gross profit	53		71		79
Operating expenses:
Product development	102		52		29
Sales and marketing	83		35		30
General and administrative	42		26		14
Stock-based compensation	9		1		2
Total operating expenses	236		114		75
Operating income (loss)	(183	)	(43	)	4
Other income:
Other income (expense), net	0		0		0
Interest income	16		3		1
Interest expense	(2	)	(1	)	(1	)
Income (loss) before provision for income taxes	(169	)	(41	)	4
Provision for income taxes	0		0		—
Net income (loss)	(169	)%	(41	)%	4	%
Revenues by geography:
Americas	98	%	92	%	86	%
Europe, Middle East and Africa	2		6		11
Asia Pacific	0		2		3

Fiscal year ended January 31, 2004 compared to fiscal year ended January 31, 2003

Revenues. Revenues were $26.0 million in fiscal 2004 compared to $12.2 million in fiscal 2003, an increase of $13.9 million, or 114%. Microsoft, our largest customer, accounted for 18% of our revenues in fiscal 2004 and 17% of our revenues in fiscal 2003. Our primary agreement with Microsoft expires in December 2005, subject to interim non-renewal rights. If this agreement is terminated or if we are unable to extend the term of this agreement, our business and operating results would be harmed. The increase in revenue was driven primarily by the increased use of resellers and other partners to distribute our products and services.

Revenues in Europe, Middle East and Africa and Asia Pacific accounted for $3.6 million, or 14% of total revenues in fiscal 2004, compared to $1.0 million or 8% of total revenues, in fiscal 2003, an increase of $2.6 million or 260%. Increases in revenues in these territories were due to an increased market demand, fueled by increased email usage and the growth of spam.

Cost of revenues. Cost of revenues was $5.5 million, or 21% of total revenues, in fiscal 2004, compared to $3.6 million, or 29% of total revenues, in fiscal 2003, an increase of $2.0 million. The increase was primarily due to a combined incremental $1.1 million in compensation and related

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employee costs, including allocated overhead, for our production environment and customer support teams; $370,000 in increased royalties due to sales of our anti-virus product; additional depreciation and equipment expense of $272,000; and additional costs of collocation and bandwidth of $243,000. Cost of revenues as a percent of total revenues has declined as a result of achieving economies of scale through our production environment across our growing customer base. Compensation costs increased in conjunction with a 55% increase in headcount in our customer support and production IT departments. Royalty expense paid to our anti-virus provider, which is generally a function of the number of seats of anti-virus software sold, increased as sales of the product increased. We believe that our agreement with our anti-virus provider was negotiated on an arms-length basis. Additional depreciation and equipment expense resulted from additional expenditures for servers and computer equipment, required to support our production IT environment.

Gross margin. Gross profit increased to $20.5 million in fiscal 2004 from $8.6 million in fiscal 2003. The increase was primarily due to increased revenue. Gross margin increased to 79% in fiscal 2004 from 71% in fiscal 2003 as we achieved better scalability with our production IT infrastructure.

Product development. Product development expenses were $7.4 million, or 29% of total revenues, in fiscal 2004, compared to $6.4 million, or 52% of total revenues in fiscal 2003, an increase of $1.0 million. All of the absolute dollar increase was due to a 33% increase in headcount devoted to product development efforts. We expect that costs will grow in aggregate dollars as we continue to improve our existing products and add new products to our product line.

Sales and marketing. Sales and marketing expenses were $8.0 million, or 30% of total revenues, in fiscal 2004, compared to $4.3 million, or 35% of revenues in fiscal 2003, an increase of $3.7 million. The absolute dollar increase was due to a headcount increase of 72% resulting in an additional $2.4 million in employee-related costs and commission expense and an increase in public relations and customer outreach programs of $890,000. We expect that sales and marketing costs will grow in aggregate dollars as we continue to expand into new markets. Had we included stock-based compensation related to sales and marketing expense of $152,000 for fiscal 2004 and $22,000 for fiscal 2003, sales and marketing expense would have increased by $3.8 million, or 89%. Increases in stock-based compensation are discussed below.

General and administrative. General and administrative expenses were $3.6 million, or 14% of revenues, in fiscal 2004, compared to $3.0 million, or 26% of revenues in fiscal 2003, an increase of $518,000. The absolute dollar increase was due to increased expenditures for insurance, taxes and general office expense of $204,000, an additional $193,000 in employee-related costs due to an increase of 50% in headcount and an additional $139,000 in professional fees. We expect that general and administrative costs will grow in aggregate dollars. Had we included stock-based compensation related to general and administrative expense of $219,000 for fiscal 2004 and $69,000 for fiscal 2003, general and administrative expense would have increased by $668,000, or 21%.

Stock-based compensation. We amortize deferred stock-based compensation, or the amount that equals the difference between the exercise price of stock options granted to our employees and what were considered to be the deemed fair values of our common stock on the date of the

grants over vesting periods, using a graded vesting method. Amortization of deferred stock-based compensation was $472,000, or 2% of revenues, in fiscal 2004, compared to $149,000, or

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1% of revenues in fiscal 2003, an increase of $323,000. The increase was due to additional deferred compensation charges recorded in fiscal 2004.

Other income (expense). Other income was $36,000, or less than 1% of revenues in fiscal 2004, compared to $5,000, or less than 1% of revenues in fiscal 2003, an increase of $31,000. The increase was due to a gain realized on the early extinguishment of capital leases during fiscal 2004.

Interest income. Interest income was $243,000, or 1% of revenues in fiscal 2004, compared to $352,000, or 3% of revenues in fiscal 2003, a decrease of $109,000. The decrease was due to declining interest rates in 2004, partially offset by an increase in cash and cash equivalent balances.

Interest expense. Interest expense was $38,000, or less than 1% of revenues in fiscal 2004, compared to $88,000, or 1% of revenues in fiscal 2003, a decrease of $50,000. The decrease was due to declining debt balances and the early extinguishment of several capital leases in fiscal 2004.

Fiscal year ended January 31, 2003 compared to fiscal year ended January 31, 2002

Revenues. Revenues were $12.2 million in fiscal 2003 compared to $6.4 million in fiscal 2002, an increase of $5.8 million, or 90%. Microsoft, our largest customer, accounted for 17% of our revenues in fiscal 2003 and 12% of our revenues in fiscal 2002. The increase in revenue was driven primarily by increased demand for our anti-spam product.

Revenues in Europe, Middle East and Africa and Asia Pacific accounted for $1.0 million, or 8% of total revenues in fiscal 2003, compared to $105,000 or 2% of total revenues, in fiscal 2002, an increase of $896,000.

Cost of revenues. Cost of revenues was $3.6 million, or 29% of total revenues, in fiscal 2003, compared to $3.0 million, or 47% of total revenues, in fiscal 2002, an increase of $536,000. The absolute dollar increase was primarily a result of increased royalties due to sales of our anti-virus product of $383,000 and $100,000 of increased headcount related expenses. Headcount in our customer support and production IT departments increased by 57% during this time period, driving increased compensation-related expenses.

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Gross margin. Gross profit increased to $8.6 million in fiscal 2003 from $3.4 million in fiscal 2002. The increase was primarily due to increased revenue. Gross margin increased to 71% in fiscal 2003 from 53% in fiscal 2002 primarily due to increased revenue and the benefits derived from leveraging our production IT infrastructure and customer support costs over a larger revenue base.

Product development. Product development expenses were $6.4 million, or 52% of total revenues, in fiscal 2003, compared to $6.6 million, or 102% of total revenues in fiscal 2002, a decrease of $182,000. The decrease was primarily due to the annualized impact of $327,000 as stated with a reduction in force of our product development personnel, which occurred at the end of fiscal 2002.

Sales and marketing. Sales and marketing expenses were $4.3 million, or 35% of total revenues, in fiscal 2003, compared to $5.4 million, or 83% of revenues in fiscal 2002, a decrease of $1.0 million. The decrease was primarily due to reduced marketing expenses of $698,000 during fiscal 2003, to the annualized impact of $139,000 of a reduction in force in our marketing department which occurred at the end of fiscal 2002 and to reduction in the amount of travel expenses incurred of $236,000.

General and administrative. General and administrative expenses were $3.0 million, or 26% of revenues, in fiscal 2003, compared to $2.6 million, or 42% of revenues in fiscal 2002, an increase of $405,000. The absolute dollar increase was primarily due to cash-based severance charges of approximately $101,000 and non-cash based severance charges of $243,000 for a former executive.

Stock-based compensation. Stock-based compensation was $149,000, or 1% of revenues, in fiscal 2003, compared to $595,000, or 9% of revenues in fiscal 2002, a decrease of $446,000. The decrease was due to declining balance amortization expense on deferred stock-based compensation.

Other income (expense). Other income was $5,000 in fiscal 2003, compared to zero in fiscal 2002, an increase of $5,000.

Interest income. Interest income was $352,000, or 3% of revenues, in fiscal 2003, compared to $1.0 million, or 16% of revenues in fiscal 2002, a decrease of $673,000. The decrease was due to declining cash and investment balances during fiscal 2003 as we use cash to fund our operations.

Interest expense. Interest expense was $88,000, or 1% of revenues, in fiscal 2003, compared to $114,000, or 2% of revenues in fiscal 2002, a decrease of $26,000. The decrease was due to reducing debt principal balances during fiscal 2003.

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Quarterly results of operations

The following tables set forth selected unaudited quarterly consolidated statement of operations data for our eight most recent quarters, as well as the percentage of revenues for each line item shown. The information for each of these quarters has been prepared on substantially the same basis as the audited consolidated financial statements included in the back of this prospectus and, in the opinion of management, includes all normal recurring adjustments necessary for the fair presentation of the results of operations for such periods. This data should be read in conjunction with the audited consolidated financial statements and the related notes included in the back of this prospectus. These quarterly operating results are not necessarily indicative of our operating results for any future period.

Three months ended (unaudited) (in thousands)	Apr. 30, 2002			Jul. 31, 2002			Oct. 31, 2002			Jan. 31, 2003			Apr. 30, 2003			Jul. 31, 2003			Oct. 31, 2003			Jan. 31, 2004
Consolidated statement of operations data:
Revenues	$	2,156		$	2,385		$	3,117		$	4,526		$	5,305		$	6,015		$	6,747		$	7,979
Cost of revenues		814			836			857			1,054			1,152			1,243			1,394			1,759
Gross profit		1,342			1,549			2,260			3,472			4,153			4,772			5,353			6,220
Operating expenses:
Product development		1,420			1,499			1,685			1,789			1,754			1,714			1,841			2,123
Sales and marketing		1,169			968			1,084			1,071			1,350			1,633			2,136			2,885
General and administrative		1,090			707			612			623			736			763			942			1,109
Stock-based compensation		62			50			27			10			8			53			148			263
Total operating expenses		3,741			3,224			3,408			3,493			3,848			4,163			5,067			6,380
Operating income (loss)		(2,399	)		(1,675	)		(1,148	)		(21	)		305			609			286			(160	)
Other income:
Other income (expense)		(1	)		12			—			(6	)		—			—			39			(3	)
Interest income		95			86			92			79			69			62			55			57
Interest expense		(23	)		(23	)		(22	)		(20	)		(17	)		(15	)		(3	)		(3	)
Income (loss) before provision for income taxes		(2,328	)		(1,600	)		(1,078	)		32			357			656			377			(109	)
Provision for income taxes		—			—			—			—			(15	)		(47	)		(35	)		(15	)
Net income (loss)	$	(2,328	)	$	(1,600	)	$	(1,078	)	$	32		$	342		$	609		$	342		$	(124	)

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The following table presents our quarterly historical results for the periods indicated as a percentage of revenues:

Three months ended (unaudited)	Apr. 30, 2002		Jul. 31, 2002		Oct. 31, 2002		Jan. 31, 2003		Apr. 30, 2003		Jul. 31, 2003		Oct. 31, 2003		Jan. 31, 2004
Consolidated statement of operations data:
Revenues	100	%	100	%	100	%	100	%	100	%	100	%	100	%	100	%
Cost of revenues	38		35		27		23		22		21		21		22
Gross profit	62		65		73		77		78		79		79		78
Operating expenses:
Product development	66		63		54		40		34		28		27		27
Sales and marketing	54		41		35		24		25		27		32		36
General and administrative	50		30		20		14		14		13		14		15
Stock-based compensation	3		2		1		—		—		1		2		3
Total operating expenses	173		136		110		78		73		69		75		81
Operating income (loss)	(111	)	(71	)	(37	)	(1	)	5		10		4		(3	)
Other income:
Other income (expense)	—		1		—		—		—		—		1		—
Interest income	4		4		3		2		1		1		1		1
Interest expense	(1	)	(1	)	(1	)	—		—		—		—		—
Income (loss) before provision for income taxes	(108	)	(67	)	(35	)	1		6		11		6		(2	)
Provision for income taxes	—		—		—		—		—		(1	)	(1	)	—
Net income (loss)	(108	)%	(67	)%	(35	)%	1	%	6	%	10	%	5	%	(2	)%

Revenues increased sequentially in each of the quarters presented due to increases in the number of customers, driven by an increased use of indirect sales channels and an international expansion. The 45% increase in revenues for the quarter ended January 31, 2003 over the preceding quarter reflects the addition of a major customer.

Gross profit in absolute dollars also increased sequentially for the quarters presented due primarily to revenue growth. As a percentage of revenues, gross margins have been between 78% and 79% for the four most recent quarters. The 26% increase of cost of revenues for the quarter ended January 31, 2004 over the preceding quarter was primarily due to investments made to improve the scalability and reliability of our anti-spam rule delivery service.

Operating expenses have increased over the four most recent quarters as we have continued to invest in product development to both enhance our existing products and services and to develop new messaging security products and services. We have also continued to invest in our sales and marketing efforts over the most recent four quarters and have expanded our sales force both domestically and internationally. We also increased investment in marketing efforts targeted at adding new customers and increasing penetration within our existing customer base. An increase in amortization of deferred stock-based compensation in the quarter ended January 31, 2004 resulted in a net loss for that period.

Liquidity and capital resources

At January 31, 2004, our principal sources of liquidity were cash, cash equivalents and short-term investments totaling $26.8 million and accounts receivable of $8.9 million.

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Sources of cash

From our inception in May 1998 through the quarter ended July 31, 2002, we funded our operations primarily through issuances of convertible preferred stock, which provided aggregate net proceeds of $53.2 million. Since the quarter ended July 31, 2002, we have funded our operations with cash flow generated by operating activities.

Operating activities. Net cash provided by operating activities was $6.8 million during fiscal 2004, compared to $0.5 million of cash used during fiscal 2003 and $6.6 million used during fiscal 2002. Sources of cash from operating activities in fiscal 2004 were primarily net income of $1.2 million and deferred revenue of $7.8 million, partially offset by $4.3 million in accounts receivable, which represents amounts recorded as deferred revenue and revenue that have been invoiced but not yet collected. Cash used in operating activities in prior years resulted from our historical operating losses, partially offset by changes in working capital accounts and add-backs of non-cash expense items, such as depreciation and amortization and the expense associated with stock-based awards.

Investing activities. Net cash used in investing activities was $4.3 million during fiscal 2004, compared to $11.9 million used during fiscal 2003, and $11.5 million provided during fiscal 2002. The net cash used and provided by investing activities primarily reflects offsetting inflows and outflows related to the investment of excess cash in high-quality, investment grade fixed income securities and the redemption of those investments. In addition, in fiscal 2004, 2003 and 2002, we used $1.8 million, $660,000 and $280,000 for capital expenditures associated with computer equipment used to support the expansion of our infrastructure and work force.

Financing activities. Net cash used in financing activities was $0.4 million during fiscal 2004, which primarily consisted of principal payments on capital lease obligations and bank debt, offset by proceeds from employee stock option exercises and the release of restricted cash from a letter of credit with our principal office landlord. Net cash provided by financing activities was $14,000 in fiscal 2003, and included the principal payments on capital lease obligations and bank debt, offset by proceeds from stock option exercises, borrowings under a bank loan and the release of restricted cash from a letter of credit in favor of our principal office landlord. Net cash used in financing activities was $0.3 million in fiscal 2002, consisting of the establishment of a letter of credit in favor of our principal office landlord and principal repayments of capital lease obligations and bank debt, partially offset by additional borrowings under capital lease obligations and bank debt, and proceeds from employee stock option exercises.

During fiscal 2002, we established a $480,000 letter of credit in favor of our principal office landlord. This letter of credit was collateralized by a certificate of deposit maintained at the granting financial institution for the same amount and is reflected as restricted cash on our consolidated balance sheet. As of January 31, 2004, $120,000 of the letter of credit was outstanding, and no amounts had been drawn against it. The letter of credit renews annually through January 1, 2005, and the balance declines by $120,000 each year on January 1 in accordance with the lease.

Contractual obligations and off-balance sheet arrangements

We do not have any special purpose entities, and other than operating leases for office space, we do not engage in off-balance sheet financing arrangements. Additionally, we currently do not have a bank line of credit.

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We generally do not enter into binding purchase commitments. Our principal commitments consist of obligations under leases for office space and office equipment. At January 31, 2004, the future minimum lease payments, net of minimum sublease obligations of $182,000 for 2005, under these commitments were as follows:

	Payments due by period
Contractual obligations (in thousands)	Total		Less than 1 year			1-3 years		3-5 years		More than 5 years
Operating lease obligations	$	949	$	909	(1)	$	40	$	—	$	—

(1) The lease for our headquarters at 301 Howard Street, San Francisco, California expires in December 2004. We intend to extend this lease. However, if we are unsuccessful in negotiating such extension on suitable terms, we will find an alternative property for our headquarters.

Cash requirements and other uses of cash

We are currently cash flow positive and fund our business with cash from operations. We expect additional operational expenditures in customer support and our production infrastructure to support anticipated expansion of our customer base in both the next 12 months and beyond. Additionally, we intend to increase sales and marketing activities and product development in order to support expansion into new markets and territories in both the next 12 months and beyond. We also expect to incur additional capital investment in our production environment, including the development of our new data center in Sacramento, which will happen in the next 12 months. We expect that cash provided by operations combined with cash on hand will be sufficient to fund our capital and operating requirements over both the next twelve months and beyond.

Quantitative and qualitative disclosures about market risk

Foreign currency exchange risk

To date, substantially all of our international sales have been denominated in U.S. dollars, although we anticipate an increasing proportion of those sales will be denominated in foreign currencies. Accordingly, our results of operations and cash flows may become subject to fluctuations in foreign currency exchange rates, particularly changes in the Euro, Australian dollar and British pound. We have a risk management policy that allows us to utilize foreign currency forward and option contracts to manage our currency exposures as part of our ongoing business operations. To date, we have not entered into any hedging contracts since exchange rate fluctuations have had little impact on our operating results and cash flows. As we expand our international sales, however, we may decide to enter into hedging contracts. If we were to enter into hedging contracts, the contracts by policy would have maturities of less than three months and settle before the end of each quarterly period. Additionally, by policy we would not enter into any hedging contracts for trading or speculative purposes.

Interest rate sensitivity

We had cash, cash equivalents and short-term investments totaling $26.8 million at January 31, 2004. These amounts were invested primarily in money market funds and high quality investment grade, variable-rate municipal bonds and are held for working capital purposes. We do not enter into investments for trading or speculative purposes. Due to the short-term nature of these investments, we believe that we do not have any material exposure to changes in the fair value of our investment portfolio as a result of changes in interest rates.

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Business

Overview

Brightmail is a leading provider of electronic messaging security software and services to enterprises and messaging service providers worldwide, currently protecting approximately 25% of all mailboxes globally. Our proprietary software platform provides flexible, scalable and dynamic anti-spam, anti-virus and related messaging security solutions to protect our customers’ email and electronic messaging infrastructure by effectively identifying and disposing of unwanted or malicious messages while accurately allowing delivery of legitimate messages. Our software installs easily and quickly and provides administration, customization and policy management capabilities. As a result, we provide our customers with a secure and improved messaging environment, allowing them to realize workforce productivity gains and more efficiently utilize their technology infrastructure.

We market our products and services through the combination of our indirect sales channels, including distributors, resellers, business outsourcing and hosted service providers, large global systems integrators, original equipment manufacturers and appliance vendors, as well as through the efforts of our direct sales organization. We provide our subscribers with software updates approximately every ten minutes drawing upon our proprietary Probe Network, which monitors evolving messaging threats in real-time. Our software, which is available solely on a subscription basis, can support numerous hardware configurations, operating systems and messaging applications and infrastructure, and is delivered as stand-alone software or, by our distribution partners, integrated into their appliance solutions, or as a hosted service. From 1999, when we first introduced our products and services, through April 2004 our customer base has grown to over 2,000 customers, with an aggregate of approximately 300 million end-user mailboxes under subscription.

Industry background

Emergence of electronic messaging as a mission critical business application

With the global adoption of the Internet, the use of electronic messaging has become a ubiquitous communication tool and a mission critical application for the conduct of business. According to estimates by International Data Corporation, or IDC, by 2007 the number of worldwide email boxes will be 1.6 billion, and the number of person-to-person email messages sent worldwide will be more than 9.1 trillion. Surveys by market research firm META Group estimate that 80% of business people believe email is more valuable than the telephone for business communication. In addition to email, a wide variety of other forms of electronic messaging have emerged and are increasingly embraced by businesses, including instant messaging, or real-time messaging through the Internet, and Short Messaging Service (SMS), or short text messaging through mobile phones, two-way pagers, personal digital assistants and other mobile devices.

Increasing threats to electronic messaging

The widespread adoption of electronic messaging has made securing and managing the messaging infrastructure increasingly important, complex and costly. The messaging standards originally adopted by the public Internet were not optimized to address concerns for security, privacy and fraud. As a result, the existing infrastructure is susceptible to security attacks, which

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compromise and threaten the utility of electronic messaging. Frequently encountered messaging security threats include:

•  spam, or unsolicited or unwanted bulk email, generally sent by individuals or organizations that send mass emails to a specified list of email addresses;

•  viruses, or malicious code designed to disrupt computer systems or steal confidential information; and

•  fraudulent email, or email that mimics legitimate corporate communications for the purpose of stealing personal or financial information.

Proliferation of spam as a barrier to the effectiveness of email

We believe the proliferation of spam is one of the most severe and challenging electronic messaging security threats faced by businesses today. Spammers rapidly evolve techniques to circumvent efforts aimed at stopping them. The proliferation of spam is driven largely by its potential to generate attractive profits for spammers. Email allows a spammer to reach individuals and businesses for a fraction of the cost of using any other communication vehicle because the spam market has almost no barriers to entry and the marginal cost of sending additional emails is almost zero. In addition, hackers and spammers increasingly use spam to introduce viruses into business networks and steal confidential information from businesses. According to IDC, in 2003 spammers sent an average of 13.5 billion emails per day, and spam as a percentage of overall Internet email traffic will grow from 35% in 2002 to 67% in 2007. Based on our own filtering operations, we estimate that spam, as a percentage of overall Internet email traffic, was 63% in March 2004.

Spam is a dynamic problem. Techniques frequently used by spammers include deliberately obscuring the identity of the email sender, implementing false “unsubscribe” mechanisms to validate an email address and harvesting email addresses published on the Internet. Spammers target virtually anyone with a valid email address, across any geography or industry. Moreover, spam campaigns often involve large volumes of emails sent repeatedly, which tax network and server bandwidth and allow the perpetrators to rapidly evolve the form and content of the message traffic to evade new spam filtering techniques. As a result, successfully addressing the spam problem requires a dynamic approach to spam identification and analysis, as well as real-time generation, updating and deployment of filters in the network, particularly at the gateway or the mail server, where message traffic can be filtered in the aggregate.

Many jurisdictions in the United States and abroad have enacted legislation attempting to solve the spam problem. While legislation has been an important driver toward raising public awareness of spam and may act as a deterrent, legislation alone will not solve the spam problem. Governments have difficulty prosecuting across jurisdictions and have typically placed enforcing spam laws at a lower priority. In addition, the international portability of spam operations and the ability of spammers to remain anonymous has meant that an effective technology solution in addition to legislation is necessary to address the spam problem.

Spam causes significant challenges for businesses

The proliferation of spam and the need to block it has created a number of significant challenges for businesses, including:

•  Lost productivity. The productivity loss caused by the time employees spend separating legitimate email from spam or responding to spam is growing increasingly significant.

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•  False positives. The cost of false positives, or the inappropriate blocking of legitimate messages by spam filtering systems, may result in loss of sales or critical information.

•  Strain on IT resources. Spam taxes the technology infrastructure by utilizing network, server and storage resources, potentially requiring organizations to purchase additional systems and devote more personnel to manage them.

•  Damage to corporate brands. Techniques have emerged, such as “phishing,” where spammers create messages designed to resemble a message from a legitimate business, which not only places the recipient at risk, but also damages the trust in the business’ corporate brand.

•  Increased risk of workplace liabilities. Spam often contains or directs users to offensive content, which may create an uncomfortable or hostile work environment and result in greater liability risks for businesses.

•  Increased customer churn for messaging service providers. If email accounts become flooded with spam, customers may become dissatisfied with the messaging service provider, thereby increasing customer support costs and risk of service termination.

These challenges result in significant costs for businesses. According to Ferris Research, a consulting firm, the aggregate cost due to these spam threats for American corporations exceeded $10 billion in 2003. These costs do not take into account spam techniques used as a delivery mechanism for other threats, such as viruses and fraud.

Businesses require an effective and accurate messaging security solution

The proliferation of spam, compounded by the severity of email related security threats, presents a formidable challenge for businesses as they look to maintain a secure environment, contain costs and realize the benefits of a messaging platform. As a result, businesses require a messaging security solution that can address these challenges. An effective solution must:

•  identify and prevent spam, viruses and fraudulent email from entering the core network;

•  minimize false positives;

•  limit the management and administrative cost required to maintain control over the rapidly evolving spam tactics and messaging threats;

•  support the wide variety of hardware, software and messaging applications and protocols typical of the technology infrastructure; and

•  process hundreds of millions of emails each day across multiple locations, without delaying message delivery.

Given the growth of complex messaging threats, we believe that businesses of all sizes require a dynamic messaging security solution to ensure a safe, secure and stable messaging system. Combating spam and related messaging threats has required increasing financial investment in security technology. IDC estimates that the messaging security software market will grow from $364 million in 2003 to $1.1 billion in 2007, representing a compound annual growth rate of 31%. Today, the market for enterprise anti-spam solutions remains largely unpenetrated. According to Ferris Research, approximately 10% of corporate mailboxes have some level of anti-spam protection.

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The Brightmail solution

We are a leading provider of electronic messaging security software and services to enterprises and messaging service providers worldwide, currently protecting approximately 25% of all mailboxes globally based upon IDC’s estimates of currently active global mailboxes as of January 2004. Our flagship software platform, Brightmail Anti-Spam, provides businesses with a flexible, scalable and dynamic anti-spam solution that affords industry-leading filtering effectiveness and accuracy. Our software installs easily and quickly and provides administration, customization and policy management capabilities. In addition to our core anti-spam functionality, our solution provides our customers with an extensible platform and complementary application modules for reducing risks associated with their electronic messaging infrastructure. For example, we also offer a tightly integrated anti-virus product that provides protection against email-borne viruses and worms. We sell our solution on a subscription basis and provide our customers with updates approximately every ten minutes by drawing upon our proprietary Probe Network to monitor evolving spam attacks in real-time. Our software can support numerous hardware configurations, operating systems, messaging applications and infrastructure, and is delivered as stand-alone software or, by our distribution partners, integrated into their appliance solutions or as a hosted service.

The key advantages of our products and services include:

•  High effectiveness. Our messaging security technologies employ multiple proprietary techniques to identify and block spam. We continuously update our filtering system based on real-time data from our Probe Network, which collects data from over a million decoy email addresses and enables us to quickly and dynamically identify, analyze and provide filter updates as spam attacks occur.

•  High accuracy (low false positives). According to the Yankee Group, a consulting firm, Brightmail Anti-Spam delivers an industry leading accuracy rate of 99.9999%, with one false positive in every one million messages identified as spam. We maintain extensive quality assurance processes through our operation centers, and we test all filter, rule and definition updates against a large test database of messages to safeguard against inadvertent filtering of legitimate messages. We also collect and analyze sample messages submitted by our customers that they believe were identified incorrectly and use this intelligence for the benefit of all customers. Because of our low false positive rate, some customers elect to have our software automatically delete potentially unwanted or malicious messages, rather than quarantining these messages for subsequent review. This provides significant cost savings in bandwidth, network and storage infrastructure investment, as well as personnel costs.

•  Low total cost of ownership. Our software can typically be deployed within hours for a small enterprise and days for a large enterprise customer and consequently requires minimal consulting or in-house resources to install and implement. Once implemented, our automated processes analyze the latest threat trends, generating updates to filters, rules and definitions, which are provided in real-time to our customers.

•  Cross-platform flexibility. Our software can support numerous operating systems, messaging applications and messaging protocols. For example, our software integrates with operating systems such as Microsoft Windows, Solaris, Linux and FreeBSD; messaging systems such as Microsoft Windows SMTP Service, Sendmail, Openwave Email MX, Critical Path Messaging Server, Sun Java System Messaging Server and IBM Lotus Notes Domino Server; and messaging protocols such as SMTP and various wireless messaging protocols. We also deliver our solution as stand-alone software or integrated as an appliance or hosted service through our distribution channels.

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•  High performance and scalability. Brightmail Anti-Spam is scalable to a virtually unlimited number of mailboxes and is currently deployed at enterprises and messaging service providers with mailboxes ranging from less than 50 to well over 100 million. Our solution is built to efficiently meet the high volume messaging demands of large messaging service providers as well as the requirements of small businesses. Furthermore, it has only a minimal impact on the transmission time of messages, regardless of total volume.

•  Customizable filtering and administration. Our software allows subscribers to customize the treatment of unwanted or malicious messages such as the option to selectively delete, quarantine or cleanse a message. Rules and policies can be written or modified by the IT administrator through our centralized management console to customize the software for individual workgroups, departments or divisions. Also, because each individual may have a different definition of what constitutes spam, we offer the ability to customize end-user preferences at the desktop level.

Our strategy

Our objective is to become the leading provider of messaging security products and services to businesses worldwide. The key elements of our strategy to achieve this objective include:

•  Extend product and technology leadership. We will continue to invest in product development to expand and improve our products, services and technology in order to build a more complete messaging security platform that provides value-added messaging security capabilities to our customers. We intend to enhance our solution offerings through internal development, third party solution providers and, potentially, strategic acquisitions. We also will continue to focus on enhancing the functionality of our core technologies in existing products and operations.

•  Expand geographic coverage. We plan to broaden our existing customer base in both Asia Pacific and Europe, Middle East and Africa. These markets are experiencing similar spam growth trends to those in the United States but to date have a lower rate of adoption of messaging security solutions. We intend to follow our North American strategy of pursuing the large messaging service providers and Global 2000 accounts directly and through our distribution channels.

•  Extend leveraged sales channel. We intend to expand our sales coverage through agreements with our indirect channel of distributors, resellers, business outsourcing and hosted service providers, large global systems integrators, OEMs and appliance vendors. In addition, we have focused more of our direct sales professionals on Global 2000 businesses to increase large marquee account penetration.

•  Leverage installed base of existing customers. We seek to leverage our large and diverse customer base by cross-selling additional products, such as our Anti-Virus and Anti-Fraud services. We believe there is a significant opportunity to market these and other services to our existing customer base.

•  Encourage the development of third-party applications for our software platform. Our software platform enables third-party software developers to write application modules, which will complement our core solution. We provide a Software Development Kit, or SDK, to enable the integration of third-party products and services and to foster the development of new applications.

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Products, services and support

We provide the Brightmail server platform, which comprises a suite of software products and services that help our customers protect their systems from spam, viruses, fraudulent messages, as well as other security threats while allowing legitimate email to be reliably and securely delivered. We provide our products and services in both enterprise and messaging service provider versions, which we sell exclusively on a subscription basis. We provide an administration and management console that enables customers to modify the policies and preferences of our software at the departmental or end-user level. In addition, we provide our SDK and open application programming interfaces and are working with third-party software vendors to facilitate their introduction of messaging infrastructure applications that will be complementary to and integrate with our Brightmail server platform.

The following diagram depicts the Brightmail server platform:

Brightmail Anti-Spam

Brightmail Anti-Spam, which we launched in 1999, is our flagship product and is typically deployed at the Internet gateway, where email enters a customer’s core network. Combining several proprietary techniques, Brightmail Anti-Spam helps customers effectively and accurately identify and filter unsolicited or unwanted electronic messages, and ensures that legitimate messages are reliably delivered while maintaining a low on-going administration cost.

According to a comparative product analysis conducted for us by Veritest, an independent testing company, Brightmail Anti-Spam delivers an effectiveness rate typically higher than 95%, and according to the Yankee Group, Brightmail Anti-Spam has an industry leading accuracy rate of 99.9999%, with one false positive in every one million messages identified as spam. Our core anti-spam engine uses multiple proprietary technologies, a globally-deployed detection network and a dynamic rule delivery mechanism in order to achieve accuracy and effectiveness. Brightmail Anti-Spam incorporates a multi-faceted approach to spam detection, providing a balanced mix of the following types of filters:

•  Source filters: identify and block spam based on the source of the originating sender;

•  Content filters: identify and block spam based on the content of the message; and

•  Call-to-action filters: identify and block spam based on the inclusion of information in spam that directs or requests recipients to perform specific actions, such as visiting targeted website addresses or calling particular telephone numbers.

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Brightmail Anti-Spam is easy to install and dynamically updated and does not require any tuning or training of filters by administrators. Filter updates that provide protection from new spam attacks are made available approximately every ten minutes automatically, securely, reliably and timely, 24 hours a day, 365 days a year. In addition, Brightmail Anti-Spam provides IT managers with a powerful set of management and reporting features such as flexible spam disposition, tolerance level settings and centralized and per-user web quarantine options. IT managers can add custom filters and enforce email policies using a graphical interface.

Brightmail Anti-Spam runs on Microsoft Windows, Linux, Solaris and FreeBSD operating systems and integrates with most leading enterprise messaging systems, including Windows SMTP service, Microsoft Exchange Server, IBM/Lotus Notes, Sendmail, Openwave Email MX, Critical Path Messaging Server and Sun Java System Messaging Server.

Brightmail Anti-Virus

Brightmail Anti-Virus, which we launched in 2000, is a module that customers may license in conjunction with Brightmail Anti-Spam. This anti-virus module, which incorporates certain anti-virus technology from Symantec Corporation, scans message attachments for viruses and worms and delivers anti-virus signature updates to customers automatically and securely together with anti-spam filters generated by Brightmail Anti-Spam. “Worm auto-delete” is a key feature that removes messages associated with worms. The speed at which recent worms, such as MimeMail or MyDoom, have spread has been increasing, potentially leaving end-users’ systems unprotected even if they regularly download client anti-virus updates. Our anti-virus software module is a fast, reliable and high-performance solution for detecting and eliminating email-borne viruses at the gateway before they invade our customers’ core networks.

Brightmail Anti-Virus relies upon certain of Symantec’s anti-virus technology. Our agreement with Symantec relating to this anti-virus technology expires in July 2005. Symantec also has the right to terminate this agreement upon the occurrence of certain events, including if we are subject to a change in control transaction or if we enter into any agreement that disrupts Symantec’s anti-virus small business revenues.

Brightmail Reputation Service

The Brightmail Reputation Service, which we launched in 2004, provides businesses with an additional level of security against messaging security threats. Using data from our Probe Network, the Brightmail Reputation Service evaluates message sources globally to determine the degree to which they are being used to send spam. This service tracks message and spam flow in real-time from hundreds of thousands of email sources and automatically creates profiles for each email source, including the history, quality and quantity of the email sent. By receiving profiles of the email sources, our customers can customize their email policies by blocking or allowing email based on the profile of the source itself. This service is currently offered to our customers in conjunction with Brightmail Anti-Spam.

Brightmail Anti-Fraud

Brightmail Anti-Fraud, which we launched in 2003, is designed to protect established businesses from “phishing” attacks, or fraudulent emails sent to the businesses’ clients that mimic their logo

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and domain name for the purposes of stealing financial or personal information of their clients and prospective clients. By mimicking the businesses’ legitimate messages, the sender tries to deceive the recipient to disclose personal or financial information. Brightmail Anti-Fraud acts as an early detection system for the abuse and mimicking of our customers’ brands and domains by utilizing the information collected by our Probe Network to proactively monitor whether an anti-fraud customer’s brand is being fraudulently used in messages.

Customer service and support

We believe that superior customer support is critical to retaining and expanding our customer base. We offer a number of services to customers through our services and support organization. Our key customer service offerings include:

•  Standard support services. Included as part of our subscription fee, we provide our customers standard support and maintenance services. These services include access to customer service professionals, technical support, software upgrades and updates and delivery of filtering rules and rule updates. Our support program assists our customers in the use of our products and services and identifies, analyzes and solves problems or issues with our services. Customer support services are available to customers by telephone, email or over the Internet during business hours. We also offer an online repository of helpful information about our products and services, as well as shared best practices for product use and upgrade implementation.

•  Premium support services. We provide our customers with a variety of specialized support and maintenance programs including dedicated support account managers, 24 hours a day, 365 days a year.

Technology and architecture

We have developed a proprietary process and platform to deliver messaging security. The technology incorporated in our products and services is designed to provide our customers with reliability, quality of service, security and scalability. Key elements include our proprietary Probe Network, the Brightmail Logistics and Operation Centers, or BLOCs, advanced filtering technology, flexible technology architecture and advanced management tools.

The following diagram depicts our proprietary architecture:

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1. Our Probe Network is comprised of a distributed system of over a million decoy electronic addresses. This network of decoy addresses enables us to collect millions of unsolicited messages every day and is designed to provide us with real-time visibility into the latest messaging threats impacting our customers.

2. Our BLOCs process messages received from our Probe Network and messages submitted by our customers that they believe should have been filtered or were filtered incorrectly, as well as anti-virus signature updates from Symantec. The combination of our automated technology and the ability of our BLOC specialists to analyze trends in messaging threats allows our BLOCs to generate and validate filters, rules and definition updates to block spam and related threats.

3. The filters, rules and definition updates are automatically deployed over a secure connection to customers who subscribe to the Brightmail solution. IT administrators are not involved in the update process, thereby reducing the burden and cost of maintaining the system.

4. Updates are generally available to our customers every ten minutes and, once installed, effectively and accurately protect our customers’ messaging infrastructure from new messaging attacks.

Brightmail Probe Network and end-user submissions

We have designed our proprietary Probe Network, comprised of over a million decoy electronic addresses (email and SMS in particular), to capture a large volume of unsolicited or unwanted messages that provide us with significant visibility into the latest messaging threats in real-time. In addition to inactive addresses obtained from our customers, we use a suite of proprietary tools and processes to automate the strategic placement of decoy addresses across the Internet, monitor unsubscribe features, track addresses targeted by spammers and evaluate emerging technologies employed by hackers, virus writers and identity theft criminals. We also collect sample messages submitted by our customers that they believe should have been filtered and those that were filtered incorrectly such that we can add this intelligence to our engine for the benefit of all customers. Data collected by our Probe Network also supports our Brightmail Reputation and Anti-Fraud Services. We believe that the scale and scope of our Probe Network, together with our proprietary tools and processes, create a competitive advantage for our business and makes the replication of our Probe Network by third parties difficult.

BLOCs—Brightmail Logistics and Operation Centers

Our Brightmail Logistics and Operation Centers employ a suite of tools for analyzing the data collected by our Probe Network and sample messages submitted by our customers for purposes of generating testing and reporting filtering rules. We developed sophisticated grouping algorithms designed to aggregate similar messages to pinpoint a spam attack. Once the characteristics of a spam attack have been identified, we design and update rules to filter them. We also deploy various translation and other technologies intended to remove randomization, such as inserting random text in a message, and obfuscation, such as inserting text in the same color as the background color—techniques used by spammers to circumvent anti-spam filters. We plan to continue to develop or enhance our technology in the following areas:

•  increase automation of rules generation to improve the scalability of our operations as the volume of spam attacks increase;

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•  improve our ability to monitor and prioritize messaging threats; and

•  improve quality control methods and processes to maintain or increase the effectiveness and accuracy of our filtering rules.

Advanced filtering technology

We make available new filters and filter updates to our customers approximately every ten minutes to respond to new and evolving electronic messaging threats in real-time. We have focused substantial development resources on enhancing our software with core anti-spam filtering technologies including:

•  proprietary web address, or URL, filter technology that identifies and filters messages based on the presence of addresses linked to spammers’ websites embedded in messages;

•  proprietary spam signatures technology, BrightSig, which removes the random HTML code included in spam messages to evade spam-filtering software. This technology allows us to group seemingly random spam messages into a common attack that can be filtered efficiently;

•  a dynamic database of IP addresses of open proxy servers that identifies and blocks messages that are sent from these sources;

•  an intelligent engine that filters messages written in foreign languages and based on user profile and personal options; and

•  heuristic technology that assigns a score and weight to each spam characteristic in a message. Leveraging the vast amount of data we collect from our Probe Network, we update our heuristic technology and fine tune each spam characteristic’s score and weight continuously. If a message exceeds a specified score, it is considered spam.

Currently, our software is capable of filtering up to 20 email messages per second, or a total of over 1.7 million messages per day, for each processor on which our software is installed. We monitor the filtering activities of our installed base remotely through our BLOCs, and continually adjust the deployed filter sets to maintain these performance levels and thereby minimize latency in message delivery. This monitoring activity also provides additional information on trends in email and messaging security threats that augments the data collected through our Probe Network.

Flexible architecture

We designed our software and services to provide our customers with a high performance and flexible architecture. Key elements of our architecture are:

•  Cross-platform support. Our architecture works with industry-leading platforms to reduce the need for customization and implementation time. Our products and services work across multiple mail servers, such as Microsoft Exchange, IBM Lotus Domino and Sendmail and integrate with many existing, well-known messaging systems.

•  Robust failover capability. Our software allows multiple clients to failover to multiple servers. If our software fails, our architecture permits our customer’s email messaging system to continue to deliver email.

•  Highly scalable solution. Leveraging best of breed messaging technologies, our products can scale to more than 100 million mailboxes per customer.

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Advanced management tools

We have designed our products and services to include advanced management tools that allow customers to customize their email security policies. We developed a custom rules editor to allow IT managers to use a graphical interface to write custom filters using several types of filtering techniques, such as keyword-based filters, sender-based filters and source-based filters using IP addresses or third-party black lists or custom white lists to bypass filtering rules. We also provide client plug-ins for industry leading email clients, which allow users to create personal safe lists automatically populated from sent items and contact lists, as well as personal block lists.

Development and operations

Development

Our product development efforts are focused on improving and enhancing our existing product and service offerings as well as developing new proprietary technology. To date, we have spent over $30.3 million on product development and have approximately 60 people currently working on product development. We incurred product development expenses of $7.4 million in fiscal 2004, $6.4 million in fiscal 2003 and $6.6 million in fiscal 2002. We have two primary product development teams. Our anti-spam technology group, which is part of our engineering team, focuses on possible ways spammers might circumvent filters designed to block their messages and on developing technology that could minimize the amount of false positives generated by our product. Our BLOC engineering team is focused on enhancing the tools used by our operation centers to increase the effectiveness and scalability of our operations, including improved methods of automation to help us analyze and evaluate spam attacks and generate new filtering rules more quickly and effectively.

Monitoring and filtering operations

Our operations to support the monitoring of spam threats and delivery of filter updates involve both in-house and outsourced capabilities. Our BLOCs are operated by us and are based in San Francisco, California; Dublin, Ireland; Taipei, Taiwan; and Sydney, Australia. These centers, which have centralized performance consoles, automated load distribution and various self-diagnostic tools and programs, provide the backbone for monitoring our Probe Network on a 24 hour a day, 365 days a year basis.

To deliver filter updates to customers and provide data storage, we rely on a third-party data center facility located in San Francisco. This facility is designed to withstand an earthquake of magnitude up to 7.9 on the Richter scale and has extensive security measures, including around-the-clock security and escort-controlled access. This facility is supported by on-site backup generators in the event of a power failure. We regularly backup our production tools and database, as well as our development environment to ensure smooth transition in case disaster recovery becomes necessary. In addition, we have implemented redundant filter update delivery systems in our San Francisco headquarters and are in the process of implementing such systems in a third-party data center facility located in Sacramento, California for use in the event that our current third-party data center facilities in San Francisco become unavailable.

Sales and marketing

We market and sell subscriptions to our products and services indirectly through our resellers, distributors and business outsourcing providers and large global systems integrators, as well as through the efforts of our direct sales organization. Currently, a majority of our product sales is

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made through resellers, systems integrators, OEMs and other partners. Our sales organization is divided into regional account teams, which include regional vice presidents, sales directors, channel managers, inside sales representatives and sales engineers. We maintain a sales office in San Francisco and, outside the United States, in Australia, Taiwan, the United Kingdom, Ireland, The Netherlands and Germany. As of January 31, 2004, our sales organization was comprised of 31 individuals in North America, four individuals in Asia Pacific and four individuals in Europe. We intend to increase the size of our sales organization and establish additional sales offices.

Channel and partner sales

Our channel partners primarily include resellers, distributors, hosted service providers and large global systems integrators. A channel partner typically signs a one or two-year agreement to become a nonexclusive distributor or reseller. Channel partners are responsible for most aspects of the relationship with the customer, including billing, implementation and promotional activities. Some of our channel partners also sell or implement related messaging security products and bundle our products and services with their core offerings. We have also established indirect sales channels with messaging security appliance vendors. These vendors typically sign a one or two-year agreement to market and resell our products and services together with their messaging security appliance solutions. As with channel partners, these vendors are responsible for maintaining the customer relationship. Under some agreements, we are the exclusive third-party commercial anti-spam technology provider for the appliance vendors, subject to some exceptions.

Direct sales

We have multi-disciplinary sales teams that consist of sales as well as technical and support professionals. Our senior and regional sales management take an active role in our sales efforts as needed. Our technical and support sales professionals work with our customers to ensure successful implementation of our products and services. As our direct sales efforts focus primarily on business-wide deployments, our sales efforts are typically directed to senior executives at our potential customers’ businesses, including the chief information officer, vice presidents and directors of the information technology departments.

International sales

For the fiscal year ended January 31, 2004, we generated approximately 14% of our total revenues through direct and indirect sales from customers outside of the United States. We expect international markets to provide increased opportunities for our products and services in the future. Our current international efforts are focused on strengthening our direct sales and marketing presence in Asia Pacific and in Europe, Middle East and Africa and generating more revenues from these regions.

Marketing

We focus our marketing efforts on creating awareness for our products and services, educating potential customers, generating new qualified sales opportunities, and raising the awareness of Brightmail as a leading provider of messaging security solutions. Our marketing programs include a variety of events including public relations activities, telemarketing, direct marketing, seminars

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and trade shows targeted at key executives and decision-makers within our target markets. We also maintain an active public relations program and actively participate in discussions with governmental authorities, agencies and the press to contribute our expertise and provide insights with respect to messaging security solutions.

Customers

From 1999, when we first introduced our products and services, through April 2004, our customer base has grown to over 2,000 customers, with approximately 300 million end-user mailboxes under subscription.

We sell our products to many enterprises, including Fortune 500 companies with up to 350,000 mailboxes per enterprise, as well as smaller enterprises with fewer than 50 mailboxes. These enterprise customers encompass a variety of different industries, including computer hardware and components, computer software, consumer products, telecommunications, financial services, industrial products and services. The following is a representative list of our enterprise customers across a variety of different industries:

Computer Software and Hardware Manufacturers	Retail, Distribution and Manufacturing
Apple Computer, Inc. Logitech Inc. Microsoft Corporation Motorola Incorporated Oracle Corporation Parametric Technology Corp. Sun Microsystems, Inc. Texas Instruments Incorporated	Abbott Laboratories General Mills, Inc. Heidelberger Druckmaschinen AG Ingram Micro Inc. Kimberly Clark Corporation Office Depot, Inc. Pelco
Services	Other
AAA Auto Club South Clifford Chance LLP Electronic Data Systems Corporation FedEx Corporation Lifespan Maximus, Inc.	Army Corps of Engineers Bechtel Corporation John Hancock Life Insurance Company LandAmerica Financial Group, Inc. Universal Music Group Inc. UOP LLC

Our customers also currently include eight of the top twelve Internet service providers in the United States who use our software to provide spam and virus protection to their users. Our customers also include hosted service providers, which provide IT infrastructuring software and services to businesses.

For the fiscal year ended January 31, 2004, sales to Microsoft Corporation represented approximately 18% of our revenues. Our primary agreement with Microsoft expires in December 2005. Either party may terminate the agreement effective on December 31, 2004 or June 30, 2005, by providing not less than 30 days written notice to the other party. In addition, Microsoft has the right to terminate the agreement upon the occurrence of certain events, such as certain circumstances involving potential intellectual property infringement claims or if we are subject to a change in control transaction.

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Competition

We believe that we compete principally on the basis of solution effectiveness, accuracy, total cost of ownership and flexibility. Our current and potential principal competition includes:

•  pure-play messaging security vendors such as Postini Corporation and CipherTrust, Inc.;

•  IT security and anti-virus vendors such as Trend Micro Inc., Network Associates, Inc. and Symantec Corporation; and

•  in-house software developers.

In addition, we may face competition from large enterprise network infrastructure and software vendors such as Cisco Systems and Microsoft as they diversify their product offerings.

We believe that we have the lowest false positive rate in the industry, achieving a one-message-in-one million false positive rate by leveraging multiple technologies. We believe that our competitive strengths, in addition to our low false positive rate, include our high effective rate in blocking spam, low total cost of ownership, cross-platform flexibility and scalability to meet the needs of virtually all sizes of businesses.

Intellectual property

We believe that our continued success will depend primarily on our ability to develop and maintain the proprietary aspects of our technology and operate without infringing upon the proprietary rights of others, our technical expertise, speed of technology implementation and the creative skills and management abilities of our officers and employees. We primarily rely on a combination of patent, trademark, license, trade secret and copyright laws, nondisclosure agreements with our employees, consultants and suppliers and other contractual restrictions to establish, maintain and protect our proprietary rights. We hold three U.S. issued patents and one utility pending patent application and three provisional patent applications, including one issued patent relating to our proprietary Probe Network. We intend to actively pursue the filing of additional patent applications in both the U.S. and foreign jurisdictions. Our domestic patents and applications have expiration dates ranging from December 23, 2017 through December 31, 2018.

We claim copyright and trademark protection for proprietary documentation and a variety of branding marks. For example, Brightmail and Email You Can Trust are trademarks registered in a number of countries, including, among others, the United Kingdom, France, Italy, Germany, Australia, Mexico, Singapore, New Zealand and the U.S. We have also registered several Internet domain names that we use for electronic interaction with our customers, including dissemination of product information, marketing programs, product registration, sales activities and other commercial uses.

We also integrate third-party software into our products that is necessary for their operation and functionality. We obtain the rights to use such software through license agreements, and we also incorporate open source code software into our products. Our reliance on third-party software and open source code software entails certain risks, which are set forth in more detail in the

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section of this prospectus entitled “Risk factors.” In particular, we have entered into an agreement with Symantec that allows us to integrate certain of Symantec’s anti-virus technology with our anti-spam technology. This agreement has a three-year term expiring in July 2005. In addition, Symantec has the right to terminate this agreement upon the occurrence of certain events, including if we are subject to a change of control transaction or if we enter into any agreement that disrupts Symantec’s anti-virus small business revenue. We estimate that sales of our anti-virus module under this agreement represented approximately 20% of our total revenues for the fiscal year ended January 31, 2004.

Financial information about geographic areas

Financial information relating to our revenues generated in different geographic areas is set forth in Note 6 of the notes to our consolidated financial statements included in this prospectus. In addition, please see “Risk factors—International sales expose us to additional risks that have potential to adversely affect our business and operating results” for information about risks associated with our foreign operations.

Employees

As of January 31, 2004, we had a total of 127 full-time employees, of whom 63 were involved in product development, 47 in sales and marketing and customer support and 17 in finance and administration. None of our employees are represented by a labor union. We have not experienced any work stoppages and believe that our relationships with employees are good. Our future success will depend in part on our ability to attract, retain and motivate highly qualified technical and management personnel, for whom competition is intense.

Facilities

Our headquarters are located at 301 Howard Street, Suite 1800, San Francisco, California, which we occupy pursuant to a lease of 25,000 square feet of space under agreements expiring in December 2004. We intend to extend this lease prior to its expiration. However, if we are unsuccessful in negotiating such extension on suitable terms, we will find an alternative property for our headquarters. We also license the right to install, maintain and operate equipment at a third-party data center facility in San Francisco that we use to deliver filter updates to customers and provide data storage. In addition, we also license the right to install, maintain and operate equipment in Sacramento, California, which we plan to use as a back-up data center in the event that our data center facilities in San Francisco become unavailable. We sublease approximately 8,700 square feet of our facilities at our headquarters facilities to a subtenant due to expire in December 2004. We believe that we currently have or can obtain adequate facilities for the next 12 months and that, if required, suitable additional space will be available on commercially reasonable terms to accommodate expansion of our operations. In addition to our headquarters, we lease office space in The Netherlands, Australia, Taiwan, Germany, the United Kingdom and Ireland to support our field sales and operations staff.

Legal proceedings

Although we are not currently a party to any material litigation, we may occasionally become involved in litigation arising in the ordinary course of our business.

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Management

Executive officers and directors

The following table sets forth the names, ages and positions of our executive officers and directors as of the date hereof:

Name	Age	Position
Enrique Salem	38	Director, chief executive officer and president
Michael Irwin	35	Chief financial officer
Ken Schneider	42	Chief technical officer and vice president of operations
Michael D. Conner	48	Senior vice president of worldwide sales
Brad Kingsbury	40	Vice president of engineering
François A. Lavaste	38	Vice president of marketing
Bettina H. Koblick	38	Vice president of human resources
Eric W. Spivey (1) (2)	43	Director, chairman of the board
Jeffry R. Allen	52	Director
Kenneth D. Denman	45	Director
John C. Colligan (1)	49	Director
Henri J. Isenberg (2)	38	Director
Sunil Paul	39	Director
Jon Q. Reynolds, Jr. (1)	36	Director

(1) Member of the compensation committee

(2) Member of the audit committee

Enrique Salem has served as our president and chief executive officer and on our board of directors since April 2002. From February 2001 to March 2002, Mr. Salem served as senior vice president of products and technology at Oblix, Inc., a developer of identity-based security solutions. From October 1999 to January 2001, Mr. Salem was vice president of engineering and operations at Ask Jeeves Inc., a provider of natural language question answering technologies and services. From April 1990 to October 1999, Mr. Salem served as chief technical officer and vice president of the security and assistance business of Symantec Corporation. Mr. Salem holds an A.B. in Computer Science from Dartmouth College and is also a graduate of the AeA/Stanford Executive Institute at Stanford University.

Michael Irwin has served as our chief financial officer since April 2003 and as our vice president of finance from January 2002 until April 2003. From April 2000 to December 2001, Mr. Irwin served as vice president of finance at B2SB Technologies Corp. (previously known as SmartAge.com Corporation), a provider of software and services to small businesses. From December 1992 to March 2000, Mr. Irwin worked at PricewaterhouseCoopers LLP, a public accounting firm. Mr. Irwin received a B.S. in business administration from the University of Wisconsin, Milwaukee.

Ken Schneider has served various positions at our company since March 1999, most recently as chief technology officer and vice president of operations. From November 1993 to March 1999, Mr. Schneider was the president of South Beach Software, a software development and consulting company. Mr. Schneider received a B.S. in Engineering from Swarthmore College and an M.S. in Mechanical Engineering from the University of California, Berkeley.

Michael D. Conner has served as our senior vice president of worldwide sales since August 2002. From August 1997 to July 2002, Mr. Conner served in various positions at Trend Micro, Inc., a network security company, most recently as president of North American operations and senior

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vice president. From July 1995 to July 1997, Mr. Conner was vice president of sales at Astound Inc. (formerly Gold Disk, Inc.), a web conferencing and multi-media presentation software company. From August 1994 to July 1995, Mr. Conner was senior director of channel sales at Borland Software Corporation. Mr. Conner received a B.S. degree from Western Illinois University.

Brad Kingsbury has served as our vice president of engineering since November 2002. From November 2001 to October 2002, Mr. Kingsbury was vice president of engineering of McAfee.com Corporation (which was acquired by Network Associates, Inc.), an Internet security company. From October 1997 to September 2001, Mr. Kingsbury was self-employed as a consultant to a number of security and storage management software companies. From April 1996 to September 1997, Mr. Kingsbury served as the chief technical officer and vice president of engineering for CyberMedia Corporation (also acquired by Network Associates), an Internet security and productivity company. From July 1985 to April 1996, Mr. Kingsbury served as chief technologist at Symantec Corporation. Mr. Kingsbury received a B.S. degree in Computer Science from California State University, Northridge.

François A. Lavaste has served as our vice president of marketing since September 2001. From April 1999 to August 2001, Mr. Lavaste was vice president of marketing at B2SB Technologies Corp. From September 1996 to March 1999, Mr. Lavaste served as senior marketing manager in the small business division at Intuit Inc., a provider of business and financial management solutions for small businesses, consumers and accounting professionals. From April 1992 to March 2000, Mr. Lavaste was a director of Eneide, a customer relationship management software company co-founded by Mr. Lavaste and acquired in March 2000 by Coheris, a public company providing CRM, CTI, Mobile Internet and Voice over IP technology listed on the Euronext Paris “Nouveau Marché.” Mr. Lavaste received a B.A. degree in business administration from ESCP-EAP European School of Management, and an M.B.A. from Harvard Business School.

Bettina H. Koblick has served various positions at our company since April 2000, most recently as vice president of human resources. From July 1995 to April 2000, Ms. Koblick served as the division human resources manager at Curtis Instruments, a provider of integrated systems technology for electric vehicles. Ms. Koblick received a HR Management certification from the University of California, Berkeley.

Eric W. Spivey has served on our board of directors since April 1999 and as the chairman of our board of directors since February 2002 and from February 2002 to April 2002, Mr. Spivey served as our interim chief executive officer. From April 1999 to December 1999, Mr. Spivey served as the chairman, president and chief executive officer of NetGravity, Inc., a provider of online advertising and direct marketing solutions. From 1998 to March 1999, Mr. Spivey served as chairman, president and chief executive officer of Netcom On-Line Communications Services, Inc., a global Internet company. From 1996 to 1997 Mr. Spivey was president of Netcom International. From 1985 to 1995, Mr. Spivey held various senior executive positions with the Dun & Bradstreet Corporation, a provider of global business and marketing information. Mr. Spivey received a B.A. in Economics and Environmental Studies from the University of California, Santa Barbara and an M.B.A. from the McCombs School of Business, University of Texas at Austin.

Jeffry R. Allen has served on our board of directors since April 2004. Since August 2002, Mr. Allen has served as executive vice president, business operations for Network Appliance, Inc., a provider of storage and data management solutions, as its executive vice president, finance and operations and chief financial officer from May 2000 to August 2002, and as its senior vice

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president, finance and operations and chief financial officer from December 1996 to May 2000. From October 1994 to October 1996, Mr. Allen served in various capacities for Bay Networks, Inc., a developer and manufacturer of data network products and services, including senior vice president of operations and vice president and controller. Mr. Allen received a B.S. degree in Accounting/Information Systems from San Diego State University.

Kenneth D. Denman has served on our board of directors since March 2004. Since January 2003, Mr. Denman has served as the chairman of iPass, Inc., a provider of software-enabled enterprise connectivity services for mobile workers, as a member of its board of directors since December 2001 and as its president and chief executive officer since October 2001. From January 2000 to March 2001, Mr. Denman served as president and chief executive officer of AuraServ Communications, a managed service provider of broadband voice and data applications that ceased operations in March 2001. From August 1998 to May 2000, Mr. Denman served as senior vice president, national markets group of MediaOne, Inc., a broadband cable and communications company. From June 1996 to August 1998, Mr. Denman served as chief operating officer, wireless of MediaOne International, a broadband and wireless company. Mr. Denman also serves as a director of Openwave Systems, Inc., a provider of open standards software products and services for the communications industry. Mr. Denman received a B.S. degree in Accounting from Central Washington University and an M.B.A. from the University of Washington.

John C. Colligan has served on our board of directors since July 1998. Since March 1998, Mr. Colligan has been a partner with Accel Partners, a venture capital firm. Mr. Colligan co-founded Macromedia, Inc., a multimedia software company, in 1992 through a merger of Authorware and Macromind-Paracomp. From March 1992 to January 1993 Mr. Colligan served as president and chief operating officer of Macromedia, as president and chief executive officer from January 1993 to July 1995, as chairman, president and chief executive officer from July 1995 to November 1996, and as chairman from November 1996 to July 1998. From January 1989 to 1992, Mr. Colligan was president and chief executive officer of Authorware, a multimedia software company, and from 1983 to 1988, he held various positions at Apple Computer, Inc. Mr. Colligan received a B.S. degree in international economics from Georgetown University and a M.B.A from Stanford Graduate School of Business. Mr. Colligan is a member of the board of directors of CNET Networks, Inc.

Henri J. Isenberg has served on our board of directors since June 2001. Since June 1996, Mr. Isenberg has worked at Symantec Corporation, where since February 2000, Mr. Isenberg has served as vice president of business development, and from June 1996 to February 2000 as chief architect for Symantec’s anti-virus division. Mr. Isenberg received a B.S. degree in Computer Science and Engineering from the University of California, Los Angeles, and a M.B.A. from Woodbury University.

Sunil Paul, a founder of our company, has served on our board of directors since our inception in February 1998 and was our chief executive officer from February 1998 to April 2000, Mr. Paul was a founder of FreeLoader, Inc. (which was acquired by Individual, Inc.), a creator of web browsing utilities, and served as its chief executive officer from January 1996 to July 1997. From February 1994 to December 1995, Mr. Paul served as Internet product manager and director corporate development for America Online, Inc, an internet service provider. From 1991 to February 1994, Mr. Paul served as senior analyst for the United States Congress, Office of Technology Assessment and from 1991 to 1998 Mr. Paul served as a senior engineer for Booz, Allen & Hamilton, a consulting firm. Mr. Paul received a B.E. in Electrical Engineering from Vanderbilt University.

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Jon Q. Reynolds, Jr. has served on our board of directors since August 1999. Since July 1997, Mr. Reynolds has worked at Technology Crossover Ventures, a venture capital firm, where he is currently a general partner. Mr. Reynolds received an A.B. degree in Geography from Dartmouth College and a M.B.A. from Columbia Business School.

Board composition

Our board of directors consists of six members, Messrs. Colligan, Isenberg, Paul, Reynolds, Salem and Spivey. Our directors hold office until their successors have been elected or qualified or until the earlier of their death, resignation, disqualification or removal. There are no family relationships among any of our directors and executive officers.

Director compensation

Eric Spivey, our chairman of the board, receives an annual fee of $60,000 for serving as chairman. Other than Mr. Spivey, directors do not receive any cash fees for their services on the Board but are entitled to reimbursement of all reasonable out-of-pocket expenses incurred in connection with their attendance at board of directors and board committee meetings.

We have also offered our non-employee directors compensation in the form of stock options. During the last three fiscal years, Messrs. Colligan and Spivey have each received stock option grants of 10,000 shares per year, and during the last two fiscal years, Mr. Paul has received stock option grants of 10,000 shares per year. A total of 25% of the shares subject to the foregoing option grants vests at the end of one year after the grant date, and thereafter, 1/48 of the shares subject to the foregoing option grants vests monthly. In March 2004, Mr. Denman received a stock option grant of 50,000 shares of common stock, and in April 2004, Mr. Allen received a stock option grant of 60,000 shares of common stock. The shares subject to these two option grants become vested and exercisable in equal parts over a three-year period following the date of grant. In addition, all of the option grants specified in this paragraph become 100% vested and exercisable upon a change of control of Brightmail.

In addition, in February 2002, Mr. Spivey received an option to purchase 158,520 shares of our common stock that was 100% vested on the date of grant, when he served as our interim chief executive officer.

Following this offering, our non-employee directors will be entitled to reimbursement of business, travel and other related expenses incurred in connection with their attendance at meetings of the board of directors and committee meetings. In addition, the chairman of the board will continue to receive a $60,000 annual fee. In addition, our 2004 Equity Incentive Plan also provides for the automatic grant of options to our non-employee directors. Each non-employee director appointed to the board after the completion of this offering will receive an initial option to purchase              shares upon such appointment. In addition, beginning in 2005, non-employee directors who have been directors for at least six months will receive an option to purchase              shares immediately following each annual meeting of our stockholders. See “Benefit plans—2004 Equity Incentive Plan.”

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Board committees

Our board of directors has the authority to appoint committees to perform certain management and administrative functions. Our board of directors currently has an audit committee and a compensation committee.

Audit committee

Our audit committee is responsible for the oversight of our accounting, reporting and financial control practices. Among other functions, the audit committee is responsible for:

•  overseeing and monitoring our accounting and financial reporting processes and the audits and integrity of our financial statements;

•  appointing and overseeing the work of our independent auditors, and reviewing the adequacy of our system of overseeing the independent auditor’s qualifications, independence and performance;

•  assisting the board of directors in the oversight and monitoring of our compliance with legal and regulatory requirements;

•  reviewing our internal accounting and financial controls; and

•  reviewing our audited financial statements and reports and discussing the statements and reports with management, including any significant adjustments, management judgments and estimates, new accounting and policies.

Our audit committee currently consists of Messrs. Spivey and Isenberg, each of whom is a non-management member of our board of directors.

Compensation committee

Our compensation committee is primarily responsible for reviewing and approving the compensation, benefits, corporate goals and objectives of our chief executive officer and our other executive officers and approving and evaluating our employee benefit plans. Among other functions, the compensation committee is responsible for:

•  reviewing and making recommendations to the board of directors regarding compensation goals and guidelines for employees and amendments to equity compensation plans;

•  administering our equity compensation plans;

•  approving all option grants to our executive officers; and

•  producing a report on executive compensation for inclusion in our proxy statement.

Our compensation committee currently consists of Messrs. Colligan, Reynolds and Spivey, each of whom is a non-management member of our board of directors. Our board of directors has approved a compensation committee charter that meets the applicable standards of the SEC and Nasdaq.

Compensation committee interlocks and insider participation

No interlocking relationship exists between our board of directors or compensation committee and the board of directors or compensation committee of any other company, nor has any such interlocking relationship existed in the past.

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Executive compensation

The following table sets forth information concerning the compensation earned by our chief executive officer and each of our four other most highly compensated executive officers, collectively referred to as our named executive officers, during the fiscal year ended January 31, 2004:

Summary compensation table

	Annual compensation						Long-term compensation
Name and principal position	Salary		Bonus		Other annual compensation		Securities underlying options	All other compensation (1)
Enrique Salem President and chief executive officer	$	240,000	$	175,157	—		200,000	$	234
Michael Irwin Chief financial officer		170,000		68,006	—		131,841		234
Ken Schneider Chief technical officer and vice president of operations		170,000		55,961	—		—		234
Michael D. Conner Senior vice president of worldwide sales		165,000		155,424	—		—		234
Brad Kingsbury Vice president of engineering		210,000		82,934	45,785	(2)	—		234

(1) The amounts listed in this column reflect payment by us for term life insurance on behalf of each named executive officer.

(2) Amount reflects reimbursement for expenses incurred with respect to Mr. Kingbury’s travel from his home in Los Angeles to our offices in San Francisco, as well as living expenses incurred while in San Francisco.

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Stock option grants in the last fiscal year

The following table sets forth certain information concerning grants of stock options to each of our named executive officers during the fiscal year ended January 31, 2004. The percentage of total options set forth below is based on an aggregate of 1,071,228 options granted to employees during the fiscal year ended January 31, 2004. All options were granted at the fair market value of our common stock, as determined by our board of directors, on the date of grant.

Name	Number of securities underlying options granted (1)	% of total options granted to employees in fiscal year		Exercise or base price per share		Expiration date	Potential realizable value at assumed annual rates of stock price appreciation for option term ($) (2)
							5%		10%
Enrique Salem	200,000	18.67	%	$	0.80	7/15/13	$		$
Michael Irwin	131,841	12.31	%	$	0.80	4/08/13
Ken Schneider	—	—			—	—		—		—
Michael D. Conner	—	—			—	—		—		—
Brad Kingsbury	—	—			—	—		—		—

(1) These outstanding stock options were granted under our 1998 Stock Option Plan. The shares subject to these options vest over four years, at a rate of 25% of the shares subject to the option on the first anniversary of April 1, 2003 and then at a rate of 1/48th per month thereafter. See “Benefit plans—1998 Stock Option Plan” for a further description of certain terms relating to these options. In addition, the stock options granted to our officers are subject to the vesting acceleration provisions described under “Employment agreements and change of control arrangements” set forth below.

(2) The potential realizable values are net of exercise price but do not take into account the payment of taxes associated with exercise. The amounts represent hypothetical gains that could be achieved for the respective options if exercised at the end of the option term based on assumed annual rates of compound stock price appreciation from the date of this prospectus of 5% and 10% based on the assumed initial public offering price of $         per share. The 5% and 10% assumed annual rates of compounded stock price appreciation are mandated by rules of the Securities and Exchange Commission and do not represent our estimate or projection of our future common stock prices. Actual gains, if any, on stock option exercises are dependent on the future performance of our common stock and overall stock market conditions and the option holders’ continued service with us.

Aggregated option exercises in last fiscal year and fiscal year end option values

None of our named executive officers exercised options during the fiscal year ended January 31, 2004. The following table sets forth the number and value of securities underling options held as of January 31, 2004.

Name	Number of shares acquired on exercise	Value received ($)	Number of securities underlying unexercised options at January 31, 2004(1)			Value of unexercised in-the-money options at year end (2)
			Exercisable		Unexercisable	Exercisable	Unexercisable
Enrique Salem	—	—	2,419,274	(3)	—	$	—
Michael Irwin	—	—	386,841	(4)	—		—
Ken Schneider	—	—	312,117	(5)	—		—
Michael D. Conner	—	—	331,841	(6)	—		—
Brad Kingsbury	—	—	497,762	(7)	—		—

(1) Options granted to our officers under our 1998 stock option plan may be exercised immediately upon grant and prior to full vesting, subject to the optionee entering into a restricted stock purchase agreement with respect to unvested shares.

(2) There was no public trading market for our common stock as of January 31, 2004. The value of unexercised in-the-money options is based on the assumed initial public offering price of $             per share.

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(3) Includes 970,932 vested shares and 1,448,342 unvested shares as of January 31, 2004.

(4) Includes 118,333 vested shares and 268,508 unvested shares as of January 31, 2004.

(5) Includes 254,123 vested shares and 57,994 unvested shares as of January 31, 2004.

(6) Includes 110,614 vested shares and 221,227 unvested shares as of January 31, 2004.

(7) Includes 145,181 vested shares and 352,581 unvested shares as of January 31, 2004.

Employment agreements and change of control arrangements

Enrique Salem

On March 11, 2002, we entered into an employment agreement with Mr. Salem, our president and chief executive officer, pursuant to which we granted Mr. Salem an option to purchase 2,219,274 shares of our common stock. The agreement also provides that Mr. Salem shall be: (1) paid a specified base salary, which will be reviewed at least annually by the board of directors and which may be subject to increases that the board of directors may approve, and (2) eligible to receive an annual bonus based upon criteria to be mutually agreed upon by Mr. Salem and the board of directors. The agreement provides that upon a change of control of the company, Mr. Salem shall be entitled to acceleration of vesting with respect to 25% of the shares subject to his stock options on the effective date of the change of control, and if Mr. Salem is constructively terminated or is terminated without cause within six months after a change of control of the company, he will be entitled to acceleration of vesting with respect to all of the shares subject to his stock options. In addition, if Mr. Salem is constructively terminated or is terminated without cause, he shall be entitled to severance payments at his base salary rate for either: (1) 12 months, if the termination occurs within six months after a change of control, or (2) six months, if the termination occurs at any time other than within six months after a change of control. We also entered into a stock option agreement with Mr. Salem effective July 15, 2003, pursuant to which we granted Mr. Salem an option to purchase 200,000 shares of our common stock. A constructive termination is generally deemed to have occurred upon any one of the following three events: (1) a material reduction in the executive’s title or responsibilities; (2) a reduction of the executive’s base salary; and (3) the relocation of the executive to a facility more than 50 miles from the company’s current location, without the executive’s express written consent.

Michael Irwin

On May 13, 2002, we entered into an offer letter with Mr. Irwin, our chief financial officer, pursuant to which we granted Mr. Irwin an option to purchase 200,000 shares of our common stock. The agreement also provides that Mr. Irwin shall be paid a specified base salary and shall be eligible to receive an annual bonus based upon the achievement of objectives to be mutually agreed upon by Mr. Irwin and Brightmail. The agreement provides that upon a change of control of the company, Mr. Irwin shall be entitled to acceleration of vesting with respect to 25% of the shares subject to his stock options subject to the agreement, and if Mr. Irwin is constructively terminated or is terminated without cause within six months after a change of control of the company, he will be entitled to acceleration of vesting with respect to all of the shares subject to the stock options subject to the agreement. We entered into a stock option agreement with Mr. Irwin on April 8, 2003, pursuant to which we granted Mr. Irwin an option to purchase 131,841 shares of our common stock, with the same terms with respect to acceleration of vesting upon and after a change of control that are contained in his offer letter. We entered into stock option agreements with Mr. Irwin on the following dates to purchase the following number of shares: 55,000 shares, on September 12, 2002; 35,000 shares, on February 5, 2004; and 20,000 shares, on March 10, 2004. These agreements provide that if Mr. Irwin is constructively terminated or is

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terminated without cause within six months after a change of control of the company, 75% of the shares subject to each of these stock option agreements shall become vested and exercisable.

Ken Schneider

On May 23, 2002, we entered into an offer letter with Mr. Schneider, our chief technology officer and vice president of operations, pursuant to which we agreed that Mr. Schneider shall be paid a specified base salary and shall be eligible to receive an annual bonus based upon the achievement of objectives to be mutually agreed upon by Mr. Schneider and Brightmail. Effective September 12, 2002, we entered into a stock option agreement with Mr. Schneider, pursuant to which we granted Mr. Schneider an option to purchase 35,000 shares of our common stock. Effective February 5, 2004, we entered into a stock option agreement with Mr. Schneider, pursuant to which we granted Mr. Schneider an option to purchase 25,000 shares of our common stock. These agreements provide that if Mr. Schneider is constructively terminated or is terminated without cause within six months after a change of control of the company, 75% of the shares subject to these stock option agreements shall become vested and exercisable.

Michael D. Conner

On June 12, 2002, we entered into an offer letter with Mr. Conner, our senior vice president of worldwide sales, pursuant to which we granted Mr. Conner an option to purchase 331,841 shares of our common stock. The agreement also provides that Mr. Conner shall be paid a specified base salary and shall be eligible to receive an annual bonus based upon the achievement of objectives to be mutually agreed upon by Mr. Conner and Brightmail. The agreement provides that if Mr. Conner is terminated without cause, he shall be entitled to severance payments at his base salary rate for six months. In addition, upon a change of control of the company, Mr. Conner shall be entitled to acceleration of vesting with respect to 25% of the shares subject to his stock options subject to the agreement, and if Mr. Conner is terminated without cause within six months after a change of control of the company, he will be entitled to acceleration of vesting with respect to an additional 25% of the shares subject to his stock options subject to the agreement. Effective February 5, 2004, we entered into a stock option agreement with Mr. Conner, pursuant to which we granted Mr. Conner an option to purchase 35,000 shares of our common stock. This agreement provides that if Mr. Conner is constructively terminated or is terminated without cause within six months after a change of control of the company, 75% of the shares subject to this stock option agreement shall become vested and exercisable.

Brad Kingsbury

On October 23, 2002, we entered into an offer letter with Mr. Kingsbury, our vice president of engineering, pursuant to which we granted Mr. Kingsbury an option to purchase 497,762 shares of our common stock. The agreement also provides that Mr. Kingsbury shall be paid a specified base salary and shall be eligible to receive an annual bonus based upon the achievement of objectives to be mutually agreed upon by Mr. Kingsbury and Brightmail. This offer letter provides that if Mr. Kingsbury is constructively terminated or is terminated without cause, he shall be entitled to severance payments at his base salary rate for either: (1) six months, if the termination occurs within nine months after a change of control, or (2) three months, if the termination occurs at any time other than within nine months after a change of control. In addition, upon a change of control of the company, Mr. Kingsbury shall be entitled to acceleration of vesting with

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respect to 25% of the shares subject to his stock options, and if Mr. Kingsbury is constructively terminated or is terminated without cause within nine months after a change of control of the company, he will be entitled to acceleration of vesting with respect to 75% of the shares subject to his stock options. Pursuant to the offer letter, we have agreed to reimburse reasonable and necessary living expenses incurred, as well as travel expenses with respect to Mr. Kingsbury’s travel from his home in Los Angeles to our offices in San Francisco each week. Effective February 5, 2004, we entered into a stock option agreement with Mr. Kingsbury, pursuant to which we granted Mr. Kingsbury an option to purchase 62,500 shares of our common stock, with the same terms with respect to acceleration of vesting upon and after a change of control that are contained in his offer letter.

François A. Lavaste

On September 7, 2001, we entered into an offer letter with François A. Lavaste, our vice president of marketing, pursuant to which we granted Mr. Lavaste an option to purchase up to 175,000 shares of our common stock. The agreement also provides that Mr. Lavaste shall be paid a specified base salary and shall be eligible to receive an annual bonus based upon the achievement of objectives to be mutually agreed upon by Mr. Lavaste and Brightmail. We entered into stock option agreements with Mr. Lavaste on the following dates to purchase the following number of shares: 35,000 shares, on September 12, 2002; 20,000 shares, on February 5, 2004; and 10,000 shares, on March 10, 2004. These agreements provide that if Mr. Lavaste is constructively terminated or is terminated without cause within six months after a change of control of the company, 75% of the shares subject to these stock option agreements shall become vested and exercisable.

Bettina Koblick

On March 24, 2000, we entered into an offer letter with Bettina Koblick, our vice president of human resources, pursuant to which we granted Ms. Koblick an option to purchase up to 40,000 shares of our common stock. The agreement also provides that Ms. Koblick shall be paid a specified base salary. We entered into stock option agreements with Ms. Koblick on the following dates to purchase the following number of shares: 16,000 shares, on September 12, 2002; 12,500 shares, on February 5, 2004; and 20,000 shares, on March 10, 2004. These agreements provide that if Ms. Koblick is constructively terminated or is terminated without cause within six months after a change of control of the company, 75% of the shares subject to these stock option agreements shall become vested and exercisable.

Benefit plans

1998 Stock Option Plan

Our 1998 Stock Option Plan was adopted by our board of directors in March 1998 and approved by our stockholders in April 1998. Our 1998 Stock Option Plan provides for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, to our employees, and for the grant of nonstatutory stock options to our employees,

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directors and consultants. We will not grant any additional awards under our 1998 Stock Option Plan following this offering. Instead we will grant options under our 2004 Equity Incentive Plan.

A total of 9,909,974 shares of our common stock were authorized for issuance under the 1998 Stock Option Plan. As of January 31, 2004, options to purchase 6,151,184 shares of common stock were outstanding and 2,015,465 shares were available for future grant under this plan. Our 1998 Stock Option Plan provides that in the event of our merger with or into another corporation or a sale of substantially all of our assets, the successor corporation will assume or substitute each award. If the outstanding awards are not assumed or substituted, the administrator will provide notice to the optionee that he or she has the right to exercise the award as to all of the shares subject to the award, including shares that would not otherwise be exercisable, for a period of 15 days from the date of notice. The award will terminate upon the expiration of the 15-day period.

2004 Equity Incentive Plan

Our board of directors adopted our 2004 Equity Incentive Plan in March 2004, and we expect our stockholders to approve it prior to the completion of this offering. Our 2004 Equity Incentive Plan provides for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code, to our employees and any parent and subsidiary corporations’ employees, and for the grant of nonstatutory stock options, restricted stock, stock appreciation rights, performance units and performance shares to our employees, directors and consultants and any parent and subsidiary corporations’ employees and consultants.

We have reserved a total of 2,500,000 shares of our common stock for issuance pursuant to the 2004 Equity Incentive Plan plus (1) any shares which have been reserved but not issued under our 1998 Stock Option Plan as of the effective date of this offering and (2) any shares returned to our 1998 Stock Option Plan on or after the effective date of this offering as a result of termination of options or the repurchase of unvested shares issued under the 1998 Stock Plan. In addition, our 2004 Equity Incentive Plan provides for annual increases in the number of shares available for issuance thereunder on the first day of each fiscal year, beginning with our fiscal year 2005, equal to the least of:

•  3% of the outstanding shares of our common stock on the first day of the fiscal year;

•  3,000,000 shares; and

•  such lesser amounts as our board of directors may determine.

Our board of directors or a committee of our board administers our 2004 Equity Incentive Plan. In the case of options intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Internal Revenue Code, the committee will consist of two or more “outside directors” within the meaning of Section 162(m) of the Internal Revenue Code. The administrator has the power to determine the terms of the awards, including the exercise price, the number of shares subject to each such award, the exercisability of the awards and the form of consideration, if any, payable upon exercise. The administrator also has the authority to institute an exchange program whereby the exercise prices of outstanding awards may be reduced or outstanding awards may be surrendered in exchange for awards with a lower exercise price.

The administrator determines the exercise price of options granted under our 2004 Equity Incentive Plan, but with respect to nonstatutory stock options intended to qualify as

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“performance-based compensation” within the meaning of Section 162(m) of the Internal Revenue Code and all incentive stock options, the exercise price must at least be equal to the fair market value of our common stock on the date of grant. The term of an incentive stock option may not exceed ten years, except that with respect to any participant who owns 10% of the voting power of all classes of our outstanding stock, the term must not exceed five years and the exercise price must equal at least 110% of the fair market value on the grant date. The administrator determines the term of all other options.

No optionee may be granted an option to purchase more than              shares in any fiscal year. However, in connection with his or her initial service, an optionee may be granted an additional option to purchase up to              shares.

After termination of an employee, director or consultant, he or she may exercise his or her option for the period of time stated in the option agreement. Generally, if termination is due to death or disability, the option will remain exercisable for 12 months. In all other cases, the option will generally remain exercisable for three months. However, an option generally may not be exercised later than the expiration of its term.

Stock appreciation rights may be granted under our 2004 Equity Incentive Plan. Stock appreciation rights allow the recipient to receive the appreciation in the fair market value of our common stock between the exercise date and the date of grant. The administrator determines the terms of stock appreciation rights, including when such rights become exercisable and whether to pay the increased appreciation in cash or with shares of our common stock, or a combination thereof.

Restricted stock may be granted under our 2004 Equity Incentive Plan. Restricted stock awards are shares of our common stock that vest in accordance with terms and conditions established by the administrator. The administrator will determine the number of shares of restricted stock granted to any employee. The administrator may impose whatever conditions to vesting it determines to be appropriate. For example, the administrator may set restrictions based on the achievement of specific performance goals. Shares of restricted stock that do not vest are subject to our right of repurchase or forfeiture.

Performance units and performance shares may be granted under our 2004 Equity Incentive Plan. Performance units and performance shares are awards that will result in a payment to a participant only if performance goals established by the administrator are achieved or the awards otherwise vest. The administrator will establish organizational or individual performance goals in its discretion, which, depending on the extent to which they are met, will determine the number and/or the value of performance units and performance shares to be paid out to participants. Performance units shall have an initial dollar value established by the administrator prior to the grant date. Performance shares shall have an initial value equal to the fair market value of our common stock on the grant date.

Our 2004 Equity Incentive Plan also provides for the automatic grant of options to our non-employee directors. Each non-employee director appointed to the board after the completion of this offering will receive an initial option to purchase             shares upon such appointment subject to        years vesting. In addition, beginning in 2005, non-employee directors who have been directors for at least six months will receive a subsequent option to purchase              shares immediately following each annual meeting of our stockholders. All options granted under the automatic grant provisions have a term of ten years and an exercise price equal to fair market value on the date of grant.

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Unless the administrator provides otherwise, our 2004 Equity Incentive Plan does not allow for the transfer of awards and only the recipient of an award may exercise an award during his or her lifetime.

Our 2004 Equity Incentive Plan provides that in the event of our change in control, the successor corporation or its parent or subsidiary will assume or substitute an equivalent award for each outstanding award. If there is no assumption or substitution of outstanding awards, the administrator will provide notice to the recipient that he or she has the right to exercise the option and stock appreciation right as to all of the shares subject to the award, all restrictions on restricted stock will lapse, and all performance goals or other vesting requirements for performance shares and units will be deemed achieved and all other terms and conditions met. The award will terminate upon the expiration of the period of time the administrator provides in the notice. In the event the service of an outside director is terminated on or following a change in control, other than pursuant to a voluntary resignation, his or her options will fully vest and become immediately exercisable.

Our 2004 Equity Incentive Plan will automatically terminate in 2014, unless we terminate it sooner. In addition, our board of directors has the authority to amend, suspend or terminate the 2004 Equity Incentive Plan provided such action does not impair the rights of any participant.

2004 Employee Stock Purchase Plan

Concurrently with this offering, we intend to establish the 2004 Employee Stock Purchase Plan. A total of 1,050,000 shares of our common stock will be reserved for issuance under the plan. In addition, our 2004 Employee Stock Purchase Plan provides for annual increases in the number of shares available for issuance under the 2004 Employee Stock Purchase Plan on the first day of each fiscal year, beginning with our fiscal year 2006, equal to the lesser of:

•  2% of the outstanding shares of our common stock on the first day of the fiscal year;

•  1,000,000 shares; and

•  such lesser amount as may be determined by our board of directors.

Our board of directors or a committee of our board administers the 2004 Employee Stock Purchase Plan. Our board of directors or its committee has full and exclusive authority to interpret the terms of the 2004 Employee Stock Purchase Plan and determine eligibility.

All of our employees are eligible to participate if they are customarily employed by us or any participating subsidiary for at least 20 hours per week and more than five months in any calendar year. However, an employee may not be granted an option to purchase stock if such employee:

•  immediately after grant owns stock possessing 5% or more of the total combined voting power or value of all classes of our capital stock; or

•  whose rights to purchase stock under all of our employee stock purchase plans accrues at a rate that exceeds $25,000 worth of stock for each calendar year.

Our 2004 Employee Stock Purchase Plan is intended to qualify under Section 423 of the Internal Revenue Code and provides for consecutive, overlapping 12-month offering periods. Each offering period includes two 6-month purchase periods. The offering periods generally start on the first trading day on or after                      and                      of each year, except for the first such offering period which will commence on the first trading day on or after the effective date of this offering and will end on the first trading day on or after                     .

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Our 2004 Employee Stock Purchase Plan permits participants to purchase common stock through payroll deductions of up to 15% of their eligible compensation which includes a participant’s base salary, wages, overtime pay, commissions, bonuses and other compensation remuneration paid directly to the employee. A participant may purchase a maximum of              shares during a six-month purchase period.

Amounts deducted and accumulated by the participant are used to purchase shares of our common stock at the end of each six-month purchase period. The price is 85% of the lower of the fair market value of our common stock at the beginning of an offering period or at the end of a purchase period. If the fair market value at the end of a purchase period is less than the fair market value at the beginning of the offering period, participants will be withdrawn from the current offering period following their purchase of shares on the purchase date and will be automatically re-enrolled in a new offering period. Participants may end their participation at any time during an offering period, and will be paid their payroll deductions to date. Participation ends automatically upon termination of employment with us.

A participant may not transfer rights granted under the 2004 Employee Stock Purchase Plan other than by will, the laws of descent and distribution or as otherwise provided under the 2004 Employee Stock Purchase Plan.

In the event of our change of control, a successor corporation may assume or substitute each outstanding option. If the successor corporation refuses to assume or substitute for the outstanding options, the offering period then in progress will be shortened, and a new exercise date will be set.

Our 2004 Employee Stock Purchase Plan will automatically terminate in 2024, unless we terminate it sooner. Our board of directors has the authority to amend or terminate our 2004 Employee Stock Purchase Plan, except that, subject to certain exceptions described in the 2004 Employee Stock Purchase Plan, no such action may adversely affect any outstanding rights to purchase stock under our 2004 Employee Stock Purchase Plan.

Indemnification of directors and executive officers and limitation of liability

As permitted by the Delaware General Corporation Law, our certificate of incorporation and bylaws limit or eliminate the personal liability of our directors for a breach of their fiduciary duty of care as a director. The duty of care generally requires that, when acting on behalf of the corporation, directors exercise an informed business judgment based on all material information reasonably available to them. Consequently, a director will not be personally liable to us or our stockholders for monetary damages or breach of fiduciary duty as a director, except for liability for:

•  any breach of the director’s duty of loyalty to us or our stockholders;

•  acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;

•  unlawful payments of dividends or unlawful stock repurchases, redemptions or other distributions; or

•  any transaction from which the director derived an improper personal benefit.

The limitations of liability do not affect the availability of equitable remedies such as injunctive relief or rescission. If Delaware law is amended to authorize the further elimination or limiting of

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the liability of a director, then the liability of our directors will be eliminated or limited to the furthest extent permitted by Delaware law as so amended.

Our certificate of incorporation allows us to indemnify our officers, directors and other agents to the full extent permitted by Delaware law. Our bylaws permit us to purchase insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in such capacity, regardless of whether Delaware law would permit indemnification, and to provide indemnification in circumstances in which indemnification is otherwise discretionary under Delaware law. Our bylaws specify circumstances in which indemnification for our directors and executive officers is mandatory and when we may be required to advance expenses before final disposition of any litigation.

We have entered into indemnification agreements with each of our directors and officers that are, in some cases, broader than the specific indemnification provisions permitted by Delaware law, and that may provide additional procedural protection. The indemnification agreements require us, among other things, to:

•  indemnify officers and directors against certain liabilities that may arise because of their status as officers or directors;

•  advance expenses, as incurred, to officers and directors in connection with a legal proceeding, subject to limited exceptions; or

•  obtain directors’ and officers’ insurance.

At present, there is no pending litigation or proceeding involving any of our directors, officers or employees in which indemnification is sought, nor are we aware of any threatened litigation that may result in claims for indemnification.

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Certain relationships and related-party transactions

We describe below transactions, or series of similar transactions, that occurred since February 1, 2001, to which we were or will be a party:

•  in which the amounts involved exceeded or will exceed $60,000; and

•  in which any director, executive officer, holder of more than 5% of our common stock or any member of their immediate family had or will have a direct or indirect material interest.

Option grants to directors and officers

We have granted options to purchase common stock to our directors and officers. Please see “Management—Director compensation” and “Management—Employment agreements and change of control arrangements.”

Transactions with Symantec Corporation

On March 28, 2003, we entered into an Amended and Restated Symantec Service Provider Agreement, as amended on August 25, 2003, with Symantec Corporation, a Delaware corporation and Symantec Limited, an Irish corporation. Under this agreement, we integrate certain of Symantec’s anti-virus technology with our anti-spam products. We estimated that subscription fees for our anti-virus module under this agreement represented approximately 20% of our total revenues for the fiscal year ended January 31, 2004. Amounts charged to costs of revenues pursuant to this agreement, were $2.0 million, $1.6 million and $1.2 million for fiscal years 2004, 2003 and 2002, respectively. In July 2000, we sold an aggregate of 3,585,657 shares of Series D preferred stock for a purchase price of $5.02 per share to Symantec. Henri Isenberg, one of our directors, is vice president of business development at Symantec.

Registration rights

Holders of our preferred stock are entitled to certain registration rights with respect to the common stock issued or issuable upon conversion of the preferred stock. See “Description of capital stock—registration rights.”

Indemnification and employment agreements

We have entered into indemnification agreements with each of our directors and officers. See “Management—Indemnification of directors and executive officers and limitation of liability.” We have also entered into employment agreements and offer letters with our officers. See “Management—Employment agreements and change of control arrangements.”

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Principal stockholders

The following table sets forth certain information with respect to the beneficial ownership of our common stock, as of February 29, 2004, and as adjusted to reflect the sale of common stock offered by us in this offering, for:

•  each person who we know beneficially owns more than 5% of our common stock;

•  each of our directors;

•  each executive officer named in the Summary compensation table; and

•  all of our directors and officers as a group.

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and includes voting or investment power with respect to the securities. Except as indicated by footnote, and subject to applicable community property laws, each person identified in the table possesses sole voting and investment power with respect to all capital stock shown to be held by them. The number of shares of common stock outstanding, on an as-converted basis, used in calculating the percentage for each listed person or entity includes common stock underlying options or a warrant held by the person or entity that are exercisable within 60 days of February 29, 2004, but excludes common stock underlying options or warrants held by any other person or entity. Percentage of beneficial ownership is based on 26,949,847 shares of common stock outstanding as of February 29, 2004, after giving effect to the conversion of all outstanding preferred stock upon the closing of this offering. The numbers shown in the table assume no exercise by the underwriters of their over-allotment option. Unless otherwise indicated, the principal address of each of the stockholders below is c/o Brightmail, Incorporated, 301 Howard St., Suite 1800, San Francisco, California 94105.

		Percentage beneficially owned
Name	Number of shares	Prior to offering		After offering
Five percent stockholders:
Accel Partners (1)	5,265,501	19.54	%	%
Symantec Corporation (2)	3,585,657	13.30
Technology Crossover Ventures (3)	3,440,077	12.76
Andreas V. Bechtolsheim	1,473,726	5.47
Executive officers and directors:
Enrique Salem (4)	2,419,274	8.24
Michael Irwin (5)	421,841	1.54
Ken Schneider (6)	337,117	1.24
Michael D. Conner (7)	366,841	1.34
Brad Kingsbury (8)	560,262	2.04
Eric W. Spivey (9)	305,324	1.12
Jeffry R. Allen	—	—
Kenneth D. Denman	—	—
John C. Colligan (10)	282,284	1.05
Henri Isenberg (2)	3,585,657	13.30
Sunil Paul (11)	5,241,622	19.45
Jon Q. Reynolds, Jr. (3)	3,440,077	12.76
All executive officers and directors as a group (14 persons) (12)	17,285,601	54.65

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* Represents beneficial ownership of less than 1%

(1) Principal address is 428 University Avenue, Palo Alto, CA 94301. Number of shares includes 3,745,615 shares held by Accel VI L.P., 53,333 shares held by Accel VI-S L.P., 478,553 shares held by Accel Internet Fund II L.P., 357,012 shares held by Accel Investors ‘98 L.P., 82,537 shares held by Accel Investors ‘98-S L.P., and 68,451 shares held by Accel Keiretsu VI L.P. Mr. Colligan is a partner at Accel Partners without dispositive control over these shares.

(2) Principal address is 20330 Stevens Creek Boulevard, Cupertino, CA 95014. Mr. Isenberg is the vice president of business development for Symantec. Mr. Isenberg disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein.

(3) Principal address is 528 Ramona Street, Palo Alto, CA 94301. Number of shares includes 3,153,633 shares held by TCV III (Q), L.P., 142,813 shares held by TCV III Strategic Partners, L.P., 118,651 shares held by TCV III, L.P., and 24,980 shares held by TCV III (G.P.)(the “TCV Funds”). Mr. Reynolds, a director of the Company, is a member of Technology Crossover Management III, L.L.C. which is the General Partner of the TCV Funds. Mr. Reynolds disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein.

(4) Includes options to purchase 2,419,274 shares, all of which are exercisable within 60 days of February 29, 2004. Of these shares, 1,159,637 are vested within 60 days of February 29, 2004.

(5) Includes options to purchase 421,841 shares, all of which are exercisable within 60 days of February 29, 2004. Of these shares, 167,231 are vested within 60 days of February 29, 2004.

(6) Includes options to purchase 337,117 shares, all of which are exercisable within 60 days of February 29, 2004. Of these shares, 267,379 are vested within 60 days of February 29, 2004.

(7) Includes options to purchase 336,841 shares, all of which are exercisable within 60 days of February 29, 2004. Of these shares, 131,354 are vested within 60 days of February 29, 2004.

(8) Includes options to purchase 560,262 shares, all of which are exercisable within 60 days of February 29, 2004. Of these shares, 176,291 are vested within 60 days of February 29, 2004.

(9) Includes: 10,000 shares held by Eric W. Spivey, Trustee of the Spivey Living Trust Dated 5/24/99 and issued upon exercise of a stock option, 1,250 of which are subject to a repurchase option we hold as of 60 days after February 29, 2004; and options to purchase 208,250 shares, all of which are exercisable within 60 days of February 29, 2004; of these shares, 173,104 are vested within 60 days of February 29, 2004.

(10) Includes options to purchase 40,000 shares, all of which are exercisable within 60 days of February 29, 2004. Of these shares, 19,375 are vested within 60 days of February 29, 2004.

(11) Includes 20,000 shares issued upon exercise of stock options, of which 16,042 are subject to a repurchase option we hold as of 60 days after February 29, 2004.

(12) Includes an aggregate of: options to purchase 4,679,157 shares, all of which are exercisable within 60 days of February 29, 2004, and of which 2,562,227 are vested within 60 days of February 29, 2004; and 290,404 shares issued upon exercise of stock options, of which 17,292 are subject to a repurchase option we hold as of 60 days after February 29, 2004.

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Description of capital stock

Upon the closing of the offering, our authorized capital stock will consist of 100,000,000 shares of common stock, $0.001 par value, and 5,000,000 shares of preferred stock, $0.001 par value.

Common stock

As of February 29, 2004, after giving effect to the conversion of all outstanding convertible preferred stock into shares of common stock, there were 26,949,847 shares of common stock outstanding held of record by approximately 145 stockholders. In addition, as of February 29, 2004, 6,822,718 shares of our common stock were subject to outstanding options and 73,099 shares of our common stock were subject to outstanding warrants. Upon completion of this offering, there will be              shares of common stock outstanding, assuming no exercise of the underwriters’ over-allotment option and no exercise of outstanding stock options or warrants after February 29, 2004. In addition, 2,500,000 shares of common stock have been reserved for issuance under our 2004 Equity Incentive Plan, and 1,050,000 shares of common stock have been reserved for issuance under our 2004 Employee Stock Purchase Plan.

The holders of common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. Subject to preferences that may apply to any outstanding shares of preferred stock, the holders of our common stock will receive ratably any dividends our board of directors declares out of funds legally available for that purpose. If we liquidate, dissolve or windup, the holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities and any liquidation preference of any of our outstanding convertible preferred stock. Holders of our common stock have no preemptive rights or rights to convert their common stock into any other securities or other subscription right. There are no redemption or sinking fund provisions applicable to the common stock. All outstanding shares of common stock are fully paid and non-assessable, and the shares of common stock to be issued in the offering will be fully paid and non-assessable. The rights, preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of any shares of any series of preferred stock that we may designate in the future.

Preferred stock

After the completion of the offering, our board of directors has the authority, without further action by the stockholders, to issue up to 5,000,000 shares of preferred stock in one or more series and to fix the designations, powers, preferences, privileges of the preferred stock, including dividend rights, conversion rights, voting rights terms of redemption, liquidation preference, sinking fund terms and number of shares constituting any series or the designation of any series. The board of directors, without common stockholder approval, can issue preferred stock with voting, conversion or other rights that could adversely affect the voting power and other rights of the holders of common stock. Preferred stock could thus be issued quickly with terms calculated to delay or prevent a change in control of or make removal of management more difficult and/or impair the liquidation rights of our common stock. Additionally, the issuance of preferred stock may have the effect of decreasing the market price of the common stock. After the completion of this offering, no shares of preferred stock will be outstanding, and we currently have no plans to issue any preferred stock.

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Warrants

As of February 29, 2004, warrants to purchase a total of 73,099 shares of our common stock were outstanding with exercise prices ranging from $1.50 to $5.02 per shares and a weighted exercise price of $2.82 per share. Each warrant contains provisions for the adjustment of the exercise price and the number of shares issuable upon the exercise of the warrant in the event of stock dividends, stock splits, reorganizations, reclassifications, merger and consolidations.

Registration rights

Upon completion of the offering, the holders of an aggregate of approximately 21,012,474 shares of common stock issuable upon the conversion of all outstanding shares of our convertible preferred stock, including 73,099 shares of common stock issuable upon the exercise of warrants to purchase our convertible preferred stock, are entitled to rights to cause their shares to be registered under the Securities Act of 1933, as amended. These registration rights are contained in our amended and restated investors’ rights agreement and in certain outstanding warrants, which incorporate the terms of the investor rights agreement. These registration rights include demand registration rights, piggyback registration rights exercisable in connection with any registration proposed by us or holders of demand registration rights, and Form S-3 registration rights, as described below. The registration rights under the investors’ rights agreement will expire five years following the completion of this offering, or for any particular stockholder with registration rights, at such time following this offering when all securities held by that stockholder subject to registration rights may be sold pursuant to Rule 144 under the Securities Act during any ninety day period. These registration rights are subject to conditions and limitations, including the right of underwriters to limit the number of shares of our common stock included in certain registration statements.

Demand registration rights

At any time six months after the closing of this offering, and before the expiration of these registration rights, if requested by the holders of at least thirty percent of our then outstanding shares of common stock having registration rights under the investors’ rights agreement, we will be required to register all or a portion of their shares. We are only required to effect two registrations in response to this demand registration right. Each demand registration right exercised must cover a sale of securities with a total aggregate public offering price, net of commissions, of more than $10.0 million. We may postpone the filing of any registration statement for up to 90 days once in any 12-month period if we determine that the filing would be seriously detrimental to our stockholders and us. The underwriters of any underwritten offering have the right to limit the number of shares to be included in a registration statement filed in response to the exercise of these demand registration rights, provided that the number may not be reduced unless all other securities are excluded from the registration statement. We must pay all expenses, except for underwriters’ discounts and commissions, incurred in connection with these demand registration rights.

Piggyback registration rights

If we register any securities for public sale, our stockholders with registration rights under the rights agreement have the right to include their shares in the registration, subject to specified exceptions. The underwriters of any underwritten offering have the right to limit the number of shares registered by these stockholders, subject to certain limitations. We must pay all expenses,

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except for underwriters’ discounts and commissions, incurred in connection with these piggyback registration rights.

Form S-3 registration rights

If we are eligible to file a registration statement on Form S-3, holders of at least ten percent of our then outstanding shares of common stock having Form S-3 registration rights under the investors’ rights agreement can require us to register their shares, provided that the total price of the shares of common stock offered to the public is at least $1.0 million and subject to other exceptions. We are not required to file a registration statement on Form S-3 if we have already effected two registrations on Form S-3 at the request of the holders of shares having these registration rights in the 12-month period prior to the holder’s request. We may postpone the filing of a registration statement for up to 90 days once in any 12-month period if we determine that the filing would be seriously detrimental to our stockholders and us. We must pay all expenses, except for underwriters’ discounts and commissions, incurred in connection with these Form S-3 registration rights.

Certain provisions of our certificate of incorporation and bylaws and Delaware anti-takeover law

Certain provisions of Delaware law and our certificate of incorporation and bylaws could make more difficult the acquisition of us by means of a tender offer, a proxy contest, or otherwise, and the removal of incumbent officers and directors. These provisions are expected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to first negotiate with us. We believe that the benefits of increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweighs the disadvantages of discouraging such proposals, including proposals that are priced above the then current market value of our common stock, because, among other things, negotiation of such proposals could result in an improvement of their terms.

Certificate of incorporation and bylaws

Our certificate of incorporation and bylaws include provisions that:

•  allow the board of directors to issue, without further action by the stockholders, up to 5,000,000 shares of undesignated preferred stock;

•  require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent;

•  prohibit cumulative voting in the election of directors;

•  require that special meetings of our stockholders be called only by the board of directors, the chairman of the board, the chief executive officer or the president;

•  establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to the board of directors; and

•  require that certain amendments to the certificate of incorporation and the bylaws require the approval of the holders of at least 66 ²/3% of the voting power of all outstanding stock.

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The Delaware General Corporation Law

We are subject to Section 203 of the Delaware General Corporation Law. This provision generally prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years following the date the stockholder became an interested stockholder, unless:

•  prior to such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

•  upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned by persons who are directors and also officers and by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

•  on or subsequent to such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders and not by written consent, by the affirmative vote of at least 66 ²/3% of the outstanding voting stock that is not owned by the interested stockholder.

Section 203 defines a business combination to include:

•  any merger or consolidation involving the corporation and the interested stockholder;

•  any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder;

•  subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;

•  any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or

•  the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.

In general, Section 203 defines an “interested stockholder” as any entity or person beneficially owning 15% or more of the outstanding voting stock of a corporation, or an affiliate or associate of the corporation and was the owner of 15% or more of the outstanding voting stock of a corporation at any time within three years prior to the time of determination of interested stockholder status; and any entity or person affiliated with or controlling or controlled by such entity or person.

Transfer agent and registrar

The transfer agent and registrar for our common stock is             .

Listing

We have applied to have our common stock approved for quotation on the NASDAQ National Market under the trading symbol “BRML.” We have not applied to list its common stock on any other exchange or quotation system.

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Shares eligible for future sale

Immediately prior to this offering, there was no public market for our common stock. Future sales of substantial amounts of common stock in the public market could adversely affect the market price of the common stock. Furthermore, since only a limited number of shares will be available for sale shortly after this offering because of contractual and legal restrictions on resale described below, sales of substantial amounts of our common stock in the public market after the restrictions lapse could adversely affect the prevailing market price and our ability to raise capital in the future.

Upon completion of this offering, we will have outstanding an aggregate of              shares of common stock. Of these outstanding shares, the shares sold by us in the offering will be freely tradable without restriction or further registration under the Securities Act, unless these shares are purchased by “affiliates” as that term is defined in Rule 144 under the Securities Act. The              shares of common stock outstanding upon completion of the offering and held by existing stockholders will be “restricted securities” as that term is defined in Rule 144 under the Securities Act. Restricted shares may be sold in the public market only if registered or if they qualify for exemption under Rules 144, 144(k) or 701 promulgated under the Securities Act, which rules are summarized below, or another exemption.

Lock-up agreements

We have obtained lock-up agreements from all of our officers, directors, stockholders, warrant holders and optionholders under which they will agree not to transfer or dispose of, directly of indirectly, any shares of common stock or any securities convertible into or exercisable or exchangeable for shares of common stock, for a period of 180 days after the date of this prospectus without the prior written consent of J.P. Morgan Securities Inc. The lock-up agreements permit transfers of shares of our common stock in limited circumstances, provided that the transferee agrees to be bound in writing by the provisions of the lock-up agreement and that any such transfer shall not involve a disposition for value.

J.P. Morgan Securities Inc., in its sole discretion, may release the shares subject to the lock-up agreements in whole or in part at anytime with or without notice. We have been advised by J.P. Morgan Securities Inc. that, when determining whether or not to release shares from the lock-up agreements, J.P. Morgan Securities Inc. will consider, among other factors, the stockholder’s reasons for requesting the release, the number of shares for which the release is being requested and market conditions at the time. J.P. Morgan Securities Inc. has advised us that they have no present intention to release any of the shares subject to the lock-up agreements prior to the expiration of the lock-up period.

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As a result of these lock-up agreements and rules of the Securities Act, the restricted shares will be available for sale in the public market, subject to certain volume and other restrictions, and subject to release mentioned above, as follows:

Days after the date of this prospectus	Number of shares eligible for sale	Comment
Date of Prospectus		Shares not locked up and eligible for sale under Rule 144
180 days		Lock-up released; shares eligible for sale under Rule 144
		Lock-up released; shares eligible for sale under Rule 144(k) or Rule 701

Rule 144

In general, under Rule 144, as currently in effect, a person who owns shares that were acquired from us or an affiliate of us at least one year prior to the proposed sale is entitled to sell upon expiration of the lock-up described above, within any three-month period beginning 90 days after the date of this prospectus, a number of shares that does not exceed the greater of:

•  1% of the number of shares of common stock then outstanding, which will equal approximately              shares immediately after this offering; or

•  the average weekly trading volume of the common stock on the Nasdaq National Market during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale.

Sales under Rule 144 are also subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us. Rule 144 also provides that our affiliates who sell shares of our common stock that are not restricted shares must nonetheless comply with the same restrictions applicable to restricted shares with the exception of the holding period requirement.

Rule 144(k)

Under Rule 144(k), a person who is not deemed to have been one of our affiliates for purposes of the Securities Act at any time during the 90 days preceding a sale and who has beneficially owned the shares proposed to be sold for at least two years, including the holding period of any prior owner other than an affiliate of us, is entitled to sell such shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144. Therefore, unless otherwise restricted, “144(k) shares” may be sold immediately upon the completion of this offering.

Rule 701

In general, under Rule 701 as currently in effect, any of our employees, consultants or advisors who purchase shares from us in connection with a compensatory stock or option plan or other written agreement will be eligible to resell such shares 90 days after the effective date of this offering in reliance on Rule 144, but without compliance with certain restrictions, including the holding period, contained in Rule 144.

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Registration of shares in connection with compensatory benefit plan

As of February 29, 2004, options to purchase 6,822,718 shares of common stock were issued and outstanding under our 1998 Stock Plan. In addition, 2,500,000 shares of common stock have been reserved for issuance under our 2004 Equity Incentive Plan, and 1,050,000 shares of common stock have been reserved for issuance under our 2004 Employee Stock Purchase Plan, both of which will be effective upon the completion of this offering.

Immediately after the completion of this offering, we intend to file a registration statement under the Securities Act covering shares of common stock issued or reserved for issuance under our stock option and employee stock purchase plans. This registration statement is expected to be filed and become effective as soon as practicable after the effective date of this offering. Accordingly, shares registered under this registration statement will, subject to vesting provisions and Rule 144 volume limitation, manner of sale, notice and public information requirements applicable to our affiliates, be available for sale in the open market immediately after the 180 day lock-up agreements expire.

Other registration rights

Certain of our stockholders are parties to an agreement that obligates us to register their shares of our capital stock after this offering in specified circumstances. See “Description of Capital Stock—Registration Rights” for additional information.

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Underwriting

J.P. Morgan Securities Inc. is acting as sole book running lead manager for this offering. J.P. Morgan Securities Inc. and Lehman Brothers Inc. are acting as joint lead managers for this offering.

We and the underwriters named below have entered into an underwriting agreement covering the common stock to be offered in this offering. J.P. Morgan Securities Inc., Lehman Brothers Inc. and Pacific Crest Securities Inc. are the representatives of the underwriters. Each underwriter has severally agreed to purchase the number of shares of common stock set forth opposite its name in the following table.

Name	Number of shares
J.P. Morgan Securities Inc.
Lehman Brothers Inc.
Pacific Crest Securities Inc.
Total

The underwriting agreement provides that the obligations of the underwriters are subject to certain conditions precedent, including the absence of any material adverse change in our business and the receipt of certain certificates, opinions and letters from us, our counsel and our independent auditors. The underwriters are committed to purchase all of the shares of the common stock offered by us, other than those shares covered by the over-allotment option described below, if they purchase any shares of common stock. No underwriter is obligated to take any shares allocated to a defaulting underwriter except under limited circumstances.

The underwriters are offering the shares of common stock subject to the prior sale of shares, and when, as and if such shares are delivered to and accepted by them. The underwriters will initially offer to sell shares to the public at the initial public offering price shown on the cover page of this prospectus. The underwriters may sell shares to securities dealers at a discount of up to $             per share from the initial public offering price. Any such securities dealers may resell shares to certain other brokers or dealers at a discount of up to $             per share from the initial public offering price. After the initial public offering, the underwriters may vary the public offering price and other selling terms.

If the underwriters sell more shares than the total number shown in the table above, the underwriters have the option to buy up to an additional                  shares of common stock from us to cover such sales. They may exercise this option during the 30-day period from the date of this prospectus. If any shares are purchased with this option, the underwriters will purchase shares in approximately the same proportions as shown in the table above.

The following table shows the per share and total underwriting discounts and commissions that we will pay to the underwriters. These amounts are shown assuming both no exercise and full exercise of the underwriters’ options to purchase additional shares.

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Underwriting discounts and commissions

	Without over-allotment exercise	With over-allotment exercise
Per share	$	$
Total	$	$

We estimate that the total expenses of this offering, excluding underwriting discounts and commissions, will be approximately $            .

The offering of the shares of common stock is made for delivery when, as and if accepted by the underwriters and subject to prior sale and to withdrawal, cancellation or modification of this offering without notice. The underwriters reserve the right to reject an order for the purchase of shares of common stock in whole or in part.

We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, and to contribute to payments the underwriters may be required to make in respect of these liabilities.

Persons participating in the offering may engage in transactions, including over-allotments, syndicate covering transactions, stabilizing bids, or imposition of penalty bids, that may have the effect of stabilizing or maintaining above, or otherwise affecting, the market price of shares of common stock at a level from that which might otherwise prevail in the open market.

A syndicate covering transaction is a bid for or the purchase of shares of common stock on behalf of the underwriters to reduce a syndicate short position incurred by the underwriters in connection with the offering. The underwriters may create a syndicate short position by making short sales of shares of common stock and may purchase shares of common stock on the open market to cover syndicate short positions created by short sales. Short sales involve the sale by the underwriters of a greater number of shares of common stock than they are required to purchase in this offering. Short sales can be either covered or naked. Covered short sales are sales made in an amount not greater than the underwriters’ over-allotment option to purchase additional shares from us in the offering. Naked short sales are sales in excess of the over-allotment option. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of shares of common stock in the open market after pricing that could adversely affect investors who purchase in this offering. If the underwriters create a syndicate short position, they may choose to reduce or cover this position by either exercising all or part of the over-allotment option to purchase additional shares of common stock from us or by engaging in syndicate covering transactions. The underwriters may close out any covered short position by either exercising their over-allotment option or purchasing securities in the open market. The underwriters must close out any naked short position by purchasing securities in the open market. In determining the source of shares of common stock to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase securities through the over-allotment option.

A stabilizing bid is a bid for or the purchase of shares of common stock on behalf of the underwriters for the purpose of fixing or maintaining the price of shares of common stock. A penalty bid is an arrangement that permits the representatives to reclaim the selling concession from an underwriter or a syndicate member for shares of common stock purchased by the

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underwriters in a syndicate covering transaction and therefore have not been effectively placed by the underwriter or syndicate member.

These transactions may be effected on the Nasdaq National Market or otherwise and, if commenced, may be discontinued at any time. Similar to other purchase activities, these activities may have the effect of preventing or retarding a decline in the market price of shares of common stock. As a result, the price of shares of common stock may be higher than the price that might otherwise exist in the open market.

One or more of the underwriters may facilitate the marketing of this offering online directly or through one of its affiliates. In those cases, prospective investors may view offering terms and a prospectus online and, depending upon the particular underwriter, place orders online or through their financial advisors.

We and our executive officers, directors and certain stockholders have agreed that, with limited exceptions, during the period beginning from the date of this prospectus and continuing to and including the date 180 days after the date of this prospectus, none of us will, directly or indirectly, offer, sell, offer to sell, contract to sell or otherwise dispose of any shares of common stock or any of our securities which are substantially similar to the common stock, including but not limited to any securities that are convertible into or exchangeable for, or that represent the right to receive, common stock or any such substantially similar securities or enter into any swap, option, future, forward or other agreement that transfers, in whole or in part, the economic consequence of ownership of common stock or any securities substantially similar to the common stock, other than pursuant to employee stock option plans existing on the date of this prospectus, without the prior written consent of J.P. Morgan Securities Inc.

It is expected that delivery of the shares will be made to investors on or about                  , 2004.

From time to time in the ordinary course of their respective businesses, some of the underwriters and their affiliates may in the future engage in commercial banking and/or investment banking transactions with us and our affiliates. The underwriters have informed us that they do not intend to confirm sales to discretionary accounts in excess of 5% of the total number of shares of common stock offered by them.

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Certain United States tax considerations for

non-United States holders

The following is a general discussion of material U.S. federal income and estate tax considerations with respect to the ownership and disposition of shares of our common stock applicable to non-U.S. holders. In general, a “non-U.S. holder” is any holder other than:

•  a citizen or resident of the United States;

•  a corporation created or organized in or under the laws of the United States or any political subdivision thereof;

•  an estate, the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or

•  a trust if (1) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in effect under applicable Treasury regulations to be treated as a United States person.

This discussion is based on current provisions of the Internal Revenue Code, final, temporary or proposed Treasury regulations promulgated thereunder, judicial opinions, published positions of the Internal Revenue Service and all other applicable authorities, all of which are subject to change (possibly with retroactive effect). We assume in this discussion that a non-U.S. holder holds shares of our common stock as a capital asset (generally property held for investment). This discussion does not address all aspects of U.S. federal income and estate taxation that may be important to a particular non-U.S. holder in light of that non-U.S. holder’s individual circumstances, nor does it address any aspects of U.S. state, local or non-U.S. taxes. This discussion also does not consider any specific facts or circumstances that may apply to a non-U.S. holder subject to special treatment under the U.S. federal income tax laws (such as partnerships, “controlled foreign corporations,” “passive foreign investments companies,” “foreign personal holding companies” and certain U.S. expatriates). Accordingly, we urge prospective investors to consult with their own tax advisors regarding the U.S. federal, state, local and non-U.S. income and other tax considerations of acquiring, holding and disposing of shares of our common stock.

If a partnership holds shares of our common stock, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. Any partner of a partnership holding shares of our common stock should consult its own tax advisors.

Dividends

In general, dividends we pay, if any, to a non-U.S. holder will be subject to U.S. withholding tax at a 30% rate of the gross amount. The withholding tax might not apply or might apply at a reduced rate under the terms of an applicable income tax treaty between the United States and the non-U.S. holder’s country of residence. A non-U.S. holder must demonstrate its entitlement to treaty benefits by certifying, among other things, its nonresident status. A non-U.S. holder generally can meet this certification requirement by providing an Internal Revenue Service Form W-8BEN or appropriate substitute form to us or our paying agent. Also, special rules apply if the dividends are effectively connected with a trade or business carried on by the non-U.S. holder within the United States and, if a treaty applies, are attributable to a permanent establishment of the non-U.S. holder within the United States. Dividends effectively connected with this U.S.

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trade or business, and, if a treaty applies, attributable to such a permanent establishment of a non-U.S. holder, generally will not be subject to U.S. withholding tax if the non-U.S. holder files certain forms, including Internal Revenue Service Form W-8ECI (or any successor form), with the payor of the dividend, and generally will be subject to U.S. federal income tax on a net income basis, in the same manner as if the non-U.S. holder were a resident of the United States. A non-U.S. holder that is a corporation may be subject to an additional “branch profits tax” at a rate of 30% (or a reduced rate as may be specified by an applicable income tax treaty) on the repatriation from the United States of its “effectively connected earnings and profits,” subject to certain adjustments. A non-U.S. holder of shares of our common stock eligible for a reduced rate of U.S. withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by filing an appropriate claim for refund with the Internal Revenue Service.

Gain on sale or other disposition of common stock

In general, a non-U.S. holder will not be subject to U.S. federal income tax on any gain realized upon the sale or other disposition of the holder’s shares of our common stock unless:

•  the gain is effectively connected with a trade or business carried on by the non-U.S. holder within the United States and, if required by an applicable income tax treaty as a condition to subjecting a non U.S. holder to United States income tax on a net basis, the gain is attributable to a permanent establishment of the non-U.S. holder maintained in the United States, in which case a non-U.S. holder will be subject to U.S. federal income tax on any gain realized upon the sale or other disposition on a net income basis, in the same manner as if the non-U.S. holder were a resident of the United States. Furthermore, the branch profits tax discussed above may also apply if the non-U.S. holder is a corporation;

•  the non-U.S. holder is an individual and is present in the United States for 183 days or more in the taxable year of disposition and certain other tests are met, in which case a non-U.S. holder will be subject to a flat 30% tax on any gain realized upon the sale or other disposition, which tax may be offset by United States source capital losses (even though the individual is not considered a resident of the United States);

•  the non-U.S. holder is subject to tax pursuant to the provisions of the Internal Revenue Code regarding the taxation of U.S. expatriates; or

•  we are or have been a U.S. real property holding corporation, or a USRPHC, for U.S. federal income tax purposes at any time within the shorter of the five-year period preceding the disposition and the non-U.S. holder’s holding period. We do not believe that we are or have been a USRPHC, and we do not anticipate becoming a USRPHC. If we have in the past or were to become a USRPHC at any time during this period, generally gains realized upon a disposition of shares of our common stock by a non-U.S. holder that did not directly or indirectly own more than 5% of our common stock during this period would not be subject to U.S. federal income tax, provided that our common stock is “regularly traded on an established securities market” (within the meaning of Section 897(c)(3) of the Internal Revenue Code). Our common stock will be treated as regularly traded on an established securities market during any period in which it is listed on a registered national securities exchange or any over-the-counter market, including the Nasdaq National Market.

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U.S. federal estate tax

Shares of our common stock that are owned or treated as owned by an individual who is not a citizen or resident (as defined for U.S. federal estate tax purposes) of the United States at the time of death will be includible in the individual’s gross estate for U.S. federal estate tax purposes, unless an applicable estate tax treaty provides otherwise, and therefore may be subject to U.S. federal estate tax.

Backup withholding, information reporting and other reporting requirements

Generally, we must report annually to the Internal Revenue Service the amount of dividends paid, the name and address of the recipient, and the amount, if any, of tax withheld. A similar report is sent to the holder. Pursuant to tax treaties or other agreements, the Internal Revenue Service may make its reports available to tax authorities in the recipient’s country of residence.

Payments of dividends or of proceeds on the disposition of stock made to a non-United States holder may be subject to backup withholding (currently at a rate of 28%) unless the non-United States holder establishes an exemption, for example by properly certifying its non-United States status on a Form W-8BEN or another appropriate version of Form W-8. Notwithstanding the foregoing, backup withholding may apply if either we or our paying agent has actual knowledge, or reason to know, that the holder is a United States person.

Backup withholding is not an additional tax. Rather, the United States income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained, provided that the required information is furnished to the Internal Revenue Service.

The foregoing discussion of certain U.S. federal income tax considerations is for general information only and is not tax advice. Accordingly, each prospective non-U.S. holder of shares of our common stock should consult his, her or its own tax adviser with respect to the federal, state, local and foreign tax consequences of the acquisition, ownership and disposition of common stock.

Legal matters

The validity of the shares of common stock offered by this prospectus and certain other legal matters are being passed upon for us by our counsel, Wilson Sonsini Goodrich & Rosati, Palo Alto, California. Davis Polk & Wardwell, Menlo Park, California is representing the underwriters of this offering.

Experts

Our consolidated financial statements as of January 31, 2003 and 2004 and for each of the three years in the period ended January 31, 2004 appearing in this prospectus and registration statement have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon appearing elsewhere herein and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

87

Where you can find additional information

We have filed with the Securities and Exchange Commission, or SEC, under the Securities Act of 1933, as amended, a registration statement on Form S-1 relating to the common stock to be sold in the offering. The registration statement, including the attached exhibits and schedules, contains additional relevant information about us and our capital stock. This prospectus does not contain all of the information set forth in the registration statement and the exhibits and schedules thereto. The rules and regulations of the SEC allow us to omit from this prospectus certain information included in the registration statement. For further information about us and our common stock, you should refer to the registration statement, including the exhibits and schedules filed with the registration statements. With respect to the statements contained in this prospectus regarding the contents of any agreement or any other document, in each instance, the statement is qualified in all respects by the complete text of the agreement or document, a copy of which has been filed as an exhibit to the registration statement. You may inspect a copy of the registration statement and the exhibits and schedules filed with the registration statement without charge at the Public Reference Room of the SEC at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. You may obtain copies of all or any part of the registration statement may be obtained from such offices at prescribed rates. You may also obtain information on the operation of the Public reference Room by calling the Securities and Exchange Commission at 1-800-SEC-0300. The SEC maintains an Internet site at http://www.sec.gov that contains reports, proxy and information statements and other information regarding issuers, including Brightmail, that file electronically with the SEC.

Upon completion of this offering, we will become subject to the information and periodic reporting requirements of the Securities Exchange Act of 1934, and, in accordance therewith, will file periodic reports, proxy statements and other information with the SEC. Such periodic reports, proxy statements and other information will be available for inspection and copying at the public reference room and website of the SEC referred to above. We maintain a website at www.brightmail.com. You may access our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, with the SEC free of charge at our website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. The reference to our web address does not constitute incorporation by reference of the information contained at this site.

88

Index to consolidated financial statements

	Page
Report of Ernst & Young LLP, independent auditors	F-1
Audited financial statements
Consolidated balance sheets	F-2
Consolidated statements of operations	F-3
Consolidated statements of convertible preferred stock and stockholders’ deficit	F-4
Consolidated statements of cash flows	F-5
Notes to consolidated financial statements	F-6

Report of Ernst & Young LLP, independent auditors

The Board of Directors and Stockholders

Brightmail Incorporated

We have audited the accompanying consolidated balance sheets of Brightmail Incorporated as of January 31, 2003 and January 31, 2004, and the related consolidated statements of operations, convertible preferred stock and stockholders’ deficit, and cash flows for each of the three years in the period ended January 31, 2004. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Brightmail Incorporated at January 31, 2003 and 2004, and the consolidated results of its operations and its cash flows for each of the three years in the period ended January 31, 2004, in conformity with accounting principles generally accepted in the United States.

/s/    Ernst & Young LLP

Sacramento, California

March 17, 2004,

except for note 10,

as to which the date

is March 21, 2004

F-1

Brightmail Incorporated consolidated balance sheets

	January 31,
(In thousands, except for share and per share data)	2003			2004			Pro forma 2004 (unaudited)
Assets
Current assets:
Cash and cash equivalents	$	10,740		$	12,781
Short-term investments		11,552			14,056
Short-term restricted cash		120			120
Accounts receivable (net of allowance for doubtful accounts of $58 in 2004)		4,577			8,879
Prepaid expenses and other current assets		183			863
Total current assets		27,172			36,699
Restricted cash		120			—
Equipment and furniture, net		1,091			2,106
Deposits and other assets		4			31
Total assets	$	28,387		$	38,836
Liabilities and stockholders’ equity (deficit)
Current liabilities:
Accounts payable and accrued liabilities	$	1,876		$	3,435
Deferred revenue		9,604			15,375
Current portion of borrowings under bank loan agreement		161			—
Current portion of capital lease obligations		225			—
Total current liabilities		11,866			18,810
Deferred revenue, net of current portion		329			2,331
Long term borrowings under bank loan agreement, less current portion		70			—
Capital lease obligations, less current portion		133			—
Total liabilities		12,398			21,141
Commitments and contingencies (Note 3)
Convertible preferred stock:
Series A, $0.001 par value; 2,889,962 shares authorized, issued and outstanding, zero pro forma (aggregate liquidation preference—$246)		246			246
Series B, $0.001 par value; 6,026,158 shares authorized; 5,952,824 shares issued and outstanding, zero pro forma (aggregate liquidation preference—$5,490)		5,446			5,446
Series C, $0.001 par value; 5,048,270 shares authorized; 5,020,364 shares issued and outstanding, zero pro forma (aggregate liquidation preference—$11,999)		12,020			12,020
Series D, $0.001 par value; 7,171,315 shares authorized; 7,076,225 shares issued and outstanding, zero pro forma (aggregate liquidation preference—$35,523)		35,498			35,498
Stockholders’ equity (deficit)
Common stock, $0.001 par value; 51,000,000 shares authorized; 5,880,261 and 6,005,006 shares issued and outstanding at January 31, 2003 and 2004, respectively, 26,944,381 pro forma		2,812			4,692		$	57,902
Deferred stock-based compensation		(32	)		(1,380	)		(1,380	)
Accumulated other comprehensive income		1			6			6
Accumulated deficit		(40,002	)		(38,833	)		(38,833	)
Total stockholders’ equity (deficit)		(37,221	)		(35,515	)	$	17,695
Total liabilities and stockholders’ equity (deficit)	$	28,387		$	38,836

See accompanying notes.

F-2

Brightmail Incorporated consolidated statements of operations

	For the year ended January 31,
(in thousands, except per share data)	2002			2003			2004
Revenues	$	6,428		$	12,184		$	26,046
Cost of revenues (1)(2)		3,025			3,561			5,548
Gross profit		3,403			8,623			20,498
Operating expenses (1):
Product development		6,575			6,393			7,432
Sales and marketing		5,361			4,292			8,004
General and administrative		2,627			3,032			3,550
Stock-based compensation		595			149			472
Total operating expenses		15,158			13,866			19,458
Operating income (loss)		(11,755	)		(5,243	)		1,040
Other income		—			5			36
Interest income		1,025			352			243
Interest expense		(114	)		(88	)		(38	)
Income (loss) before provision for income taxes		(10,844	)		(4,974	)		1,281
Provision for income taxes		—			—			(112	)
Net income (loss)	$	(10,844	)	$	(4,974	)	$	1,169
Net income (loss) per share:
Basic	$	(2.17	)	$	(0.87	)	$	0.20
Diluted	$	(2.17	)	$	(0.87	)	$	0.04
Pro forma (unaudited)							$	0.04
Weighted average number of shares used in per share amounts:
Basic		4,997			5,691			5,878
Diluted		4,997			5,691			30,499
Pro forma (unaudited)								30,499
(1)    Amounts included in stock-based compensation:
Cost of revenues	$	5		$	1		$	23
Product development		162			57			78
Sales and marketing		147			22			152
General and administrative		281			69			219
Total stock-based compensation	$	595		$	149		$	472
(2)    Related-party royalty expense included in cost of revenues	$	1,235		$	1,618		$	1,988

See accompanying notes.

F-3

Brightmail Incorporated consolidated statements of convertible preferred stock and stockholders’ deficit

	Convertible Preferred Stock				Common Stock					Deferred Stock- Based Compen- sation			Accumu- lated Deficit			Accumu- lated Other Compre- hensive Income (Loss)			Total Stock- holders’ Deficit
(in thousands)	Shares	Amount			Shares		Amount
Balances at January 31, 2001	20,939,375	$	53,224		5,469,103		$	2,892		$	(1,266	)	$	(24,184	)	$	—		$	(22,558	)
Issuance of common stock					123,422			14												14
Issuance of common stock to consultants and employees for services performed								28												28
Issuance of warrant in connection with bank line of credit arrangement			9																	—
Amendment of warrant in connection with subordinated note payable			(23	)																—
Repurchase of common stock					(667	)														—
Reversal of stock-based compensation for terminated employees								(353	)		353									—
Amortization of deferred stock-based compensation											595									595
Net loss														(10,844	)					(10,844	)
Cumulative translation adjustment																	6			6
Total comprehensive loss																				(10,838	)
Balances at January 31, 2002	20,939,375		53,210		5,591,858			2,581			(318	)		(35,028	)		6			(32,759	)
Issuance of common stock on exercise of stock options					294,486			125												125
Repurchase of common stock					(6,083	)														—
Reversal of stock-based compensation for terminated employees								(137	)		137									—
Amortization of deferred stock-based compensation											149									149
Other stock-based expense								243												243
Net loss														(4,974	)					(4,974	)
Cumulative translation adjustment																	(5	)		(5	)
Total comprehensive loss																				(4,979	)
Balances at January 31, 2003	20,939,375		53,210		5,880,261			2,812			(32	)		(40,002	)		1			(37,221	)
Issuance of common stock on exercise of stock options					124,745			60												60
Deferred stock compensation								1,863			(1,863	)								—
Reversal of stock-based compensation for terminated employees								(43	)		25									(18	)
Amortization of deferred stock-based compensation											490									490
Net income														1,169						1,169
Cumulative translation adjustment																	5			5
Total comprehensive loss																				1,174
Balances at January 31, 2004	20,939,375	$	53,210		6,005,006		$	4,692		$	(1,380	)	$	(38,833	)	$	6		$	(35,515	)

See accompanying notes.

F-4

Brightmail Incorporated consolidated statements of cash flows

	Year ended January 31,
(in thousands)	2002			2003			2004
Operating activities
Net income (loss)	$	(10,844	)	$	(4,974	)	$	1,169
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		739			677			806
Stock-based compensation		595			149			472
Other stock-based expenses		28			243			—
Changes in operating assets and liabilities:
Accounts receivable		(298	)		(3,176	)		(4,302	)
Prepaid expenses and other current assets		82			(94	)		(680	)
Other assets		—			—			(30	)
Accounts payable and accrued liabilities		1,127			(235	)		1,559
Deferred revenue		1,975			6,923			7,773
Net cash provided by (used in) operating activities		(6,596	)		(487	)		6,767
Investing activities
Purchases of equipment and furniture		(280	)		(660	)		(1,818	)
Purchase of held-to-maturity investments		(56,218	)		(14,383	)		(12,497	)
Maturities of held-to-maturity investments		67,987			3,172			9,993
Net cash provided by (used in) investing activities		11,489			(11,871	)		(4,322	)
Financing activities
(Increase) decrease in restricted cash		(360	)		120			120
Borrowings under bank loan		268			124			—
Repayments under bank loan		(33	)		(128	)		(231	)
Repayment of capital lease obligations		(207	)		(227	)		(358	)
Proceeds from issuance of common stock		14			125			60
Net cash provided by (used in) financing activities		(318	)		14			(409	)
Effect of exchange rate changes on cash and cash equivalents		6			(5	)		5
Increase (decrease) in cash and cash equivalents		4,581			(12,349	)		2,041
Cash and cash equivalents at beginning of year		18,508			23,089			10,740
Cash and cash equivalents at end of year	$	23,089		$	10,740		$	12,781
Supplemental disclosure of noncash investing and financing activities
Capital lease obligations incurred	$	14		$	—		$	—
Cash paid for interest	$	88		$	85		$	35

See accompanying notes.

F-5

Brightmail Incorporated Notes to consolidated financial statements

1. Summary of significant accounting policies

Description of business and basis of presentation

Brightmail Incorporated, (“Brightmail” or the “Company”), was incorporated on February 27, 1998 as a California corporation. The Company is a provider of electronic messaging security software and services to enterprises and messaging service providers worldwide. Brightmail B.V., a limited liability company, was formed on May 23, 2001 and organized under the laws of the Netherlands as a wholly-owned subsidiary of Brightmail. Brightmail Pty Limited, a Company Limited by Shares, was formed on October 23, 2003, and organized under the laws of Australia as a wholly-owned subsidiary of Brightmail. Brightmail Limited, a Private Limited Company, was formed on November 12, 2003, and organized under the laws of England as a wholly-owned subsidiary of Brightmail. Brightmail Incorporated has maintained an Ireland branch office which was registered on February 13, 2003 with the Ireland Companies Registration Office.

The Company operates in one segment, which is the electronic messaging security market.

Unaudited pro forma stockholders’ equity

If the offering contemplated by this prospectus is consummated and the criteria described in note 4 are met, all of the convertible preferred stock outstanding will convert into 20,939,375 shares of common stock based on the shares of convertible preferred stock outstanding at January 31, 2004. Unaudited pro forma stockholders’ equity as adjusted for the assumed conversion of the convertible preferred stock, is set forth on the consolidated balance sheet.

Use of estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates.

Principles of consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances have been eliminated.

Foreign currency translation

The assets and liabilities of foreign subsidiaries are translated from their respective functional currencies into U.S. dollars at the current exchange rate at the end of each reporting period. Revenues and expenses are translated at the average exchange rate prevailing during the period. The functional currency of the Company’s subsidiaries is the local currency. Gains and losses resulting from the translation of the financial statements of the foreign subsidiaries are reported as a separate component of stockholders’ equity. Net gains and losses resulting from foreign exchange transactions, which are included in other income, were not material in any of the periods presented.

F-6

Concentrations of credit risk and credit risk evaluations

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, short-term investments and accounts receivable. Cash, cash equivalents and short-term investments are deposited with high-credit quality financial institutions. The Company has not experienced any significant losses on its cash, cash equivalents or short-term investments. The Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral. Losses on accounts receivable have been insignificant to date.

The Company conducts business with companies in various industries primarily in the United States. For the years ended January 31, 2002, 2003, and 2004, revenues from major customers were as follows:

	Year ended January 31,
	2002	2003	2004
Customer A	12%	17%	18%
Customer B	14%	12%	8%
Customer C	15%	13%	9%
Customer D	19%	10%	5%

At January 31, 2003 and 2004, the following table represents the percent of accounts receivable outstanding as follows:

	Year ended January 31,
	2003	2004
Customer A	19%	3%
Customer E	—	17%
Customer F	—	11%

Cash, cash equivalents and short-term investments

The Company considers all cash and highly liquid investments purchased with an original maturity of less than three months at the date of purchase to be cash equivalents. The Company considers investments with maturities of more than ninety days but less than one year to be short-term investments. The Company has classified all cash equivalents and short-term investments as held to maturity as the Company has the intent and ability to hold these investments to maturity. Cash equivalents and short-term investments are recorded at amortized cost, which approximates fair value. Fair value is determined based on quoted market prices. Short-term investments consist primarily of high quality, investment grade, corporate and municipal interest bearing securities. Substantially all of the Company’s cash, cash equivalents and short-term investments are custodied with two major domestic financial institutions.

F-7

The following table presents the estimated fair value of our cash and short-term investments by investment grade (in thousands):

	January 31,
	2003		2004
Cash	$	6,159	$	10,516
Institutional money market funds		4,581		2,265
Amounts included in cash and cash equivalents		10,740		12,781
U.S. government agencies		6,528		6,152
Corporate securities		2,748		4,927
Tax-exempt auction rate notes		2,276		2,977
Amounts included in short-term investments		11,552		14,056
Total cash, cash equivalents and short-term investments	$	22,292	$	26,837

Unrealized gains (losses) on all securities were not significant as of January 31, 2003 and 2004.

Accounts receivable and allowance for doubtful accounts

Accounts receivable are comprised of billed receivables arising from recognized or deferred revenues. The Company’s receivables are unsecured. The Company maintains an allowance for doubtful accounts at an amount it estimates to be sufficient to provide adequate protection against losses resulting from collecting less than full payment on its receivables. Estimated reserves are determined based upon the number of days that billings are past due and an evaluation of the potential risk of loss associated with specific problem accounts.

Fair value of financial instruments

The carrying amounts of the Company’s financial instruments, which include cash and cash equivalents, short-term marketable securities, restricted cash, accounts receivable, accounts payable, and other accrued expenses, approximate their fair values due to their short maturities.

Equipment and furniture

Equipment and furniture are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, which range from two to five years. Maintenance and repairs that do not extend the life or improve the asset are expensed in the year incurred. Leasehold improvements are amortized over the shorter of the useful life or remaining lease term.

Impairment of long-lived assets

The Company evaluates the recoverability of its long-lived assets in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS 144”). Long-lived assets are reviewed for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. If such review indicates that the carrying amount of long-lived assets is not recoverable, the carrying amount of such assets is reduced to fair value.

F-8

Software development costs

The Company accounts for the development cost of software incorporated into the Company’s products in accordance with Statement of Financial Accounting Standards No. 86, Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed, (“SFAS 86”). SFAS 86 requires product development costs to be charged to expense as incurred until technological feasibility is attained. With respect to the Company’s software development process, technological feasibility is established upon completion of a working model. To date, the Company’s products have been released shortly after reaching technological feasibility. Therefore, development costs incurred after completion of a working model and prior to general release have not been significant. Accordingly, from its inception through January 31, 2004, the Company has not capitalized any software development costs.

Accumulated other comprehensive income (loss)

Accumulated other comprehensive income (loss) consists solely of cumulative foreign currency translation adjustments resulting from the translation of the financial statements of the foreign subsidiaries.

Accounting for stock-based compensation

The Company accounts for compensation expense for its stock-based employee compensation plan using the intrinsic value method prescribed in Accounting Principles Board Opinion (“APB”) No. 25, Accounting for Stock Issued to Employees (“APB 25”), and complies with the disclosure provisions of SFAS No. 123, Accounting for Stock-Based Compensation (“SFAS 123”), and SFAS No. 148, Accounting for Stock-Based Compensation—Transition and Disclosure (“SFAS 148”). Under APB 25, compensation expense of fixed stock options is based on the difference, if any, on the date of the grant between the deemed fair value of the Company’s stock and the exercise price of the option. Compensation expense is recognized on an accelerated basis over the option- vesting period of four years. The Company accounts for stock issued to nonemployees in accordance with the provisions of SFAS 123 and EITF Issue No. 96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services (“EITF 96-18”).

SFAS 123 requires pro forma disclosure of net income as if the Company had accounted for its stock-based awards to employees under the alternative fair value method, which requires the use of option valuation models. For pro forma purposes, the estimated fair value of the Company’s stock-based awards to employees is amortized ratably over the option-vesting period.

The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing valuation model with the following assumptions for options granted during the year as follows:

	Year ended January 31,
	2002	2003	2004
Volatility	100%	100%	100%
Expected dividend yield	0%	0%	0%
Risk-free interest rate	4.00%	1.50%	3.17%
Expected life (years)	5	5	5

F-9

Had the company recorded compensation expense for options granted for the years ended January 31, 2002, 2003 and 2004 using the fair value method, the Company’s net loss would have changed to the pro forma amounts as follows (in thousands, except per share data):

	Year ended January 31,
	2002			2003			2004
Net income (loss), as reported	$	(10,844	)	$	(4,974	)	$	1,169
Add: Stock-based employee compensation included in reported net income (loss)		595			149			472
Deduct: Stock-based employee compensation expense determined under the fair value method		(808	)		(902	)		(1,145	)
Net income (loss), pro forma	$	(11,057	)	$	(5,727	)	$	496
Net income (loss), per share
Basic:
As reported	$	(2.17	)	$	(0.87	)	$	0.20
Pro forma	$	(2.21	)	$	(1.01	)	$	0.08
Diluted:
As reported	$	(2.17	)	$	(0.87	)	$	0.04
Pro forma	$	(2.21	)	$	(1.01	)	$	0.02

The weighted-average deemed fair value at the grant date of options granted during the year ended January 31, 2002, 2003 and 2004 was $0.61, $0.60 and $2.24 per share, respectively.

The per share weighted-average deemed fair value of options granted are as follows:

	Year ended January 31,
	2002		2003		2004
Weighted-average fair value per share:
Options granted below fair value		—		—	$	2.38
Options granted equal to fair value	$	0.61	$	0.60	$	0.61
Weighted-average exercise price per share:
Options granted below fair value	$	—	$	—	$	0.81
Options granted equal to fair value	$	0.80	$	0.80	$	0.80

Net income (loss) per share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding for the fiscal period. Diluted net income (loss) per share is computed giving effect to all potentially dilutive common stock, options, warrants (using the treasury stock method) and convertible preferred stock.

F-10

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net income (loss) per share is as follows (in thousands):

	Year ended January 31,
	2002			2003			2004
Numerator:
Net income (loss)	$	(10,844	)	$	(4,974	)	$	1,169
Denominator:
Weighted-average shares outstanding for basic income (loss) per share, net of weighted average shares of common stock subject to repurchase		4,997			5,691			5,878
Effect of dilutive securities:
Employee stock options and warrants		—			—			3,682
Convertible preferred stock		—			—			20,939
Adjusted weighted-average shares outstanding and assumed conversions for diluted income (loss) per share		4,997			5,691			30,499

The following common share equivalents were excluded from the computation of diluted earnings per share as they had an anti-dilutive impact (in thousands):

	Year ended January 31,
	2002	2003	2004
Convertible preferred stock	20,939	20,939	—
Options	1,538	743	—
Warrants	73	73	24

Income taxes

The Company uses the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the financial statement and tax basis of assets and liabilities and net operating loss and credit carryforwards using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized.

Revenue recognition

The Company recognizes revenue pursuant to the requirements of Statement of Position 97-2 “Software Revenue Recognition” (SOP 97-2), issued by the American Institute of Certified Public Accountants, as amended by SOP 98-9 Modification of SOP 97-2, Software Revenue Recognition, With Respect to Certain Transactions.

The Company sells its products and services on a subscription basis. The subscription contracts are typically non-cancelable with a term of 12 to 24 months. Because the support component of the Company’s products require continuous delivery and is not separable from the product, the

F-11

Company recognizes revenues from subscription contracts ratably over the term of the contracts. The Company generates substantially all of its revenue from two products. In accordance with SOP 97-2, the Company begins to recognize revenue from the licensing and support of its products when all of the following criteria are met: (1) the Company has entered into a legally binding agreement with a customer; (2) the Company delivers the products; (3) subscription agreement terms are deemed fixed or determinable; and (4) collection is probable.

Customers are generally invoiced in advance, either bi-annually, annually or quarterly. Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue, and are amortized into revenue ratably over the term of the subscription contract as described above. The Company’s subscription contracts do not contain general rights of return.

Revenue from sales made through indirect sales channels are recognized as the product and support are delivered to the end users provided that all four of the SOP 97-2 revenue recognition criteria noted above are met. This is commonly referred to as the sell-through method.

When a subscription contract includes an acceptance provision, the Company does not recognize revenue until the earlier of the receipt of a written customer acceptance or, if not notified by the customer to cancel the subscription contract, the expiration of the acceptance period.

Advertising costs and sales commissions

The Company expenses the costs of advertising as incurred. Advertising expense for the year ended January 31, 2002, 2003 and 2004 was $791,000, $10,000 and $438,000, respectively.

Sales commissions are expensed in the period in which the related subscription contract is executed.

Warranties and indemnification

The Company offers a limited warranty for product and service sales that generally provide the customer a ninety-day warranty period against defects. To date, the Company has not incurred any material costs as a result of such warranties and has not accrued any liabilities related to such obligations in the accompanying consolidated financial statements.

The Company’s subscription contracts generally include certain provisions for indemnifying customers against liabilities if its product or services infringe a third-party’s intellectual property rights. To date, the Company has not incurred any material costs as a result of such indemnifications and has not accrued any liabilities related to such obligations in the accompanying consolidated financial statements.

Recently issued accounting pronouncements

In January 2003 the Financial Accounting Standards Board issued FASB Interpretation 46, “Consolidation of Variable Interest Entities”. The interpretation defines variable interest entities as those in which equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties, or entities in which equity investors lack certain essential characteristics of a controlling financial interest. The primary beneficiary of a variable interest entity is the party that absorbs a majority of the entity’s expected losses, receives a majority of its expected residual returns, or both, as a result of holding

F-12

variable interests, which are the ownership, contractual, or other pecuniary interests in an entity. The primary beneficiary is required to consolidate the financial position and results of operations of the variable interest entity. In December 2003, the Financial Accounting Standards Board, issued revisions to FASB Interpretation 46, resulting in multiple effective dates based on the characteristics as well as the creation dates of the variable interest entities, however with no effective date later than the Company’s first quarter of 2005. The Company does not believe that adoption of this statement will have a material effect on its consolidated financial statements.

In December 2004, the Securities and Exchange Commission issued Staff Accounting Bulleting No. 104 “Revenue Recognition” (SAB 104), which updates and summarizes the Commissions views on the application of generally accepted accounting principles to revenue recognition in financial statements. The Company believes that its revenue recognition policies conform to the requirements of SAB 104.

2. Equipment and furniture

Equipment and furniture consist of the following (in thousands):

	January 31,
	2003			2004
Computer equipment	$	2,431		$	4,120
Furniture and office equipment		419			419
Purchased software		258			387
Leasehold improvements		155			155
		3,263			5,081
Less accumulated depreciation and amortization		(2,172	)		(2,975	)
Equipment and furniture, net	$	1,091		$	2,106

Computer equipment includes $957,000 of cost and $925,000 and $957,000 of accumulated amortization related to assets held under capital leases at January 31, 2003 and 2004, respectively.

3. Commitments and contingencies

The Company entered into a lease financing arrangement with an equipment vendor in December 1998 that provided for capital equipment lease financing of up to $1 million through June 2000. As part of the leasing arrangement, the Company issued a warrant to purchase 20,000 shares of the Company’s Series B convertible preferred stock. This arrangement was extended to September 7, 2000. Outstanding advances accrue interest at 7% per annum and payment of principal and interest are due in monthly installments over 48 months. There were no future minimum lease payments under capital leases as of January 31, 2004.

The Company leases its office facility under a noncancelable operating lease with an initial term that expires in December 2004. Rent expense under operating leases amounted to approximately $1,092,000, $1,113,000 and $1,239,000 for the years ended January 31, 2002, 2003 and 2004, respectively.

F-13

Future minimum lease payments, net of minimum sublease obligations of $182,000, for 2005 under noncancelable operating leases having initial terms in excess of one year as of January 31, 2004 are as follows (in thousands):

	Operating Leases
Year ending January 31,
2005	$	909
2006		25
2007		15
Total minimum lease payments	$	949

On October 16, 2001, in connection with the leasing of the Company’s primary premises, the Company entered into a one-year letter of credit agreement for $480,000 with a financial institution. The letter of credit will automatically renew for consecutive one-year periods and will expire on February 28, 2005. The letter of credit decreases in value by $120,000 each January 1 through January 1, 2005. As security for this letter of credit, the Company opened a restricted cash account at the issuing institution for $480,000. The restricted account has a balance of $120,000 as of January 31, 2004. The restricted funds are to be reduced in concert with reductions in the value of the letter of credit.

4. Stockholders’ equity

Convertible preferred stock

Each share of Series A, Series B, Series C and Series D convertible preferred stock is convertible at the option of the holder into shares of common stock as determined by the applicable conversion rate specified in the Company’s amended and restated articles of incorporation, subject to certain antidilution provisions. Currently, each share of outstanding convertible preferred stock is convertible into one share of the Company’s common stock. In addition, each share of a series of convertible preferred stock will automatically be converted into shares of common stock at the then-applicable conversion rate at the earlier of: (1) the affirmative election of the holders of a majority of the then-outstanding shares of that series of convertible preferred stock, voting as separate series; or (2) upon the closing of a firm commitment underwritten public offering of the Company’s common stock with aggregate gross proceeds of at least $20,000,000 and a per share price of (a) at least $3.585 in the case of the Series A, Series B and Series C convertible preferred stock and (b) at least $10.04 in the case of the Series D convertible preferred stock. Each share of convertible preferred stock is entitled to the number of votes equal to the number of shares of common stock into which each share of the convertible preferred stock is convertible.

The holders of Series A, Series B, Series C and Series D convertible preferred stock are entitled to receive, when and if declared by the Board of Directors, noncumulative dividends at the rate of 8% of the original issue price per annum on each outstanding share of Series A, Series B, Series C and Series D convertible preferred stock. The effective original issue prices of Series A, Series B, Series C and Series D preferred stock were $0.085, $0.92, $2.39 and $5.02 per share, respectively. No dividends have been declared to date.

In the event of the sale, liquidation, dissolution or winding up of the Company, whether voluntary or involuntary (including upon the occurrence of certain change of control events), the holders of Series A, Series B, Series C and Series D convertible preferred stock are entitled to

F-14

receive, prior to and in preference of any distribution of any of the assets of the Company to the holders of common stock, an amount per share equal to the sum of the original issue price for each share, plus all declared and unpaid dividends with respect to such shares. If the assets are insufficient to make payments in full to all holders of preferred stock, assets will be distributed ratably among the holders of convertible preferred stock in proportion to the preferential amount each such holder is otherwise entitled to receive. After payment in full of the initial liquidation preference, any remaining assets will be distributed ratably among the holders of Series A, Series B, Series C and Series D preferred stock and common stock on an as-if converted basis until the aggregate distributions to holders of Series A, Series B, Series C and Series D preferred stock (including preferential distribution) equal $0.255, $2.77, $7.17 and $10.04 per share, respectively. Any remaining assets will be distributed on a pro rata basis to the holders of common stock.

Warrants

In December 1998, in connection with the equipment lease financing arrangement described in Note 3, the Company issued a warrant to purchase 20,000 shares of the Company’s Series B convertible preferred stock at an exercise price of $1.50 per share. The warrant is exercisable through December 2008 or five years from the effective date of an initial public offering, whichever is earlier.

In December 1998, the Company issued a warrant to purchase 13,334 shares of the Company’s Series B convertible preferred stock at an exercise price of $1.50 per share. This warrant expires in December 2005.

In July 1999, the Company issued a warrant to purchase 39,652 shares of the Company’s Series C convertible preferred stock at an exercise price of $2.27 per share. This warrant expires in July 2009 or five years from the effective date of an initial public offering, whichever is earlier. Due to the early termination of a note payable, the aforementioned warrant was amended to provide for the purchase of 15,861 shares. The modification of the warrant resulted in a reduction to prepaid interest expense and Series C convertible preferred stock of $23,000 in the third quarter of fiscal 2002.

In June 2000, the Company issued a warrant to purchase 19,920 shares of the Company’s Series D convertible preferred stock at an exercise price of $5.02 per share. This warrant expires in December 2005, or on the second anniversary of the effective date of an initial public offering, if such effective date occurs within 2 years prior to December 2005.

In August 2001, the Company issued a warrant to purchase 3,984 shares of Series D convertible preferred stock at an exercise price of $5.02 per share. This warrant expires in August 2006.

In the event of an initial public offering and the conversion of preferred stock into common stock, all warrants will be converted into warrants to purchase common stock.

Stock option plan

In April 1998, the Company adopted the 1998 Stock Option Plan (the “Plan”), as amended, under which 9,909,974 shares of common stock are reserved for the issuance of incentive stock options (“ISOs”) or nonstatutory stock options (“NSOs”) to employees, officers, directors and consultants. The ISOs may be granted at a price per share not less than 100% (110% if granted to holders of

F-15

10% or more of the Company’s stock) of the fair market value on the date of the grant. The NSOs may be granted at a price per share not less than 85% (110% if granted to holders of 10% or more of the Company’s stock) of the fair market value at the date of grant. Options granted under the Plan are exercisable over a maximum term of ten years from the date of grant and generally vest over a four-year period. Options may be immediately exercised, but unvested shares are subject to repurchase by the Company at the original issuance price if the holder is no longer employed or is no longer providing services to the Company. Options generally vest 25% one year after the date of grant and then ratably over the remaining vesting period, subject to acceleration upon certain events.

A summary of the Company’s stock option activity under the Plan is set forth below:

	Number of Shares		Exercise Price	Weighted- Average Exercise Price per Share
Outstanding at January 31, 2001	3,929,157		$0.005 to $0.80	$	0.46
Granted	1,184,593		$0.80	$	0.80
Exercised	(122,755	)	$0.005 to $0.80	$	0.27
Canceled	(965,504	)	$0.005 to $0.80	$	0.47
Outstanding at January 31, 2002	4,025,491		$0.05 to $0.80	$	0.56
Granted	4,091,401		$0.80	$	0.80
Exercised	(288,403	)	$  0.01 to $0.80	$	0.44
Canceled	(2,368,078	)	$  0.01 to $0.80	$	0.57
Outstanding at January 31, 2003	5,460,411		$0.05 to $0.80	$	0.74
Granted	1,071,228		$  0.80 to $0.95	$	0.81
Exercised	(124,745	)	$  0.01 to $0.80	$	0.49
Canceled	(255,710	)	$  0.24 to $0.80	$	0.67
Outstanding at January 31, 2004	6,151,184		$0.05 to $0.95	$	0.76

At January 31, 2004, options to purchase 2,622,203 shares of common stock were vested, and all outstanding options were exercisable. A total of 30,909 shares of common stock issued pursuant to exercises of stock options were subject to repurchase at January 31, 2004. At January 31, 2004, the weighted-average remaining contractual life of outstanding stock options is 8.48 years.

In February 2002, in connection with the resignation of a key employee, the Company’s Board of Directors approved an extension of the exercise and vesting terms for stock options held by that key employee, resulting in a charge of $243,000.

The Company recorded $1,863,000 of deferred stock-based compensation during the year ended January 31, 2004. The Company recorded no deferred stock-based compensation for the years ended January 31, 2003 or 2002. All amounts recorded as deferred stock-based compensation representing the difference between the exercise price and the deemed fair value of certain of the Company’s stock options granted to employees are being amortized by charges to operations on an accelerated vesting method over the vesting periods of the individual stock options. Such amortization amounted to $595,000, $149,000, and $490,000 for the years ended January 31, 2002, 2003 and 2004, respectively.

F-16

Shares reserved for future issuance

At January 31, 2004, the Company has reserved shares of common stock for future issuance as follows:

Convertible preferred stock	20,939,375
Stock options outstanding	6,151,184
Stock options available for grant	2,015,465
Warrants to purchase convertible preferred stock	73,099
	29,179,123

5. Income taxes

The domestic and foreign components of income (loss) before the provision for income taxes were as follows (in thousands):

	Year ended January 31,
	2002			2003			2004
Domestic	$	(10,257	)	$	(4,340	)	$	(48	)
Foreign		(587	)		(634	)		1,329
	$	(10,844	)	$	(4,974	)	$	1,281

The provision for income taxes is as follows (in thousands):

	Year ended January 31, 2004
Current:
Federal	$	50
State		29
Foreign		33
	$	112

A reconciliation of income taxes at the statutory federal income tax rate to net income taxes included in the accompanying statements of operations is as follows (in thousands):

	Year ended January 31,
	2002			2003			2004
U.S. federal taxes (benefit) at statutory rate	$	(3,687	)	$	(1,691	)	$	436
State taxes, net of federal benefit		(633	)		(290	)		75
Tax credits		(191	)		(286	)		(570	)
Change in valuation allowance		4,196			1,979			378
Foreign tax rate differential		200			216			(416	)
Permanent Items		115			72			209
	$	—		$	—		$	112

F-17

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows (in thousands):

	Year ended January 31,
	2002			2003			2004
Net operating loss carryforwards	$	10,996		$	12,972		$	12,506
Research and development credit carryforwards		449			716			1,202
Other temporary differences		2,106			1,013			1,393
Total deferred tax assets		13,551			14,701			15,101
Valuation allowance		(13,551	)		(14,701	)		(15,101	)
Net deferred tax assets	$	—		$	—		$	—

The valuation allowance increased by $4,196,000, $1,150,000 and $400,000 in 2002, 2003 and 2004, respectively.

At January 31, 2004, the Company has net operating loss carryforwards of approximately $32,495,000 for federal income tax purposes and $25,488,000 for state net operating loss carryforwards available to offset future taxable income, which will begin to expire in 2018 for federal and 2006 for state tax purposes, respectively. Under the Tax Reform Act of 1986, the amounts of and benefits from net operating loss carryforwards may be impaired or limited in certain circumstances. Events which cause limitations in the amount of net operating losses that the company may utilize in any one year include, but are not limited to, a cumulative ownership change of more than 50%, as defined, over a three year period. Such an annual limitation could result in the expiration of the net operating loss carryforwards before utilization. Accordingly, our net deferred tax assets have been fully offset by a valuation allowance.

Approximately $808,000 and $602,000 of research and development credits are carried forward to future years respectively for federal and California income tax purposes. The federal R&D credit will begin to expire in 2018. The California R&D credit may be carried forward indefinitely.

Applicable U.S. income taxes have not been provided on approximately $73,000 of undistributed earnings of foreign subsidiaries as of January 31, 2004 since these earnings are considered indefinitely reinvested. The tax liability that would arise if these earnings were remitted is approximately $7,000.

6. Geographic information

Revenues from customers outside the Americas for the years ended January 31, 2002, 2003 and 2004, were 2 percent, 8 percent and 14 percent, respectively, of total revenues. Revenues from customers by geographical region are as follows (in thousands):

	Year ended January 31,
	2002		2003		2004
Americas	$	6,323	$	11,183	$	22,445
Europe, Middle East and Africa		105		767		2,968
Asia Pacific		—		234		633
	$	6,428	$	12,184	$	26,046

F-18

The Company operates in a single operating segment as defined by SFAS 131, and considers all of its products and services to be within the same reporting group.

Substantially all of the Company’s long-lived assets are located in the United States.

7. 401(k) plan

In January 1999, the Company adopted a 401(k) plan for its employees, whereby currently eligible employees may contribute up to a specified percentage of their earnings, on a pre-tax basis, subject to the maximum amount permitted by the Internal Revenue Code. Under the 401(k) plan, the Company may make discretionary contributions. No Company contributions were made during the years ended January 31, 2002, 2003 and 2004.

8. Related-party transaction

The Company has a license and royalty agreement under which it resells a complimentary product owned by a significant stockholder. Amounts charged to royalty expense, included in cost of revenue, under this agreement were $1,235,000, $1,618,000 and $1,988,000, for the years ended January 31, 2002, 2003 and 2004, respectively. Royalties paid to the significant stockholder are calculated generally based on the number of users subscribing to the anti-virus service. Revenue from our anti-virus service and related royalty expenses are reported on a gross basis in accordance with EITF 99-19: Reporting Revenue Gross as a Principal versus Net as an Agent. At January 31, 2004, the Company owed $33,000 to the significant stockholder.

9. Unaudited pro forma net income per share

Pro forma net income per share has been computed to give effect to the conversion of the convertible preferred stock that will convert into common stock upon the closing of the Company’s initial public offering if the criteria described in note 4 are met, for the fiscal year ended January 31, 2004. A reconciliation of the numerator and denominator used in the calculation of pro forma net income per share is as follows (in thousands):

	Year ended January 31,
	2004
Numerator:
Net income	$	1,169
Denominator:
Weighted-average shares outstanding		5,878
Adjustments to reflect the assumed conversion of the convertible preferred stock from date of issuance		20,939
Effect of dilutive securities—employee stock options and warrants		3,682
Weighted-average shares used in computing diluted pro forma net income per share		30,499

The Company excluded warrants exercisable for 23,904 shares of common stock from its computation of pro forma net income per share for the year ended January 31, 2004 as these securities had an anti-dilutive impact.

F-19

10. Subsequent events

On March 21, 2004, the Board of Directors authorized the filing of a registration statement with the Securities and Exchange Commission for an initial public offering of the Company’s common stock and the Company’s reincorporation into Delaware. Additionally, the Board of Directors approved the 2004 Equity Incentive Plan and the 2004 Employee Stock Purchase Plan, both of which are subject to shareholder approval and will be effective upon the closing of the initial public offering.

F-20

             shares

Common stock

Prospectus

JPMorgan Lehman Brothers

Pacific Crest Securities

                , 2004

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. We are offering to sell, and seeking offers to buy, common shares only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common shares.

No action is being taken in any jurisdiction outside the United States to permit a public offering of the common shares or possession or distribution of this prospectus in that jurisdiction. Persons who come into possession of this prospectus in jurisdictions outside the United States are required to inform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus applicable to that jurisdiction.

Until                 , 2004, all dealers that buy, sell or trade in our common shares, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

Part II

Information not required in prospectus

Item 13. Other Expenses of Issuance and Distribution

The following table sets forth the expenses, other than underwriting discounts and commissions, payable by the registrant in connection with the sale of common stock being registered. All amounts are estimates except the registration fee, the NASD filing fee, and the Nasdaq National Market listing fee.

	Amount To Be Paid
SEC registration fee	$	10,136
NASD filing fee		8,500
NASDAQ listing fee		*
Printing and engraving expenses		*
Legal fees and expenses		*
Accounting fees and expenses		*
Blue sky fees and expenses		*
Transfer agent and registrar fees		*
Miscellaneous		*
Total	$

* To be filed by amendment.

Item 14. Indemnification of Directors and Officers

Section 145 of the Delaware General Corporation Law authorizes a court to award, or a corporation’s board of directors to grant, indemnity to officers, directors and other corporate agents in terms sufficiently broad to permit such indemnification under certain circumstances and subject to certain limitations.

The registrant’s certificate of incorporation and bylaws provide that the registrant shall indemnify its directors, officers, employees and agents to the full extent permitted by Delaware General Corporation Law, including in circumstances in which indemnification is otherwise discretionary under Delaware law.

In addition, the registrant has entered into separate indemnification agreements with its directors, officers which require the registrant, among other things, to indemnify them against expenses, judgments, fines, settlements, and other amounts and certain liabilities (including with respect to a derivative action) in connection with any proceeding, whether actual or threatened, which may arise by reason of their status as directors, officers or certain other employees. This indemnification obligation is conditioned on such person to have acted in good faith and in a manner such person reasonably believed to be in, or not opposed to, the best interests of the registrant. The indemnification agreements also set forth certain procedures that will apply in the event of a claim for indemnification thereunder. At present, no litigation or proceeding is pending that involves a director or officer of the registrant regarding which indemnification is sought, nor is the registrant aware of any threatened litigation that may result in claims for indemnification.

II-1

The registrant maintains a directors’ and officers’ insurance policy. The policy insures directors and officers against unindemnified losses arising from certain wrongful acts in their capacities as directors and officers and reimburses the registrant for those losses for which the registrant has lawfully indemnified the directors and officers. The policy contains various exclusions, none of which apply to this offering.

These indemnification provisions and the indemnification agreements entered into between the registrant and its officers and directors may be sufficiently broad to permit indemnification of the registrant’s officers and directors for liabilities (including reimbursement of expenses incurred) arising under the Securities Act of 1933, as amended.

The underwriting agreement filed as Exhibit 1.1 to this registration statement provides for indemnification by the underwriters of the registrant and its officers and directors for certain liabilities arising under the Securities Act, or otherwise.

Item 15. Recent Sales of Unregistered Securities

Since January 1, 2001, the registrant has sold and issued the following unregistered securities:

From January 1, 2001 through February 29, 2004, the registrant had issued 658,560 shares of common stock under the 1998 Stock Option Plan with exercise prices ranging from $0.005 to $0.80 per share, and as of February 29, 2004, 6,822,718 shares of common stock are issuable upon exercise of outstanding options, with exercise prices ranging from $0.05 to $0.95 per share. The sale and issuances of securities listed above were deemed to be exempt from registration under the Securities Act by virtue of Rule 701 promulgated under Section 3(b) of the Securities Act as transactions pursuant to compensation benefits plans and contracts relating to compensation. All of the foregoing securities are deemed restricted securities for purposes of the Securities Act.

In August 2001, the registrant issued a warrant to purchase 3,984 shares of its Series D convertible preferred stock at an exercise price of $5.02 per share. The issuance of this warrant was deemed to be exempt from registration under Section 4(2) of the Securities Act as a transaction by an issuer not involving a public offering.

Item 16. Exhibits and Financial Statement Schedules

(a) Exhibits

Exhibit Number	Description
1.1	Form of Underwriting Agreement.
2.1*	Agreement and Plan of Merger between Brightmail Incorporated, a California corporation, and Brightmail Incorporated, a Delaware corporation.
3.1*	Form of Certificate of Incorporation of Registrant.
3.2*	Form of Amended and Restated Certificate of Incorporation of Registrant to be filed upon the closing of the offering made under the Registration Statement.
3.3*	Form Bylaws of Registrant.
4.1*	Form of Registrant’s Common Stock Certificate.
4.2**	Amended and Restated Investors’ Rights Agreement, dated as of July 20, 2000, between the Registrant and the parties named therein.

II-2

Exhibit Number	Description
5.1*	Opinion of Wilson Sonsini Goodrich & Rosati.
10.1**	Form of Indemnification Agreement entered into by Registrant with each of its directors and executive officers.
10.2**	1998 Stock Option Plan and form of stock option agreement thereunder.
10.3*	2004 Equity Incentive Plan to be effective upon the closing of the initial public offering.
10.4*	2004 Employee Stock Purchase Plan to be effective upon the closing of the initial public offering.
10.5**	Employment Agreement, dated March 11, 2002, between the Registrant and Enrique Salem.
10.6**	Offer letter, dated June 12, 2002, between the Registrant and Michael Conner.
10.7**	Offer letter, dated May 13, 2002, between the Registrant and Michael Irwin.
10.8**	Offer letter, dated October 23, 2002, between the Registrant and Brad Kingsbury.
10.9**	Office Lease Agreement dated as of July 14, 1999, between Registrant and EOP-301 Howard Street, L.L.C., and amendments thereto.
10.10†	Amended and Restated Symantec Service Provider Agreement, dated as of March 28, 2003, between the Registrant, Symantec Corporation and Symantec Limited.
10.10.1†	Amendment One to Amended and Restated Symantec Service Provider Agreement, dated August 25, 2003, between Registrant, Symantec Corporation and Symantec Limited.
10.10.2	Amendment Two to Amended and Restated Symantec Service Provider Agreement, dated March 22, 2004, between Registrant, Symantec Corporation and Symantec Limited.
10.11†	Software Development and License and Services Agreement, dated June 20, 2002, between Registrant and Microsoft Corporation.
10.11.1†	First Amendment to Software Development and License and Services Agreement, dated July 14, 2003, between Registrant and Microsoft Corporation.
10.11.2†	Letter Agreement, dated September 30, 2003, between Registrant and Microsoft Corporation.
10.11.3†	Second Amendment to Software Development and License and Services Agreement, dated November 21, 2003, between Registrant and Microsoft Corporation.
10.12†	Master License and Services Agreement Enterprise Agreement, dated October 10, 2002, between Registrant and Microsoft Corporation.
10.13†	Software Development and License and Services Agreement, dated September 30, 2000, between Registrant and Microsoft Network, LLC.
10.13.1†	Software Development and License and Services Agreement, dated January 4, 2001, between Registrant and WebTV Networks, Inc.
10.13.2	Letter Agreement, dated January 23, 2004, between Registrant and MSNTV Network, Inc.
10.13.3†	Amendment Number One to Software Development and License and Services Agreement, dated April 20, 2004, between Registrant and Microsoft Corporation.
10.14	License Agreement, dated November 13, 2003, between Registrant and Harrison 160, LLC, and addendums thereto.

II-3

Exhibit Number	Description
10.15	Terms and Conditions, dated as of April 13, 2004, between Registrant and Herakles, LLC.
10.16	Offer Letter, dated March 24, 2000, between Registrant and Bettina Koblick, and addendum thereto.
10.17	Offer Letter, dated September 7, 2001, between Registrant and Francois Lavaste.
10.18	Offer Letter, dated May 23, 2002, between Registrant and Ken Schneider.
21.1	Subsidiaries of the Registrant.
23.1*	Consent of Wilson Sonsini Goodrich & Rosati (included in Exhibit 5.1).
23.2	Consent of Ernst & Young LLP, Independent Auditors.
23.3	Letter of Authorization, dated March 17, 2004, from International Data Corporation to Registrant.
23.4	Letter of Authorization, dated April 27, 2004, from Ferris Research to Registrant.
23.5	Letter of Authorization, dated March 18, 2004, from Veritest to Registrant.
23.6	Letter of Authorization, dated April 27, 2004, from the Yankee Group to Registrant.
24.1	Power of Attorney (See page II-6 of this Registration Statement).

* To be supplied by amendment.

** Previously filed.

† Confidential treatment has been requested with respect to certain portions of this exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission.

(b) Financial Statement Schedules

Schedules not listed above have been omitted because the information required to be set forth therein is not applicable or is shown in the financial statements or notes thereto.

II-4

Item 17. Undertakings

The undersigned hereby undertakes to provide to the Underwriters at the closing specified in the Underwriting Agreement, certificates in such denominations and registered in such names as required by the Underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions referenced in Item 14 of this registration Statement or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered hereunder, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-5

Signatures

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Francisco, State of California, on this 28th day of April 2004.

BRIGHTMAIL INCORPORATED
By:	/s/    Enrique Salem
	Enrique Salem President and Chief Executive Officer

Power of attorney

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints, jointly and severally, Enrique Salem and Michael Irwin and each one of them acting individually, his true and lawful attorney-in-fact and agents, each with full power of substitution, for his and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and any registration statement related to the offering contemplated by this registration statement that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, and all post-effective amendments thereto, and to file the same, with all exhibits thereto and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done with respect to the offering of securities contemplated by this Registration Statement, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or any of them, or his or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.

II-6

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signatures	Title	Date
/s/    Enrique Salem         (Enrique Salem)	President, Chief Executive Officer and Director (Principal Executive Officer)	April 28, 2004
/s/    Michael Irwin         (Michael Irwin)	Chief Financial Officer (Principal Financial and Accounting Officer)	April 28, 2004
* (Eric W. Spivey)	Chairman of the Board	April 28, 2004
/s/    Jeffry R. Allen         (Jeffry R. Allen)	Director	April 28, 2004
* (John C. Colligan)	Director	April 28, 2004
/s/    Kenneth D. Denman         (Kenneth D. Denman)	Director	April 28, 2004
* (Henri Isenberg)	Director	April 28, 2004
* (Sunil Paul)	Director	April 28, 2004
* (Jon Q. Reynolds, Jr.)	Director	April 28, 2004
*By:        /s/    Michael Irwin Michael Irwin Attorney-in-fact

II-7

Exhibit index

Exhibit Number	Description	Sequential Page Number
1.1	Form of Underwriting Agreement.
2.1*	Agreement and Plan of Merger between Brightmail Incorporated, a California corporation, and Brightmail Incorporated, a Delaware corporation.
3.1*	Form of Certificate of Incorporation of Registrant.
3.2*	Form of Amended and Restated Certificate of Incorporation of Registrant to be filed upon the closing of the offering made under the Registration Statement.
3.3*	Form Bylaws of Registrant.
4.1*	Form of Registrant’s Common Stock Certificate.
4.2**	Amended and Restated Investors’ Rights Agreement, dated as of July 20, 2000, between the Registrant and the parties named therein.
5.1*	Opinion of Wilson Sonsini Goodrich & Rosati.
10.1**	Form of Indemnification Agreement entered into by Registrant with each of its directors and executive officers.
10.2**	1998 Stock Option Plan and form of stock option agreement thereunder.
10.3*	2004 Equity Incentive Plan to be effective upon the closing of the initial public offering.
10.4*	2004 Employee Stock Purchase Plan to be effective upon the closing of the initial public offering.
10.5**	Employment Agreement, dated March 11, 2002, between the Registrant and Enrique Salem.
10.6**	Offer letter, dated June 12, 2002, between the Registrant and Michael Conner.
10.7**	Offer letter, dated May 13, 2002, between the Registrant and Michael Irwin.
10.8**	Offer letter, dated October 23, 2002, between the Registrant and Brad Kingsbury.
10.9**	Office Lease Agreement dated as of July 14, 1999, between Registrant and EOP-301 Howard Street, L.L.C., and amendments thereto.
10.10†	Amended and Restated Symantec Service Provider Agreement, dated as of March 28, 2003, between the Registrant, Symantec Corporation and Symantec Limited.
10.10.1†	Amendment One to Amended and Restated Symantec Service Provider Agreement, dated August 25, 2003, between Registrant, Symantec Corporation and Symantec Limited.
10.10.2	Amendment Two to Amended and Restated Symantec Service Provider Agreement, dated March 22, 2004, between Registrant, Symantec Corporation and Symantec Limited.

Exhibit Number	Description	Sequential Page Number
10.11†	Software Development and License and Services Agreement, dated June 20, 2002, between Registrant and Microsoft Corporation.
10.11.1†	First Amendment to Software Development and License and Services Agreement, dated July 14, 2003, between Registrant and Microsoft Corporation.
10.11.2†	Letter Agreement, dated September 30, 2003, between Registrant and Microsoft Corporation.
10.11.3†	Second Amendment to Software Development and License and Services Agreement, dated November 21, 2003, between Registrant and Microsoft Corporation.
10.12†	Master License and Services Agreement Enterprise Agreement, dated October 10, 2002, between Registrant and Microsoft Corporation.
10.13†	Software Development and License and Services Agreement, dated September 30, 2000, between Registrant and Microsoft Network, LLC.
10.13.1†	Software Development and License and Services Agreement, dated January 4, 2001, between Registrant and WebTV Networks, Inc.
10.13.2	Letter Agreement, dated January 23, 2004, between Registrant and MSNTV Network, Inc.
10.13.3†	Amendment Number One to Software Development and License and Services Agreement, dated April 20, 2004, between Registrant and Microsoft Corporation.
10.14	License Agreement, dated November 13, 2003, between Registrant and Harrison 160, LLC, and addendums thereto.
10.15	Terms and Conditions, dated as of April 13, 2004, between Registrant and Herakles, LLC.
10.16	Offer Letter, dated March 24, 2000, between Registrant and Bettina Koblick, and addendum thereto.
10.17	Offer Letter, dated September 7, 2001, between Registrant and Francois Lavaste.
10.18	Offer Letter, dated May 23, 2002, between Registrant and Ken Schneider.
21.1	Subsidiaries of the Registrant.
23.1*	Consent of Wilson Sonsini Goodrich & Rosati (included in Exhibit 5.1).
23.2	Consent of Ernst & Young LLP, Independent Auditors.
23.3	Letter of Authorization, dated March 17, 2004, from International Data Corporation to Registrant.
23.4	Letter of Authorization, dated April 27, 2004, from Ferris Research to Registrant.
23.5	Letter of Authorization, dated March 18, 2004, from Veritest to Registrant.
23.6	Letter of Authorization, dated April 27, 2004, from the Yankee Group to Registrant.
24.1	Power of Attorney (See page II-6 of this Registration Statement).

* To be supplied by amendment.

** Previously filed.

† Confidential treatment has been requested with respect to certain portions of this exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission.

EX-1.1

EXHIBIT 1.1

J.P. MORGAN SECURITIES INC.

UNDERWRITING AGREEMENT

BRIGHTMAIL, INCORPORATED

            Shares of Common Stock

Underwriting Agreement

                    , 2004

J.P. Morgan Securities Inc.

Lehman Brothers Inc.

Pacific Crest Securities

As Representatives of the

several Underwriters listed

in Schedule I hereto

c/o J.P. Morgan Securities Inc.

277 Park Avenue

New York, New York 10172

Ladies and Gentlemen:

Brightmail, Incorporated, a Delaware corporation (the “Company”), proposes to issue and sell to the several Underwriters listed in Schedule I hereto (the “Underwriters”), for whom you are acting as representatives (the “Representatives”), an aggregate of              shares of Common Stock, par value $              per share, of the Company (the “Underwritten Shares”) and, for the sole purpose of covering over allotments in connection with the sale of the Underwritten Shares, at the option of the Underwriters, up to an additional              shares of Common Stock, par value $             per share, of the Company (the “Option Shares”). The Underwritten Shares and the Option Shares are herein referred to as the “Shares”.

The Company hereby confirms its agreement with the several Underwriters concerning the purchase and sale of the Shares, as follows:

1. Registration Statement. The Company has prepared and filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Securities Act”), a registration statement on form S-1 (File No. 333-113830) including a prospectus, relating to the Shares. Such registration statement, as amended at the time it becomes effective, including the

information, if any, deemed pursuant to Rule 430A under the Securities Act to be part of the registration statement at the time of its effectiveness (“Rule 430 Information”), is referred to herein as the “Registration Statement”; and as used herein, the term “Preliminary Prospectus” means each prospectus included in such registration statement (and any amendments thereto) before it becomes effective, any prospectus filed with the Commission pursuant to Rule 424(a) under the Securities Act and the prospectus included in the Registration Statement at the time of its effectiveness that omits Rule 430A Information, and the term “Prospectus” means the prospectus in the form first used to confirm sales of the Shares. If the Company has filed an abbreviated registration statement pursuant to Rule 462(b) under the Securities Act (the “Rule 462 Registration Statement”), then any reference herein to the term “Registration Statement” shall be deemed to include such Rule 462 Registration Statement. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Registration Statement and the Prospectus.

2. Purchase of the Shares by the Underwriters. (a) The Company agrees to sell the Shares to the several Underwriters as provided in this Agreement, and each Underwriter, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, agrees, severally and not jointly, to purchase from the Company the respective number of Underwritten Shares set forth opposite such Underwriter’s name in Schedule I hereto at a price per share of $              (the “Purchase Price”).

In addition, the Company, as and to the extent indicated in Schedule II hereto, agrees to issue and sell up to              Option Shares to the several Underwriters as provided in this Agreement, and the Underwriters, on the basis of the representations and warranties herein contained, but subject to the conditions set forth herein, shall have the option to purchase, severally and not jointly, from the Company such Option Shares at the Purchase Price.

If any Option Shares are to be purchased, the number of Option Shares to be purchased by each Underwriter shall be the number of Option Shares which bears the same ratio to the aggregate number of Option Shares being purchased as the number of Underwritten Shares set forth opposite the name of such Underwriter listed in Schedule I hereto (or such number increased as set forth in Section 9 hereof) bears to the aggregate number of Underwritten Shares being purchased from the Company by the several Underwriters, subject, however, to such adjustments to eliminate any fractional Shares as the Representatives in their sole discretion shall make.

The Underwriters may exercise the option to purchase the Option Shares at any time (but not more than once) on or before the thirtieth day following the date of this Agreement, by written notice from the Representatives to the Company. Such notice shall set forth the aggregate number of Option Shares as to which the option is being exercised and the date and time when the Option Shares are to be delivered and paid for which may be the same date and time as the Closing Date (as hereinafter defined) but shall not be earlier than the Closing Date nor later than the tenth full business day after the date of such notice (unless such time and date are postponed in accordance with the provisions of Section 11 hereof). Any such notice shall be given at least two business days prior to the date and time of delivery specified therein.

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(b) The Company understands that the Underwriters intend to make a public offering of the Shares as soon after the effectiveness of this Agreement as in the judgment of the Representatives is advisable, and initially to offer the Shares on the terms set forth in the Prospectus. The Company acknowledges and agrees that the Underwriters may offer and sell Shares to or through any affiliate of an Underwriter and that any such affiliate may offer and sell Shares purchased by it to or through any Underwriter.

(c) Payment for the Shares shall be made by wire transfer in immediately available funds to the account specified by the Company to the Representatives in the case of the Underwritten Shares, on             , 2004, or at such other time on the same or such other date, not later than the fifth business day thereafter, as the Representatives and the Company may agree upon in writing or, in the case of the Option Shares, on the date and time specified by the Representatives in the written notice of the Underwriters’ election to purchase such Option Shares. The time and date of such payment for the Underwritten Shares are referred to herein as the “Closing Date” and the time and date for such payment for the Option Shares, if other than the Closing Date, are herein referred to as the “Additional Closing Date”.

Payment for the Shares to be purchased on the Closing Date or the Additional Closing Date, as the case may be, shall be made against delivery to the Representatives for the respective accounts of the several Underwriters of the Shares to be purchased on such date in definitive form registered in such names and in such denominations as the Representatives shall request in writing not later than two full business days prior to the Closing Date or the Additional Closing Date, as the case may be, with any transfer taxes payable in connection with the transfer to the Underwriters of the Shares duly paid by the Company. The certificates for the Shares will be made available for inspection and packaging by the Representatives at the office of J.P. Morgan Securities Inc. set forth above not later than 1:00 P.M., New York City time, on the business day prior to the Closing Date or the Additional Closing Date, as the case may be.

3. Representations and Warranties of the Company. The Company represents and warrants to each Underwriter that:

(a) Preliminary Prospectus. No order preventing or suspending the use of any Preliminary Prospectus has been issued by the Commission, and each Preliminary Prospectus, at the time of filing thereof, complied in all material respects with the Securities Act and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company makes no representation and warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in any Preliminary Prospectus.

(b) Registration Statement and Prospectus. No order suspending the effectiveness of the Registration Statement has been issued by the Commission and no proceeding for that purpose has been initiated or threatened by the Commission; as of the applicable effective date of

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the Registration Statement and any amendment thereto, the Registration Statement complied and will comply in all material respects with the Securities Act, and did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading; and as of the applicable filing date of the Prospectus and any amendment or supplement thereto and as of the Closing Date and as of the Additional Closing Date, as the case may be, the Prospectus will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company makes no representation and warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in the Registration Statement and the Prospectus and any amendment or supplement thereto.

(c) Financial Statements. The financial statements and the related notes thereto included in the Registration Statement and the Prospectus comply in all material respects with the applicable requirements of the Securities Act and the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Exchange Act”), as applicable, and present fairly the financial position of the Company and its subsidiaries as of the dates indicated and the results of their operations and the changes in their cash flows for the periods specified. Such financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods covered thereby, and the supporting schedules included in the Registration Statement and the Prospectus present fairly the information required to be stated therein in accordance with the applicable requirements of the Securities Act, including, as applicable, the assumptions underlying such financial information. The financial data set forth in the Prospectus under the captions “Prospectus Summary—Summary Consolidated Financial Data”, “Selected Consolidated Financial Data” and “Capitalization” fairly present the information set forth therein on a basis consistent with that of the audited and unaudited financial statements contained in the Prospectus.

(d) No Material Adverse Change. Since the date of the most recent financial statements of the Company included in the Registration Statement and the Prospectus, (i) there has not been any change in the capital stock or long-term debt of the Company or any of its subsidiaries, or any dividend or distribution of any kind declared, set aside for payment, paid or made by the Company on any class of capital stock, or any material adverse change, or any development involving a prospective material adverse change, in or affecting the business, properties, management, financial position, stockholders’ equity, results of operations or prospects of the Company and its subsidiaries taken as a whole; (ii) neither the Company nor any of its subsidiaries has entered into any transaction or agreement that is material to the Company and its subsidiaries taken as a whole or incurred any liability or obligation, direct or contingent, that is material to the Company and its subsidiaries taken as a whole; and (iii) neither the Company nor any of its subsidiaries has sustained any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or regulatory authority having jurisdiction over the Company or any of its subsidiaries or any of their

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respective properties or assets (collectively, “Government Authorities”), except in each case as otherwise disclosed in the Registration Statement and the Prospectus.

(e) Organization and Good Standing. The Company and each of its subsidiaries have been duly organized and are validly existing organizations in good standing under the laws of their respective jurisdictions of organization, are duly qualified to do business and are in good standing as foreign entities in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification, and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged, except where the failure to be so qualified or have such power or authority would not, individually or in the aggregate, have a material adverse effect on the business, properties, management, financial position, stockholders’ equity, results of operations or prospects of the Company and its subsidiaries taken as a whole (a “Material Adverse Effect”). The Company does not own or control, directly or indirectly, any corporation, association or other entity other than the subsidiaries listed in Schedule II.

(f) Capitalization. At the Closing Date, the Company has an authorized capitalization as set forth in the Prospectus under the heading “Capitalization”; all the outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable and are not subject to any pre-emptive or similar rights except as disclosed in the Prospectus; except as described in or expressly contemplated by the Prospectus, there are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock or other equity interest in the Company or any of its subsidiaries, or any contract, commitment, agreement, understanding or arrangement of any kind relating to the issuance of any capital stock of the Company or any such subsidiary, any such convertible or exchangeable securities or any such rights, warrants or options; and upon the Closing Date, the capital stock of the Company conforms in all material respects to the description thereof contained in the Registration Statement and the Prospectus. Upon the Closing Date, all of the outstanding shares of capital stock or other equity interests of each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and are owned directly or indirectly by the Company, free and clear of any lien, charge, encumbrance, security interest, restriction on voting or transfer or any other claim of any third party.

(g) Underwriting Agreement. This Agreement has been duly authorized, executed and delivered by the Company and the Company has full right, power and authority to perform its obligations hereunder.

(h) The Shares. The Shares to be issued and sold by the Company hereunder upon the Closing Date have been duly authorized by the Company and, when issued and delivered and paid for as provided herein, will be duly and validly issued and will be fully paid and nonassessable and will conform to the descriptions thereof in the Prospectus; and the issuance of the Shares is not subject to any preemptive or similar rights.

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(i) No Violation or Default. Neither the Company nor any of its subsidiaries is (i) in violation of its charter or by-laws or similar organizational documents; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan or credit agreement, note, contract, franchise, lease or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject; or (iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority (“Governmental Authority”), except, in the case of clauses (ii) and (iii) above, for any such default or violation that would not, individually or in the aggregate, have a Material Adverse Effect.

(j) No Conflicts. The Company’s execution, delivery and performance of this Agreement and consummation of the transactions contemplated hereby and by the Prospectus (i) have been duly authorized by all necessary corporate action and will not result in any violation of the provisions of the charter or by-laws or similar organizational documents of the Company or any subsidiary, (ii) will not conflict with or constitute a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, and (iii) will not result in the violation of any law or statute or any judgment, order, rule or regulation of any Governmental Authority.

(k) No Consent Required. No consent, approval, authorization or other order of, or registration or filing with, any court or other Governmental Authority is required for the Company’s execution, delivery and performance of this Agreement and the consummation by the Company of the transactions contemplated hereby and by the Prospectus, except for (i) the registration of the Shares under the Securities Act and such consents, approvals, authorizations, orders and registrations or qualifications as may be required under applicable state securities laws in connection with the purchase and distribution of the Shares by the Underwriters and (ii) any other consent, approval, authorization, order and registration or qualification, which the failure to obtain would not, individually or in the aggregate, be material to the Company or materially and adversely affect the transactions contemplated hereby.

(l) Legal Proceedings. Except as disclosed in the Prospectus, there are no legal, governmental or regulatory investigations, actions, suits or proceedings pending to which the Company or any of its subsidiaries is or may be a party or to which any property of the Company or any of its subsidiaries is or may be the subject that, individually or in the aggregate, if determined adversely to the Company or any of its subsidiaries, could reasonably be expected to have a Material Adverse Effect or materially and adversely affect the ability of the Company to perform its obligations under or consummate the transactions contemplated by this Agreement. No investigations, actions, suits or proceedings are threatened in writing or, to the knowledge of the Company, contemplated by any Governmental Authority or threatened by others; and there

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are no statutes, regulations or contracts or other documents that are required under the Securities Act to be filed as exhibits to the Registration Statement or described in the Registration Statement or the Prospectus that are not so filed or described.

(m) Independent Accountants. Ernst & Young LLP, who have certified certain financial statements of the Company and its subsidiaries, are independent and certified public accountants with respect to the Company and its subsidiaries as required by the Securities Act.

(n) Title to Real and Personal Property. The Company and its subsidiaries have good and marketable title in fee simple to, or have valid rights to lease or otherwise use, all items of real and personal property that are material to the respective businesses of the Company and its subsidiaries, in each case free and clear of any security interests, liens, encumbrances, claims and defects and imperfections of title except those that (i) are disclosed in the Prospectus, (ii) do not materially interfere with the use made and proposed to be made of such property by the Company and its subsidiaries or (iii) could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

(o) Title to Intellectual Property. The Company and its subsidiaries own, are licensed or possess adequate rights to use all material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses and know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) (collectively, “Intellectual Property”) necessary for the conduct of their respective businesses; and the conduct of their respective businesses will not conflict in any material respect with any such rights of others, and the Company and its subsidiaries have not received any notice of any claim of infringement or conflict with any such rights of others except those claims or conflicts that (i) do not, or if determined adversely to the Company would not, materially interfere with the use made or proposed to be made of such Intellectual Property by the Company and its subsidiaries and (ii) could not reasonably be expected, individually or in the aggregate, to be material to the Company. The Company is not a party to or bound by any options, licenses or agreements with respect to the intellectual property rights of any other person or entity that are required to be set forth in the Prospectus and are not described in all material respects. None of the technology employed by the Company has been obtained or is being used by the Company in violation of any contractual obligation binding on the Company or, to the Company’s knowledge, any of its officers, directors or employees or otherwise in violation of the rights of any persons, which violations would, individually or in the aggregate, result in a Material Adverse Effect.

(p) No Undisclosed Relationships. No relationship, direct or indirect, exists between or among the Company or any of its subsidiaries, on the one hand, and the directors, officers, stockholders, customers or suppliers of the Company or any of its subsidiaries, on the other, that is required by the Securities Act to be described in the Registration Statement and the Prospectus and that is not so described. Without limiting the foregoing, there are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit of any of the executive officers or directors of the Company, except as disclosed in the Prospectus to the extent required to be so disclosed.

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(q) Investment Company Act. The Company is not and, after giving effect to the offering and sale of the Shares and the application of the proceeds thereof as described in the Prospectus, will not be an “investment company” or an entity “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder (collectively, “Investment Company Act”).

(r) Taxes. The Company and its subsidiaries have paid all material federal, state, local and foreign taxes and filed all material tax returns required to be paid or filed through the date hereof; and except as otherwise disclosed in the Prospectus, there is no tax deficiency that has been, or could reasonably be expected to be, asserted against the Company or any of its subsidiaries or any of their respective properties or assets.

(s) Licenses and Permits. The Company and its subsidiaries possess all licenses, valid and current certificates, permits and other authorizations issued by, and have made all declarations and filings with, the appropriate Governmental Authorities that are necessary for the ownership or lease of their respective properties or the conduct of their respective businesses as described in the Registration Statement and the Prospectus, except where the failure to possess or make the same would not, individually or in the aggregate, have a Material Adverse Effect. Neither the Company nor any of its subsidiaries has received notice of any revocation or modification of any such license, certificate, permit or authorization or has any reason to believe that any such license, certificate, permit or authorization will not be renewed in the ordinary course.

(t) No Labor Disputes. No labor disturbance by or material dispute with employees of the Company or any of its subsidiaries exists or, to the knowledge of the Company, is contemplated or threatened.

(u) Compliance With Environmental Laws. The Company and its subsidiaries (i) are in compliance with any and all applicable federal, state, local and foreign laws, rules, regulations, decisions and orders relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (collectively, “Environmental Laws”); (ii) have received and are in compliance with all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) have not received notice of any actual or potential liability for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, except in any such case for any such failure to comply, or failure to receive required permits, licenses or approvals, or liability as would not, individually or in the aggregate, have a Material Adverse Effect.

(v) Compliance With ERISA. The Company and its subsidiaries and any “employee benefit plan” (as defined under the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, “ERISA”)) established or maintained by the Company, its subsidiaries or their “ERISA Affiliates” (as defined below) are in compliance in all material respects with ERISA. “ERISA Affiliate” means, with respect to the Company or any of its subsidiaries, any member of any group of organizations

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described in Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations thereunder (the “Code”) of which the Company or such subsidiary is a member. No “reportable event” (as defined under ERISA) has occurred or is reasonably expected to occur with respect to any “employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates. No “employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates, if such “employee benefit plan” were terminated, would have any “amount of unfunded benefit liabilities” (as defined under ERISA). None of the Company, its subsidiaries nor any of their ERISA Affiliates has incurred or reasonably expects to incur any liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each “employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates that is intended to be qualified under Section 401(a) of the Code is so qualified and nothing has occurred, whether by action or failure to act, which would cause the loss of such qualification, which could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

(w) Accounting Controls. The Company and its subsidiaries maintain systems of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(x) Insurance. Each of the Company and its subsidiaries is insured by recognized, financially sound and reputable institutions with policies in such amounts and with such deductibles and covering such risks as are generally deemed adequate and customary for their businesses. The Company has no reason to believe that it or any subsidiary will not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not reasonably be expected to result in a Material Adverse Effect.

(y) No Unlawful Payments. Neither the Company nor any of its subsidiaries nor, to the best knowledge of the Company, any director, officer, agent, employee or other person associated with or acting on behalf of the Company or any of its subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

(z) No Restrictions on Subsidiaries. No subsidiary of the Company is currently prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or

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is subject, from paying any dividends to the Company, from making any other distribution on such subsidiary’s capital stock, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary’s properties or assets to the Company or any other subsidiary of the Company.

(aa) No Broker’s Fees. Neither the Company nor any of its subsidiaries is a party to any contract, agreement or understanding with any person (other than this Agreement) that would give rise to a valid claim against the Company or any of its subsidiaries or any Underwriter for a brokerage commission, finder’s fee or like payment in connection with the offering and sale of the Shares except as disclosed in the Prospectus.

(bb) No Registration Rights. No person has the right to require the Company or any of its subsidiaries to register any securities for sale under the Securities Act by reason of the filing of the Registration Statement with the Commission or the issuance and sale of the Shares to be sold by the Company hereunder except as disclosed in the Prospectus.

(cc) No Stabilization. The Company has not taken, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Shares.

(dd) Forward-Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the Registration Statement and the Prospectus has been made without a reasonable basis or has been disclosed other than in good faith.

(ee) Statistical and Market Data. Nothing has come to the attention of the Company that has caused the Company to believe that the statistical and market-related data included in the Registration Statement and the Prospectus are not based on or derived from sources that are reliable and accurate in all material respects.

(ff) Compliance with Sarbanes-Oxley Act. The Company is in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act of 2002 that are effective.

4. Further Agreements of the Company. The Company covenants and agrees with each Underwriter that:

(a) Effectiveness of the Registration Statement. The Company will use its reasonable best efforts to cause the Registration Statement to become effective at the earliest possible time and, if required, will file the final Prospectus with the Commission within the time periods specified by Rule 424(b) and Rule 430A under the Securities Act and the Company will furnish copies of the Prospectus to the Underwriters in New York City prior to 10:00 A.M., New York City time, on the business day next succeeding the date of this Agreement in such quantities as the Representatives may reasonably request.

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(b) Delivery of Copies. The Company will deliver, without charge (i) to the Representatives, five signed copies of the Registration Statement as originally filed and each amendment thereto, in each case including all exhibits and consents filed therewith; and (ii) during the Prospectus Delivery Period, as many copies of the Prospectus (including all amendments and supplements thereto as the Representatives may reasonably request. As used herein, the term “Prospectus Delivery Period” means such period of time after the first date of the public offering of the Shares as in the opinion of counsel for the Underwriters a prospectus relating to the Shares is required by law to be delivered in connection with sales of the Shares by any Underwriter or dealer.

(c) Amendments or Supplements. Before filing any amendment or supplement to the Registration Statement or the Prospectus, whether before or after the time that the Registration Statement becomes effective, the Company will furnish to the Representatives and counsel for the Underwriters a copy of the proposed amendment or supplement for review and will not file any such proposed amendment or supplement to which the Representatives reasonably object.

(d) Notice to the Representatives. The Company will advise the Representatives promptly, and confirm such advice in writing upon request, (i) when the Registration Statement has become effective; (ii) when any amendment to the Registration Statement has been filed or becomes effective; (iii) when any supplement to the Prospectus or any amendment to the Prospectus has been filed; (iv) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or the receipt of any comments from the Commission relating to the Registration Statement or any other request by the Commission for any additional information; (v) of the issuance by the Commission of any order suspending the effectiveness of the Registration Statement or preventing or suspending the use of any Preliminary Prospectus or the Prospectus or the initiation or threatening of any proceeding for that purpose; (vi) of the occurrence of any event within the Prospectus Delivery Period as a result of which the Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Prospectus is delivered to a purchaser, not misleading; and (vii) of the receipt by the Company of any notice with respect to any suspension of the qualification of the Shares for offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and the Company will use its reasonable best efforts to prevent the issuance of any such order suspending the effectiveness of the Registration Statement, preventing or suspending the use of any Preliminary Prospectus or the Prospectus or suspending any such qualification of the Shares and, if any such order is issued, will obtain as soon as possible the withdrawal thereof.

(e) Ongoing Compliance of the Prospectus. If during the Prospectus Delivery Period (i) any event shall occur or condition shall exist as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Prospectus is delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement the Prospectus to comply with law, the Company will immediately notify the Underwriters thereof and forthwith prepare and, subject to paragraph (c)

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above, file with the Commission and furnish to the Underwriters and to such dealers as the Representatives may designate, such amendments or supplements to the Prospectus as may be necessary so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances existing when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus will comply with law.

(f) Blue Sky Compliance. The Company will qualify the Shares for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representatives shall reasonably request and will continue such qualifications in effect so long as required for distribution of the Shares; provided that the Company shall not be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not otherwise so subject.

(g) Earning Statement. The Company will make generally available to its security holders and the Representatives as soon as practicable an earning statement that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated thereunder covering a period of at least twelve months beginning with the first fiscal quarter of the Company occurring after the “effective date” (as defined in Rule 158) of the Registration Statement.

(h) Clear Market. For a period of 180 days after the date of the Prospectus, the Company will not (i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly, any shares of Stock or any securities convertible into or exercisable or exchangeable for Stock or (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Stock, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Stock or such other securities, in cash or otherwise, without the prior written consent of the Representatives, other than (i) the Shares to be sold hereunder and any shares of Stock of the Company issued upon the exercise of options granted under existing employee stock option plans or warrants outstanding on the Effective Date or (ii) any grant of stock options under existing employee stock option plans, any grant of awards or issuance of any shares of Stock issued pursuant to stock awards under existing employee stock plans, in each case as are described in the Prospectus, and provided that the recipients, if any such options or shares enter into or have entered into lock-up agreements with the Representatives in the form attached hereto as Exhibit C hereto.

(i) Use of Proceeds. The Company will apply the net proceeds from the sale of the Shares as described in the Prospectus under the heading “Use of Proceeds”.

(j) No Stabilization. The Company will not take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Shares.

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(k) Exchange Listing. The Company will use its best efforts to list for quotation, subject to notice of issuance, the Shares on the National Association of Securities Dealers Automated Quotations National Market (the “Nasdaq National Market”).

(l) Reports. So long as the Shares are outstanding, to make available to the Representatives, as soon as they are available, copies of all reports or other communications (financial or other) furnished to holders of the Shares, and copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange or automatic quotation system.

(m) Filings. The Company will file with the Commission such reports as may be required by Rule 463 under the Securities Act.

5. Conditions of Underwriters’ Obligations. The obligation of each Underwriter to purchase the Underwritten Shares on the Closing Date or the Option Shares on the Additional Closing Date, as the case may be as provided herein is subject to the performance by the Company of its covenants and other obligations hereunder and to the following additional conditions:

(a) Registration Compliance; No Stop Order. The Registration Statement (or if a post-effective amendment thereto is required to be filed under the Securities Act, such post-effective amendment) shall have become effective, and the Representatives shall have received notice thereof, not later than 5:00 P.M., New York City time, on the date hereof; no order suspending the effectiveness of the Registration Statement shall be in effect, and no proceeding for such purpose shall be pending before or to the Company’s knowledge threatened by the Commission; the Prospectus shall have been timely filed with the Commission under the Securities Act and in accordance with Section 4(a) hereof; and all requests by the Commission for additional information shall have been complied with to the reasonable satisfaction of the Representatives.

(b) Representations and Warranties. The representations and warranties of the Company contained herein shall be true and correct on the date hereof and on and as of the Closing Date or the Additional Closing Date, as the case may be; and the statements of the Company and its officers made in any certificates delivered pursuant to this Agreement shall be true and correct on and as of the Closing Date or the Additional Closing Date, as the case may be.

(c) No Material Adverse Change. Subsequent to the execution and delivery of this Agreement, no event or condition of a type described in Section 3(d) hereof shall have occurred or shall exist, which event or condition is not described in the Prospectus (excluding any amendment or supplement thereto) and the effect of which in the judgment of the Representatives makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Shares on the Closing Date or the Additional Closing Date, as the case may be, on the terms and in the manner contemplated by this Agreement and the Prospectus.

(d) Officer’s Certificate. The Representatives shall have received on and as of the Closing Date or the Additional Closing Date, as the case may be, a certificate of the chief financial

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officer of the Company (i) confirming that such officers have carefully reviewed the Registration Statement and the Prospectus and, based on the knowledge of such officers, the representations and warranties of the Company in this Agreement are true and correct and that the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to such Closing Date and (ii) to the effect set forth in paragraphs (a) and (c) above.

(e) Comfort Letters. On the date of this Agreement and on the Closing Date or the Additional Closing Date, as the case may be, Ernst & Young LLP shall have furnished to the Representatives, at the request of the Company, letters, dated the respective dates of delivery thereof and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representatives, containing statements and information of the type customarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectus; provided, that the letter delivered on the Closing Date or the Additional Closing Date, as the case may be] shall use a “cut-off” date no more than three business days prior to such Closing Date or such Additional Closing Date, as the case may be.

(f) Opinion of Counsel for the Company. Wilson Sonsini Goodrich & Rosati, Professional Corporation, counsel for the Company, shall have furnished to the Representatives, at the request of the Company, their written opinion, dated the Closing Date or the Additional Closing Date, as the case may be, and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representatives, to the effect set forth in Exhibit A hereto.

(g) Opinion of Intellectual Property Counsel for the Company. Blakely Sokoloff Taylor & Zafman, LLP, intellectual property counsel for the Company, shall have furnished to the Representatives, at the request of the Company, their written opinion, dated the Closing Date or the Additional Closing Date, as the case may be, and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representatives, to the effect set forth in Exhibit B hereto.

(h) Opinion of Counsel for the Underwriters. The Representatives shall have received on and as of the Closing Date or the Additional Closing Date, as the case may be, an opinion of Davis Polk & Wardwell, counsel for the Underwriters, with respect to such matters as the Representatives may reasonably request, and such counsel shall have received such documents and information as they may reasonably request to enable them to pass upon such matters.

(i) No Legal Impediment to Issuance. No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any Governmental Authority that would, as of the Closing Date or the Additional Closing Date, as the case may be, prevent the issuance or sale of the Shares; and no injunction or order of any federal, state or foreign court shall have been issued that would, as of the Closing Date or the Additional Closing Date, as the case may be, prevent the issuance or sale of the Shares.

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(j) Good Standing. The Representatives shall have received on and as of the Closing Date or the Additional Closing Date, as the case may be, satisfactory evidence of the good standing of the Company and its subsidiaries in their respective jurisdictions of organization and their good standing as foreign entities in such other jurisdictions as the Representatives may reasonably request, in each case in writing or any standard form of telecommunication from the appropriate Governmental Authorities of such jurisdictions.

(k) Exchange Listing. The Shares to be delivered on the Closing Date or Additional Closing Date, as the case may be, shall have been approved for quotation on the Nasdaq National Market, subject to official notice of issuance.

(l) Lock-up Agreements. The “lock-up” agreements, each substantially in the form of Exhibit A hereto, between you and the shareholders, officers and directors of the Company relating to sales and certain other dispositions of shares of Stock or certain other securities, delivered to you on or before the date hereof, shall be full force and effect on the Closing Date or the Additional Closing Date, as the case may be.

(m) Additional Documents. On or prior to the Closing Date or the Additional Closing Date, as the case may be, the Company shall have furnished to the Representatives such further certificates and documents as the Representatives may reasonably request.

(n) NASD Compliance. The NASD shall have raised no objection to the fairness and reasonableness of the underwriting terms and arrangements.

All opinions, letters, certificates and evidence mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Underwriters.

6. Indemnification and Contribution.

(a) Indemnification of the Underwriters by the Company. The Company agrees to indemnify and hold harmless each Underwriter, its affiliates, directors and officers and each person, if any, who controls such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each, a “Controlling Person”), from and against any and all losses, claims, damages and liabilities (including, without limitation, legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus (or any amendment or supplement thereto) or any Preliminary Prospectus, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to any Underwriter furnished to the Company in writing by such Underwriter through the

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Representatives expressly for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in subsection (b) below provided, that with respect to any such untrue statement in or omission from any Preliminary Prospectus, the indemnity agreement contained in this paragraph (a) shall not inure to the benefit of any Underwriter to the extent that the sale to the person asserting of any such loss, claim, damage or liability was an initial resale by such Underwriter and any such loss, claim, damage or liability of or with respect to such Underwriter results from the fact that both (i) to the extent required by applicable law, a copy of the Prospectus was not sent or given to such person at or prior to the written confirmation of the sale of such Shares to such person and (ii) the untrue statement in or omission from such Preliminary Prospectus was corrected in the Prospectus unless, in either case, such failure to deliver the Prospectus was a result of non-compliance by the Company with the provisions of Section 5 hereof.

(b) Indemnification of the Company. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors, its officers who signed the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above, but only with respect to any losses, claims, damages or liabilities (including, without limitation, reasonable legal fees and other reasonable expenses incurred in connection with any such action or proceeding regarding any claim asserted as such fees and expenses are incurred) that arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to such Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in the Registration Statement and the Prospectus (or any amendment or supplement thereto) or any Preliminary Prospectus, it being understood and agreed upon that the only such information furnished by any Underwriter consists of the following information in the Prospectus furnished on behalf of each Underwriter: the concession and reallowance figures appearing in the              paragraph under the caption “Underwriting” and the information contained in the              paragraph (refer to any paragraph describing passive market making) under the caption “Underwriting”. [Subject to review of the final Underwriting section.]

(c) Notice and Procedures. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any person in respect of which indemnification may be sought pursuant to the preceding paragraphs of this Section 8, such person (the “Indemnified Person”) shall promptly notify the person against whom such indemnification may be sought (the “Indemnifying Person”) in writing; provided that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have under this Section 8 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person otherwise than under this Section 8. If any such proceeding shall be brought or asserted against an Indemnified Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others entitled to indemnification pursuant to this Section 8 that the

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Indemnifying Person may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Indemnifying Person; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be paid or reimbursed as they are incurred. Any such separate firm for any Underwriter, its affiliates, directors and officers and any control persons of such Underwriter shall be designated in writing by J.P. Morgan Securities Inc., any such separate firm for the Company, its directors, its officers who signed the Registration Statement and any control persons of the Company shall be designated in writing by the Company. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any loss or liability by reason of such settlement or judgment. No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnification could have been sought hereunder by such Indemnified Person, unless such settlement (x) includes an unconditional release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.

(d) Contribution. If the indemnification provided for in paragraphs (a) and (b) above is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Shares or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) but also the relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other shall be deemed to be in the same respective proportions as the net proceeds (before deducting expenses) received by the Company and from the sale of the Shares

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and the total underwriting discounts and commissions received by the Underwriters in connection therewith, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate offering price of the Shares. The relative fault of the Company on the one hand and the Underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

(e) Limitation on Liability. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 8 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Person in connection with any such action or claim. Notwithstanding the provisions of this Section 6, in no event shall an Underwriter be required to contribute any amount in excess of the amount by which the total underwriting discounts and commissions received by such Underwriter with respect to the offering of the Shares exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to this Section 8 are several in proportion to their respective purchase obligations hereunder and not joint.

(g) Non-Exclusive Remedies. The remedies provided for in this Section 8 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnified Person at law or in equity.

7. Effectiveness of Agreement. This Agreement shall become effective upon the execution and delivery hereof by the parties hereto.

8. Termination. This Agreement may be terminated in the absolute discretion of the Representatives, by notice to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date or, in the case of the Option Shares, prior to the Additional Closing Date (i) trading generally shall have been suspended or materially limited on or by any of the Nasdaq National Market, New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers, Inc., the Chicago Board Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade; (ii) trading of any securities issued or guaranteed by the Company shall have been suspended on any exchange or in any over-the-counter market; (iii) a general moratorium on commercial banking activities shall have been declared by federal or New York State authorities; or (iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis, either

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within or outside the United States that, in the judgment of the Representatives, is material and adverse and makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Shares on the Closing Date or the Additional Closing Date, as the case may be on the terms and in the manner contemplated by this Agreement and the Prospectus.

9. Defaulting Underwriter. (a) If, on the Closing Date or the Additional Closing Date, as the case may be, any Underwriter defaults on its obligation to purchase the Shares that it has agreed to purchase hereunder on such date, the non-defaulting Underwriters may in their discretion arrange for the purchase of such Shares by other persons satisfactory to the Company on the terms contained in this Agreement. If, within 36 hours after any such default by any Underwriter, the non-defaulting Underwriters do not arrange for the purchase of such Shares, then the Company shall be entitled to a further period of 36 hours within which to procure other persons satisfactory to the non-defaulting Underwriters to purchase such Shares on such terms. If other persons become obligated or agree to purchase the Shares of a defaulting Underwriter, either the non-defaulting Underwriters or the Company may postpone the Closing Date or the Additional Closing Date, as the case may be, for up to five full business days in order to effect any changes that in the opinion of counsel for the Company or counsel for the Underwriters may be necessary in the Registration Statement and the Prospectus or in any other document or arrangement, and the Company agrees to promptly prepare any amendment or supplement to the Registration Statement and the Prospectus that effects any such changes. As used in this Agreement, the term “Underwriter” includes, for all purposes of this Agreement unless the context otherwise requires, any person not listed in Schedule I hereto that, pursuant to this Section 9, purchases Shares that a defaulting Underwriter agreed but failed to purchase.

(b) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by the non-defaulting Underwriters and the Company as provided in paragraph (a) above, the aggregate number of Shares that remain unpurchased on the Closing Date or the Additional Closing Date, as the case may be, does not exceed one-eleventh of the aggregate number of Shares to be purchased on such date, then the Company shall have the right to require each non-defaulting Underwriter to purchase the number of Shares that such Underwriter agreed to purchase hereunder on such date plus such Underwriter’s pro rata share (based on the number of Shares that such Underwriter agreed to purchase on such date) of the Shares of such defaulting Underwriter or Underwriters for which such arrangements have not been made.

(c) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by the non-defaulting Underwriters and the Company as provided in paragraph (a) above, the aggregate number of Shares that remain unpurchased on the Closing Date or the Additional Closing Date, as the case may be, exceeds one-eleventh of the aggregate amount of Shares to be purchased on such date, or if the Company shall not exercise the right described in paragraph (b) above, then this Agreement or, with respect to any Additional Closing Date, the obligation of the Underwriters to purchase Shares on the Additional Closing Date, as the case may be, shall terminate without liability on the part of the non-defaulting Underwriters. Any termination of this Agreement pursuant to this Section 9 shall be without liability on the part of the Company, except that the Company will continue to be liable for the payment of expenses as set forth in Section 10 hereof and except that the provisions of Section 6 hereof shall not terminate and shall remain in effect.

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(d) Nothing contained herein shall relieve a defaulting Underwriter of any liability it may have to the Company or any non-defaulting Underwriter for damages caused by its default.

10. Payment of Expenses. (a) Whether or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated, the Company will pay or cause to be paid all costs and expenses incident to the performance of its obligations hereunder, including without limitation, (i) the costs incident to the authorization, issuance, sale, preparation and delivery of the Shares and any taxes payable in that connection; (ii) the costs incident to the preparation, printing and filing under the Securities Act of the Registration Statement, the Preliminary Prospectus and the Prospectus (including all exhibits, amendments and supplements thereto) and the distribution thereof; (iii) the fees and expenses of the Company’s counsel and independent accountants; (iv) the fees and expenses incurred in connection with the registration or qualification and determination of eligibility for investment of the Shares under the laws of such jurisdictions as the Representatives may designate and the preparation, printing and distribution of a Blue Sky Memorandum (including the related fees and expenses of counsel for the Underwriters in an amount not to exceed $10,000); (v) the cost of preparing stock certificates; (vi) the costs and charges of any transfer agent and any registrar; (vii) all expenses and application fees incurred in connection with any filing and clearance of the offering by the National Association of Securities Dealers, Inc.; (viii) all expenses incurred by the Company in connection with any “road show” presentation to potential investors; and (ix) all expenses and application fees related to the listing of the Shares on the Nasdaq National Market.

(b) If (i) this Agreement is terminated pursuant to Section 8; (ii) the Company for any reason fail to tender the Shares for delivery to the Underwriters or (iii) the Underwriters decline to purchase the Shares for any reason permitted under this Agreement, the Company agrees to reimburse the Underwriters for all reasonable out-of-pocket costs and expenses (including the reasonable fees and expenses of their counsel) reasonably incurred by the Underwriters in connection with this Agreement and the offering contemplated hereby.

11. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and any controlling persons referred to in Section 6 hereof. Nothing in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. No purchaser of Shares from any Underwriter shall be deemed to be a successor merely by reason of such purchase.

12. Survival. The respective indemnities, rights of contribution, representations, warranties and agreements of the Company and the Underwriters contained in this Agreement or made by or on behalf of the Company or the Underwriters pursuant to this Agreement or any certificate delivered pursuant hereto shall survive the delivery of and payment for the Shares and shall remain in full force and effect, regardless of any termination of this Agreement or any investigation made by or on behalf of the Company or the Underwriters.

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13. Certain Defined Terms. For purposes of this Agreement, (a) except where otherwise expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities Act; (b) the term “business day” means any day other than a day on which banks are permitted or required to be closed in New York City; and (c) the term “subsidiary” has the meaning set forth in Rule 405 under the Securities Act.

14. Miscellaneous. (a) Authority of the Representatives. Any action by the Underwriters hereunder may be taken by J.P. Morgan Securities Inc. on behalf of the Underwriters, and any such action taken by J.P. Morgan Securities Inc. shall be binding upon the Underwriters.

(b) Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted and confirmed by any standard form of telecommunication. Notices to the Underwriters shall be given to the Representatives c/o J.P. Morgan Securities Inc., 277 Park Avenue, New York, New York 10172 (fax:212-622-8358); Attention: Syndicate Desk. Notices to the Company shall be given to it at Brightmail, Incorporated, 301 Howard Street, Suite 1800, San Francisco, California 94105, (Fax: 415-348-9636); Attention: Michael Irwin.

(c) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

(d) Counterparts. This Agreement may be signed in counterparts (which may include counterparts delivered by any standard form of telecommunication), each of which shall be an original and all of which together shall constitute one and the same instrument.

(e) Amendments or Waivers. No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto.

(f) Headings. The headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.

If the foregoing is in accordance with your understanding, please indicate your acceptance of this Agreement by signing in the space provided below.

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Very truly yours, Brightmail, Incorporated
By:
	Name: Title:

Accepted:                     , 200  

J.P. MORGAN SECURITIES INC. For itself and on behalf of the several Underwriters listed in Schedule I hereto.
By
	Authorized Signatory

22

Schedule I

Underwriter		Number of Shares
J.P. Morgan Securities Inc.
Lehman Brothers Inc.
Pacific Crest Securities
	Total

Schedule II

SUBSIDIARIES OF BRIGHTMAIL INCORPORATED

Exhibit A

[Form of Opinion of Counsel for the Company]

1. The Registration Statement was declared effective under the Securities Act as of the date and time specified in such opinion; the Prospectus was filed with the Commission pursuant to the subparagraph of Rule 424(b) under the Securities Act specified in such opinion on the date specified therein; and no order suspending the effectiveness of the Registration Statement has been issued and, to the knowledge of such counsel, no proceeding for that purpose is pending or threatened by the Commission.

2. The Registration Statement and the Prospectus (other than the financial statements and related schedules therein, as to which such counsel need express no opinion) comply as to form in all material respects with the requirements of the Securities Act.

3. The Company and each of its subsidiaries have been duly organized and are validly existing as organizations in good standing under the laws of their respective jurisdictions of incorporation, are duly qualified to do business and are in good standing as foreign entities in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification, and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged, except where the failure to be so qualified or have such power or authority would not, individually or in the aggregate, have a Material Adverse Effect.

4. The Company has an authorized capitalization as set forth in the Prospectus under the heading “Capitalization”; all the outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable; the capital stock of the Company conforms in all material respects to the description thereof contained in the Registration Statement and the Prospectus; and all the outstanding shares of capital stock or other equity interests of each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable.

5. The Company has full right, power and authority to execute and deliver the Underwriting Agreement and to perform its obligations thereunder; and all corporate action required to be taken for the due and proper authorization, execution and delivery of the Underwriting Agreement and the consummation by the Company of the transactions contemplated thereby have been duly and validly taken.

6. The Underwriting Agreement has been duly authorized, executed and delivered by the Company.

7. The Underwriting Agreement conforms in all material respects to the description thereof contained in the Registration Statement and the Prospectus.

8. The Shares to be issued and sold by the Company hereunder have been duly authorized, and when delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable and the issuance of the Shares is not subject to any preemptive or similar rights set forth in any document filed as an exhibit to the Registration Statement.

9. Neither the Company nor any of its subsidiaries is (i) in violation of its charter or by-laws or similar organizational documents; (ii) to the knowledge of such counsel, in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it is bound or to which any of its property or assets is subject and which are set forth in any document filed as an Exhibit to the Registration Statement; or (iii) to the knowledge of such counsel, in violation of any law or statute or any judgment, order, rule or regulation of any Governmental Authority, except in the case of clauses (ii) and (iii) for any such default or violation that would not, individually or in the aggregate, have a Material Adverse Effect.

10. The execution, delivery and performance by the Company of the Underwriting Agreement, the issuance and sale of the Shares to be sold by the Company and delivered on the Closing Date or the Additional Closing Date, as the case may be, and compliance by the Company with the terms of and the consummation of the transactions contemplated by the Underwriting Agreement will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject which are filed as an exhibit to the Registration Statement, (ii) result in any violation of the provisions of the charter, by-laws or similar organizational documents of the Company or any of its subsidiaries or (iii) result in the violation of any law or statute or any judgment, order or regulation of any Governmental Authority except in the case of clauses (i) and (iii) above, for such conflict, breach or violation that would not, individually or in the aggregate, have a Material Adverse Effect.

11. No consent, approval, authorization, order, registration or qualification of or with any Governmental Authority is required for the execution, delivery and performance by the Company of the Underwriting Agreement, the issuance and sale of the Shares to be sold by the Company and delivered on the Closing Date or the Additional Closing Date, as the case may be, and compliance by the Company with the terms thereof and the consummation of the transactions contemplated by the Underwriting Agreement, except for the registration of the Shares under the Securities Act and such consents, approvals, authorizations, orders and registrations or qualifications as may be required under applicable state securities laws in connection with the purchase and distribution of the Shares by the Underwriters.

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12. To the knowledge of such counsel, except as described in the Prospectus, there are no legal, governmental or regulatory investigations, actions, suits or proceedings pending to which the Company or any of its subsidiaries is or may be a party or to which any property of the Company or any of its subsidiaries is or may be the subject which, individually or in the aggregate, if determined adversely to the Company or any of its subsidiaries, could reasonably be expected to have a Material Adverse Effect; and to the best knowledge of such counsel, no such investigations, actions, suits or proceedings are threatened or contemplated by any Governmental Authority or threatened by others.

13. The descriptions in the Prospectus of statutes, legal, governmental and regulatory proceedings and contracts and other documents are accurate in all material respects; the statements in the Prospectus under the headings “Certain Federal Income Tax Considerations”, “Description of Capital Stock”, “Underwriting” and “Legal Proceedings”, and in the Registration Statement in items 14 and 15, to the extent that they constitute summaries of the terms of stock, matters of law or regulation or legal conclusions, fairly summarize the matters described therein in all material respects; and, to the knowledge of such counsel, (A) there are no current or pending legal, governmental or regulatory actions, suits or proceedings that are required under the Securities Act to be described in the Prospectus and that are not so described and (B) there are no statutes, regulations or contracts and other documents that are required under the Securities Act to be filed as exhibits to the Registration Statement or described in the Prospectus and that have not been so filed or described.

14. The Company is not and, after giving effect to the offering and sale of the Shares and the application of the proceeds thereof as described in the Prospectus, will not be an “investment company” or an entity “controlled” by an “investment company” within the meaning of the Investment Company Act.

15. Such counsel shall also state that they have participated in conferences with representatives of the Company and with representatives of its independent accountants and counsel at which conferences the contents of the Registration Statement and the Prospectus and any amendment and supplement thereto and related matters were discussed and, although such counsel assume no responsibility for the accuracy, completeness or fairness of the Registration Statement, the Prospectus and any amendment or supplement thereto (except as expressly provided above), nothing has come to the attention of such counsel to cause such counsel to believe that the Registration Statement, at the time of its effective date (including the information, if any, deemed pursuant to Rule 430A to be part of the Registration Statement at the time of effectiveness), contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus or any amendment or supplement thereto as of its date and the Closing Date (or the Additional Closing Date, as the case may be) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (other than the financial statements and other financial information contained therein, as to which such counsel need express no belief).

In rendering such opinion, such counsel may rely as to matters of fact on certificates of responsible officers of the Company and public officials that are furnished to the Underwriters.

3

The opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation, described above shall be rendered to the Underwriters at the request of the Company and shall so state therein.

4

Exhibit B

[Form of Opinion of Intellectual Property Counsel for the Company]

We are familiar with the technology used by the Company in its business and the manner of its use thereof and have read the Registration Statement and the Prospectus, including particularly the portions of the Registration Statement and the Prospectus referring to patents, trade secrets, trademarks, service marks or other proprietary information or materials and:

1. We have no reason to believe that the Registration Statement or the Prospectus (A) contains any untrue statement of a material fact with respect to patents, trade secrets, trademarks, service marks or other proprietary information or materials owned or used by the Company, or the manner of its use thereof, or any allegation on the part of any person that the Company is infringing any patent rights, trade secrets, trademarks, service marks or other proprietary information or materials of any such person or (B) omits to state any material fact relating to patents, trade secrets, trademarks, service marks or other proprietary information or materials owned or used by the Company, or the manner of its use thereof, or any allegation of which we have knowledge, that is required to be stated in the Registration Statement or the Prospectus or is necessary to make the statements therein not misleading; and

2. To the best of our knowledge and except as set forth in the Prospectus under the captions “Risk factors—Failure to protect our intellectual property rights could adversely affect our business”, “Risk factors—If we are sued by third parties for alleged infringement of proprietary rights, our business and operating results could be harmed”, “Business—Intellectual property,” and “Business—Legal proceedings”, there are no legal or governmental proceedings pending relating to patent rights, trade secrets, trademarks, service marks or other proprietary information or materials of the Company, and to the best of our knowledge, no such proceedings are threatened or contemplated by governmental authorities or others.

Exhibit C

FORM OF LOCK-UP AGREEMENT

March 11, 2004

J.P. MORGAN SECURITIES INC.

Lehman Brothers Inc.

Pacific Crest Securities Inc.

As Representatives of the

Underwriters named in Schedule I

to the Underwriting Agreement referred

to below

c/o J.P. Morgan Securities Inc.

277 Park Avenue

New York, NY 10172

Re: Brightmail Incorporated Proposed Public Offering

Ladies and Gentlemen:

The undersigned understands that you, as Representatives of the several Underwriters, propose to enter into an Underwriting Agreement (the “Underwriting Agreement”) with Brightmail Incorporated, a California corporation (or a Delaware successor corporation) (the “Company”), providing for the proposed initial public offering (the “Public Offering”) by the several Underwriters named in Schedule I to the Underwriting Agreement (the “Underwriters”), of Common Stock, of the Company (the “Common Stock”). Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Underwriting Agreement.

In consideration of the Underwriters’ agreement to execute the Underwriting Agreement, and for other good and valuable consideration receipt of which is hereby acknowledged, the undersigned hereby agrees that, without the prior written consent of J.P. Morgan Securities Inc. on behalf of the Underwriters, the undersigned will not, during the period ending 180 days after the date of the final prospectus relating to the Public Offering (the “Prospectus”), (1) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock, of the Company or any securities convertible into or exercisable or exchangeable for Common Stock (including without limitation, Common Stock which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the Securities and Exchange Commission and securities which may be issued upon exercise of a stock option or warrant) or (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or such other securities, in

cash or otherwise. In addition, the undersigned agrees that, without the prior written consent of J.P. Morgan Securities Inc. on behalf of the Underwriters, it will not, during the period ending 180 days after the date of the Prospectus, make any demand for or exercise any right with respect to, the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock.

The foregoing sentence shall not apply to bona fide gifts, sales or other dispositions of shares of any class of the Company’s capital stock, in each case that are made exclusively between and among the undersigned or members of the undersigned’s family or affiliates of the undersigned, including, without limitation, its partners (if a partnership) or members (if a limited liability company) or transfers during an individual’s lifetime or on death by will or intestacy to his or her immediate family or to a trust the beneficiaries of which are exclusively the undersigned and/or a member or members of his or her immediate family; provided that it shall be a condition to any such transfer that the transferee/ donee agrees in writing to be bound by the terms of this Letter Agreement to the same extent as if the transferee/ donee were a party hereto. Except for shares purchased pursuant to a directed share program established in accordance with the Amended and Restated Investors’ Rights Agreement, dated July 20, 2000, between the Company and certain preferred shareholders, any shares of Common Stock acquired by the undersigned in the open market will not be subject to this Letter Agreement.

In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the registration or transfer of the securities described herein, are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this Letter Agreement.

It is understood that, if the Company notifies you that it does not intend to proceed with the Public Offering, if you determine not to proceed with the Public Offering, if the Underwriting Agreement does not become effective or if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Common Stock, the undersigned will be released from its obligations under this Letter Agreement.

The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Letter Agreement. All authority herein conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the successors, assigns, heirs or personal representatives of the undersigned.

This Letter Agreement shall lapse and become null and void if the Public Offering shall not have priced on or before November 15, 2004.

The undersigned understands that the Underwriters are entering into the Underwriting Agreement and proceeding with the Public Offering in reliance upon this Letter Agreement.

This Letter Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof.

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Very truly yours,
By:
	Name: Title:

Accepted as of the date first set forth above: J.P. MORGAN SECURITIES INC. Lehman Brothers Inc. Pacific Crest Securities Inc. Acting severally on behalf of themselves and the several Underwriters named in Schedule I to the Underwriting Agreement
By:	J.P. MORGAN SECURITIES INC.
By:
	Name: Title:

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EX-10.10

EXHIBIT 10.10

CONFIDENTIAL TREATMENT REQUESTED

AMENDED AND RESTATED

SYMANTEC SERVICE PROVIDER AGREEMENT

THIS AMENDED AND RESTATED SYMANTEC SERVICE PROVIDER AGREEMENT (The “Agreement”) is entered into by and between Symantec Corporation, a Delaware corporation maintaining its principal place of business at 20330 Stevens Creek Boulevard, Cupertino, California 95014, and Symantec Limited, an Irish corporation maintaining its principal place of business at Ballycoolin Industrial Park, Blanchardstown, Co. Dublin 15, Ireland (collectively, “Symantec”) and Brightmail, Inc., a California corporation maintaining its principal place of business at 301 Howard Street, Suite 1800, San Francisco, California 94105 (“Brightmail”) (the parties collectively referred to herein as the “Parties” and individually as a “Party”).

In consideration of the mutual covenants which follow, Symantec and Brightmail agree:

I. DEFINITIONS

The capitalized terms below shall have the following meanings when used in this Agreement:

“Affiliate(s)” shall mean any wholly owned, meaning one hundred percent (100%) stock ownership, subsidiary of an Authorized Sublicensee. Brightmail covenants that it will enforce on Symantec’s behalf, the terms of this Agreement as to all Affiliates under Existing Business agreements that Brightmail has in place on the Effective Date of this Agreement that do not meet this definition. All renewals or extensions of Existing Business agreements and all New Business must comply with this definition.

“Amended Date” means the date on which the original Agreement was amended and restated, which is March 28, 2003.

“Americas” means both North America and South America geographical regions.

“Application Service Providers or “ASP” means an entity that provides application services remotely for a fee or other consideration to its Authorized Users, none of whom are under the ASP’s immediate employ or the employ of any parent or subsidiary, except in the situation where the employee purchases or subscribes to the Service as an Authorized User outside of its normal business usage, but not in the case where the ASP utilizes its own email system internally as the default option for all employees, which scenario then requires the ASP to obtain an enterprise, internal use license from Symantec.

“AsiaPac/EMEA” means both the Asian Pacific rim countries and EMEA which consists of Europe, Middle East and Africa geographical regions.

“Authorized Users” means and is calculated as follows: (A) for all New Business and Internal Users, each and every (i) unique consumer or (ii) home office at a residential address, (iii) small businesses which are up to one hundred (100) Authorized Users, but not including any medium or large Enterprises of one hundred (100) or more Authorized Users, except where allowed for under the license grant Section III(2)(v), and (iv) each Internal User of an Authorized Sublicensee, per the license grant set forth in Section III(2)(vi), wherein in each of the foregoing, the Authorized User is either counted as an unique mailbox being scanned and protected using the Licensed Product, or as an email address, or an account that is subscribing to, the Licensed Product, which is active at any time during the Term, and which is as clearly indicated in the

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CONFIDENTIAL TREATMENT REQUESTED

reporting to Symantec, and (B) for all Existing Business and Enterprises, each and every unique e-mail box being scanned and protected using the Licensed Product, or as an email address, or an account that is subscribing to, the Licensed Product, which is active at any time during the Term or as determined by an alternative definition which was approved in writing by Symantec prior to the Effective Date and specifically detailed on Exhibit B.

“Authorized Sublicensee” means a firm, company, organization, or other third party that provides, for a fee or in certain situations, for no fee but pursuant to some other subscription arrangement or agreement, Internet services, online application hosting services, or similar on-line electronic services to its Authorized Users, which may include ISPs, ASPs, and wireless operators that offer Internet access and other similar Services to its own Authorized Users but only pursuant to its right to use the Licensed Products on such Authorized Sublicensee’s own servers subject to and in accordance with the terms of this Agreement. All Authorized Sublicensees are Service Providers. Authorized Sublicensee shall include its Affiliates.

“BMI Product” means Brightmail’s own Antivirus scanning and Antivirus cleaning components and analysis and filtering systems that enhance the integrity and security of electronic mail systems for the benefit of the Authorized Users.

“BMI Service” means the service provided by which consists of incorporating the Licensed Product with Brightmail’s own anti-virus product and providing support for the same which is for the ultimate benefit of the Authorized Users as provided by the Authorized Sublicensees and is run on servers owned or maintained by the Authorized Sublicensee.

“Converted Business” means those certain Authorized Sublicensees under existing contracts prior to the Effective Date, which are set forth in Exhibit F, and only consists of business wherein Brightmail generates thirty percent (30%) or less on the margin (or as otherwise specifically approved by an officer of Symantec in writing as indicated on Exhibit F) based upon the royalty schedule set forth in the Prior Agreement as of the Effective Date and which royalty schedule is restated and set forth in Exhibit A of this Agreement.

“Documentation” means written guides describing the use and operation of the Licensed Product provided by Symantec to Brightmail.

“Effective Date” means July 1, 2002.

“Enterprise” means individually and collectively those legal entities which are commercial businesses, other than ISPs, ASP and wireless operators, that would use the Licensed Product for its own internal use only, in conjunction with that entity’s internal business needs and are typically consisting of one hundred (100) or more Authorized Users.

“Existing Business” means (i) all Authorized Sublicensees that provide the Licensed Product to Authorized Users or (ii) all Enterprises, which were counted and defined as “Mailboxes” under an agreement pursuant to the Prior Agreement and existing prior to the Effective Date, to receive the BMI Services. Such existing agreements were entered into as a result of either a direct sale from Brightmail or one of its authorized Resellers, under the Prior Agreement and prior to the Effective Date of this Agreement. This definition excludes all Converted Business, New Business and all accounts listed in Exhibit B.

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CONFIDENTIAL TREATMENT REQUESTED

“First Date of Use” means the first date after the termination of the Evaluation Period if the Authorized Sublicensee accepts the BMI Service and commercially deploys the BMI Product which incorporates the Licensed Product.

“Internal User(s)” means for purposes of Section III(1), only those employees, consultants and/or contractors who work, and board members of Brightmail, located within the Territory, not to exceed a total of one twenty-five hundred (125) employees initially, with a twenty percent (20%) increase per every twelve (12) months of the Term, starting on the first anniversary date of the Term and for purposes of Section III(2)(vi) those employees, consultants and/or contractors who work for the Authorized Sublicensee, wherein in both cases, each Internal User is counted as a single Authorized User.

“Internet Service Provider” or “ISP” is an entity that provides Internet access and messaging services for a fee or other consideration to its Authorized Users, none of whom are under its immediate employ or the employ of any parent or subsidiary, except in the situation where the employee purchases or subscribes to the Service as an Authorized User outside of its normal business usage, but not in the case where the ISP utilizes its own email system internally as the default option for all employees, which scenario then requires the ISP to obtain an enterprise, internal use license from Symantec.

“Licensed Product” means the proprietary antivirus scanning and decomposition software code and program(s) as described in Exhibit A and all versions and updates thereto, and includes any corrections, bug fixes, enhancements, virus definitions, anti-virus rules or other modifications, in each case as made generally available by Symantec to its customers during the Term.

“Minimum Commitment” means both the Minimum Commitment Payments for Existing Business and the Minimum Commitment Payments for New Business, as outline in Exhibit A, under Section III.2.

“New Business” means and includes (i) all Authorized Sublicensees with agreements to provide the Licensed Product to their Authorized Users under an agreement with Brightmail or Reseller that is entered into on or after the Effective Date of this Agreement, (ii) all renewals, amendments that extend the time period of the agreement with the Authorized Sublicensees and extensions for Authorized Users and Authorized Sublicensees receiving BMI Services after the Effective Date, and (iii) all Converted Business.

“Payment(s)” means all amounts due under the terms of this Agreement, which include any Minimum Commitment Payments, any license and other fees related to the Licensed Products, as calculated based upon the number of Authorized Users and any other prices for the Licensed Product(s) and support, as indicated in Exhibit A hereto.

“Prior Agreement” means that agreement superseded by this Agreement, known as the Software Manufacturer License and Reseller Agreement by and between Symantec Corporation and Brightmail, Inc., effective April 3, 2000, as amended thereafter by Amendment One, with an effective date of July 31, 2000, Amendment Two with an effective date of August 31, 2000 and Amendment Three with an effective date of December 6, 2001.

“Reseller(s)” means those authorized resellers of Brightmail that have (i) entered into the standard reseller agreement with Brightmail, a copy of which is attached hereto as Exhibit G or an equivalent agreement with substantially the same terms as the copy attached hereto as Exhibit G, (ii) an agreement with Brightmail that requires the reseller to comply with same terms that Brightmail is required to comply with under this

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CONFIDENTIAL TREATMENT REQUESTED

Agreement, in all respects, including but not limited to, reporting and protection of Symantec’s intellectual property rights, and (iii) an agreement with Brightmail that names Symantec as a third party beneficiary; and is an authorized Reseller of Brightmail wherein Brightmail agrees to fully enforce all of the foregoing requirements set forth in this provision on Symantec’s behalf.

“Service” means the service provided by Authorized Sublicensees as a Service Provider to its Authorized Users, using the Licensed Product provided pursuant to Brightmail’s own service (as defined in the “BMI Service” definition) for the ultimate benefit of the Authorized Users and are run on servers owned or maintained by the Authorized Sublicensee.

“Service Provider” means a firm, company, or organization that provides, for a fee or in certain situations, for no fee but pursuant to some other subscription arrangement or agreement, Internet services, online application hosting services or similar on-line electronic services to its Authorized Users or other hardware or software products or applications and related support, which can be utilized therein. This definition excludes entities that are providing such Internet services solely to persons under the entity’s immediate employ or the employ of any parent, subsidiary, or affiliate firm, company, or organization of the entity. This definition specifically includes all franchise arrangements wherein franchisees are provided Services by franchisors.

“Term” means the time period in which the arrangement between the Parties is in place, as determined and defined in Section IX of the Agreement.

“Territory” means world-wide.

II. BRIGHTMAIL OBLIGATIONS

1. Other Products.

During the Term of this Agreement, Brightmail shall not market or sell as part of its BMI Service any products that provide anti-virus scanning or repair services other than those which are Symantec products or contain the Licensed Products.

2. Term or Subscription License, Reseller Rights.

Brightmail specifically represents and acknowledges that any use by any third party of any Licensed Product must be pursuant to the terms under the license grant set forth in Section III and the related Payment terms and cannot be handled as an actual sale of a perpetual license under a Reseller transaction.

3. No Further Sublicensing.

Brightmail may not authorize, and must contractually prohibit all Authorized Sublicensees and Authorized Users from further sublicensing the Licensed Products to another third party other than as specifically allowed in the grant of license Section III, below.

III. GRANT OF LICENSE AS SERVICE PROVIDER FOR SERVICES

Brightmail represents and warrants (and hereby acknowledges that the following licenses are conditioned upon the following representations and warranties) that Brightmail is, as of the Effective Date and during the Term of the Agreement will be, a Service Provider and a “Licensee” under the terms of this Agreement.

4

CONFIDENTIAL TREATMENT REQUESTED

1. Internal Use.

In accordance with the terms of this Agreement, Symantec grants to Brightmail, and Brightmail accepts from Symantec, a limited, nonexclusive, non-transferable license to use the object code version of the Licensed Product consisting of Norton Antivirus scanning and decomposition libraries for the Term of this Agreement only, without Payment, solely to provide the BMI Service to the Internal Users. This internal use license shall not be assignable; and any transfer is void in the event of an acquisition, merger, any type of change of control or sale of all or substantially all the assets of Brightmail, regardless of whether or not Symantec agrees to the assignment of this Agreement pursuant to Section X.11.e. hereof. Brightmail must report any usage over the allowed number of Internal Users and any failure to do so will result in this license being automatically rescinded and this license shall become void and null. Any usage above the allowed number of Internal Users will be at the then current Enterprise license rates set forth herein.

2. Service Provider Use.

In accordance with the terms of this Agreement, Symantec grants to Brightmail, and Brightmail accepts from Symantec, a limited, nonexclusive, non-transferable license to use the object code version of the Licensed Product consisting Norton Antivirus scanning and decomposition libraries for the Term of this Agreement only, for the purpose of sublicensing an integrated product with the BMI Product solely to provide the BMI Service through Authorized Sublicensees to Authorized Users located in the Territory as follows: (i) to create an antivirus module from the Norton Antivirus scanning and decomposition libraries, and upload this antivirus module, in executable form only, on Brightmail’s own servers to detect messages containing viruses and separate infected messages, (ii) to create an antivirus cleaning component that attempts to clean the infected messages using the Norton Antivirus scanning and decomposition libraries of the Licensed Product, (iii) obtain antivirus updates from Symantec Security Response ftp servers when available by automatic download into Brightmail’s BLOC, which can automatically test it for consistency and then encrypt and distribute the updates to the Authorized Sublicensees (all of the foregoing collectively referred to as the Licensed Product), (iv) directly or through Resellers, allow Authorized Sublicensees to upload the Licensed Product, in executable form only, onto its own servers to provide the Service, (v) as of the Effective Date, with Payments starting from the Amended Date, for a period of one (1) year from the Amended Date, unless renewed per the renewal terms in Section IX, allow Authorized Sublicensees to provide the Licensed Product to Enterprises where the Authorized Sublicensees hosts the email services of the Enterprise and Enterprise is not hosting any part of the Service and has no access to the actual Licensed Product software itself, and (vi) as of the Effective Date, with Payments starting from the Amended Date, for a period of one (1) year from the Amended Date, unless renewed per the renewal terms in Section IX, allow all Authorized Sublicensees to use the Licensed Products for the benefit of their Internal Users. The Service will be deemed to be provided in the countries in which the Authorized Sublicensee’s servers are located for purposes of Payments and Taxes under the terms of this Agreement. Brightmail is further granted a license to use the Documentation solely in its capacity as a Service Provider to provide the BMI Service to Authorized Sublicensees and to allow Authorized Sublicensees to use the Documentation to provide the Service to its own Authorized Users, including product support, as necessary. Brightmail may make copies of the Licensed Product and the Documentation solely for the purpose of providing the BMI Service to its Authorized Sublicensees, either directly or through Resellers, as authorized in this Section. Brightmail and the Authorized Sublicensees are authorized to run the Licensed Product on the mail STMP operating systems and platforms of Win2000 and Solaris, only. If and only if Symantec ever supports NAV API, Decomposer and the definition set on AIX or specific variations of Linux operating systems for SMTP gateways under Symantec’s standard support programs, then Brightmail will be given the right to leverage those environments. The foregoing shall only be distributed through a Reseller if the following conditions precedent are met: (i) the Reseller and Brightmail have executed a reseller agreement in a form substantially similar to the one attached hereto as Exhibit G with Brightmail, (ii) Brightmail has contractually obligated the Reseller to comply with the terms of this

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Agreement as they are applicable to Brightmail in regards to all sales of BMI Product which incorporate the Licensed Product, and that such Resellers have contractually agreed to and possess a copy of the redacted version of this Agreement, attached hereto as Exhibit H, which Brightmail agrees to so provide and document as part of a formal notice to the Reseller, (iii) Brightmail names Symantec as a third party beneficiary to its agreements with the Reseller and (iv) Brightmail hereby covenants and warrants to Symantec that it will enforce the terms of this Agreement on Symantec’s behalf as to such Reseller.

3. Evaluation Licenses.

In addition, Symantec grants Brightmail, a limited, nonexclusive, non-transferable license to sublicense during the Term of this Agreement, only, the Licensed Product as incorporated into the BMI Product to the Authorized Sublicensee, which will not cumulatively exceed ninety (90) days, which period starts on completion of installation of the Licensed Product for evaluation and ends on the designated ending date of evaluation which requires Brightmail to ensure that all use is completely terminated by Brightmail actively stopping the virus and rules definitions; and such time period again shall resume on the signing of a contract for the BMI Services and ending on the completion of the installation (the “Evaluation Period”). The evaluation of such BMI Product may be provided in a pre-production testing or production environment; provided that Brightmail operates the evaluation as follows: (i) a standard written evaluation license protecting the intellectual property rights and interests of all licensors (including Symantec) of the product provided under the Service is fully executed in each case, and (ii) such an evaluation agreement requires either the return of the evaluated software product or a signed certification of destruction under penalty of perjury of the evaluated software product, and (iii) continued use after the Evaluation Period is under a final agreement to receive the BMI Service having been executed and a final version of the BMI Product containing the Licensed Product is then provided for continued Service (the “Evaluation(s)”). At the end of the Evaluation Period, Brightmail will require Authorized Sublicensee to remove or Brightmail shall disable the BMI Product which incorporates Licensed Product in its entirety, unless such Authorized Sublicensee has agreed to purchase the BMI Service from Brightmail or a Reseller and Brightmail makes the applicable Payments to Symantec. If an Evaluation continues past the allowed Evaluation Period, Brightmail will be fully responsible for Payment to Symantec in accordance with Exhibit A. Brightmail shall not authorize more than one (1) Evaluation or any extended Evaluation Period per Authorized Sublicensee, per each version of the Licensed Product. Brightmail must provide Symantec with monthly reports which indicate the (i) date and identity of an Authorized Sublicensee who is under Evaluation, (ii) date and identity of an Authorized Sublicensee who has just ended an evaluation with a total of time such entity was under Evaluation, (iii) the date and identity of any Authorized Sublicensee who has signed an agreement for BMI Services and has the Licensed Product for installation and (iv) the date and identity any Authorized Sublicensee who has signed an agreement for BMI Services and has completed the Licensed Product installation and identify the total Evaluation Period applied to such Authorized Sublicensee (the “Evaluation Report”). Such Evaluation Report shall be sent to such address and person as Symantec provides via the notice provisions of this Agreement, which may change from time to time.

4. Restrictions Applicable to License Grants.

Symantec will deliver to Brightmail the non-serialized copy of the Licensed Product in an acceptable form. Brightmail is obligated to create a reliable tracking system for tracking and reporting to Symantec the worldwide usage of the Licensed Products by all Authorized Sublicensees and their provision of the Service to the Authorized Users, including those who are Authorized Users receiving the Service from Authorized Sublicensees of Brightmail that are Service Providers and receive a copy of the Licensed Product, and

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including all Evaluations and all distributions of the foregoing through Resellers. Such tracking system may consist of manual tracking of contracts and their reporting requirements, audit rights and other contractual provisions which Brightmail shall enforce. In accordance with the requirements of Exhibit E, Brightmail shall require the same reporting requirements set forth in this Agreement in its agreements with the Authorized Sublicensees and Resellers, and obtain reports from the Authorized Sublicensees and Resellers meeting the requirements of the terms of this Agreement and provide reports setting forth such information received from the Authorized Sublicensees and Resellers to Symantec.

Brightmail agrees that it will contractually bind the Authorized Sublicensees to (i) de-install the Licensed Product when: (a) the Authorized Sublicensee discontinues the Service using the Licensed Product, and/or (b) the related BMI Service agreement between Brightmail and the Authorized Sublicensee concerning the BMI Service is terminated for any reason whatsoever, and/or (c) this Agreement terminates and (ii) comply with the terms and conditions of this Agreement surrounding the use of the Licensed Product, including but not limited to, those provisions concerning the protection of Symantec’s proprietary rights in the Licensed Products, but not including terms concerning the pricing and license fees to be paid to Brightmail, which is set solely by Brightmail. Brightmail will enforce as to Authorized Sublicensees and Resellers, on Symantec’s behalf as a third party beneficiary, (i) the contractual provisions of this Agreement that indicate that Licensee must require contractual compliance of the Authorized Sublicensees and Reseller with certain terms of this Agreement and elsewhere in this Agreement which generally concern either the use of the Licensed Product, the protection of Symantec’s proprietary rights in the Licensed Product and such other intellectual property of Symantec, such as trademarks, but not concerning the terms concerning pricing charged by Brightmail, which is set solely by Brightmail, and (ii) those in the agreement Brightmail enters into with the Authorized Sublicensees and Resellers concerning the use of the Licensed Products to provide Services to its Authorized Users and of the use of the Licensed Product, which are the license grant language and all protective provisions which relate to the proprietary rights of the Licensed Product.

If Brightmail elects to distribute the Licensed Product via electronic download or physical media, or under such other arrangements as allowed herein where Brightmail gives access to the Licensed Product to an Authorized Sublicensee or the Licensed Product otherwise leaves the sole control of Brightmail, Brightmail must provide a secure infrastructure for the process and for the protection of Symantec’s intellectual property rights in the Licensed Product that meets the requirements listed herein, which requirements may be modified, from time to time by Symantec upon written notice to Brightmail, as well as any further guidelines that Symantec may provide to Brightmail from time to time. If at any time during the Term of this Agreement, Symantec determines Brightmail’s security policies are not sufficient to comply with the standards that Symantec requires or otherwise determines they are inadequate to protect Symantec’s intellectual property rights in the Licensed Products, Symantec will have the right to terminate Brightmail’s ability to distribute the Licensed Product in that manner. Brightmail agrees to comply with the following security guidelines, as modified and added to, from time to time:

1) All servers hosting the Licensed Products for download must be secure from both internal and external exploits and/or hackers and the servers must meet the requirements set forth in Exhibit C, which Symantec can change from time to time in its sole discretion, and which Symantec shall provide Brightmail notice of such changes pursuant to the notice provisions of this Agreement. Brightmail must contractually require Authorized Sublicensees and Resellers contractually, and enforce the same on Symantec’s behalf, to meet the foregoing requirements if they host the Licensed Product for download. Symantec agrees that Brightmail shall not be required to expend more than Ten Thousand Dollars ($10,000) annually to comply with the audit requirements set forth in Exhibit C.

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2) Brightmail must ensure each Authorized Sublicensee is actually under a contractual arrangement with Brightmail and that the access to the download of the BMI Product is protected by such other technology and other measures designed to prevent unauthorized downloads and copying of the Licensed Products.

3) When providing the Licensed Products to an Authorized Sublicensee via physical media, Brightmail must contractually require the Authorized Sublicensee receiving the physical media read and fully understand the applicable licensing usage terms. Brightmail is responsible for contractually requiring that Authorized Sublicensees and Resellers to not abuse Symantec’s licensing terms when receiving and using the Licensed Products in any form, which includes but is not limited to, unauthorized copying and/or distribution and enforce the foregoing on Symantec’s behalf. Brightmail has no authorization to duplicate its own CD-roms containing only the Licensed Product.

Brightmail is not allowed to transfer or otherwise sublicense the Licensed Product(s) to any Enterprise or third party, including but not limited to, any non ISP or non ASP entity that procure the Licensed Product for use in conjunction with the entities’ internal needs, other than as specifically provided for in this section of this Agreement. This Agreement specifically prohibits Brightmail from authorizing or to knowingly allowing any Authorized Sublicensee to utilize the Licensed Product(s) to provide Services as a Service Provider, except as specifically provided for in this Section III of the Agreement. All such licenses and authorizations provided by Brightmail under the terms of this Agreement must be obtained pursuant to a direct, written end user license agreement between Brightmail and the Authorized Sublicensee and/or a direct, written and fully executed agreement with the Authorized Sublicensee and/or Reseller, authorizing such use of the Licensed Product(s) as a Service Provider or End User or otherwise and requiring full compliance with the applicable terms of this Agreement, including but not limited to, those protecting Symantec’s intellectual property rights and meeting all the requirements set forth in Section III. Brightmail must promptly notify Symantec of the name of each Authorized Sublicensee, Enterprise and each Reseller in its reporting that is granted a license and also promptly notifies Symantec of any improper use of the Licensed Product(s) by any Authorized Sublicensee, Enterprise or Reseller.

IV. PRICES, PAYMENTS, AUDIT AND ORDER PROCEDURE

1. Tax Issues and Other Fees for Licensed Product(s) as Service Provider. The prices for the Licensed Products, and, therefore Payments, do not include any state or federal (U.S. or foreign government) taxes or fees. Brightmail is responsible for any and all such Payments due to Symantec and any and all taxes and fees imposed upon Brightmail. Except for Symantec’s income taxes, Brightmail agrees to pay any and all sales, use, value added, withholding, excise and similar taxes on Payments under this Agreement (the “Taxes”). Symantec will be responsible for its own income tax and fee obligations. If Brightmail claims an exemption from Taxes, Brightmail will provide to Symantec an acceptable copy of all documentation showing the legal exemption from such Taxes. If a foreign government requires Brightmail to withhold Taxes on Payments to Symantec, then Brightmail must: 1) provide Symantec with official receipts for reflecting the actual amount of Taxes withheld, which are adequate to meet the needs of Symantec, in order for Symantec to receive credit for such Taxes paid; and 2) minimize withholdings to the extent possible. The minimization requirement is to protect Symantec’s exposure to the limitation imposed by the Irish Commissioners of Revenue for such credit.

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2. Payment Terms.

a. By Brightmail as a Licensee and Service Provider. All Payments for Licensed Products are non-refundable and due regardless of Brightmail’s ability to collect from its Authorized Sublicensees and Resellers. Brightmail will receive an invoice for all Payments related to the Licensed Product(s). Payments are due when specified in Exhibit A regardless of receipt of invoice. If any Payment is not received within net thirty (30) calendar days after the end of each calendar quarter or in accordance with the terms of the Minimum Commitment Payment, by the specified Payment date in Exhibit A, Symantec may impose interest and late charges of one and one half percent (1-1/2%) per month until all Payments are current. Brightmail may charge its Authorized Sublicensees such license fees as it so determines for the BMI Services incorporating the Licensed Products. Brightmail must pay all Payments which represent license fees for the Licensed Products net thirty (30) days from the last Friday of the calendar quarter in arrears for BMI Services provided to the Authorized Sublicensees which are Existing Business, which timing does not apply to Minimum Commitments. The Payment and terms for the Bulk License, Minimum Commitment Payments and Existing Business are set forth in Exhibit A.

b. Currency and Place of Payment. All of the foregoing described Payments due to Symantec will be paid in the appropriate currency to the appropriate region. Payments will be made to Symantec Corporation in US Dollars, free of any withholding tax, currency control, or other restrictions for all transactions in the Americas. Payments will be to Symantec Limited in U.S. Dollars, free of any withholding tax, currency control, or other restrictions for all transactions in AsiaPac/EMEA. As to any portion of the Payments for the Bulk License which are for future Authorized Users and not actual Authorized Users, Brightmail shall pay the unknown Authorized Users portion as if they were Authorized Users within the Americas and pay in U.S. Dollars. All Payments and reports for the Americas region should be sent to Symantec Corporation, Revenue Manager, 20330 Stevens Creek Boulevard, Cupertino, CA 95014. All Payments and reports for the AsiaPac/EMEA region should be sent to Symantec Limited, Revenue Manager, Ballycoolin Industrial Park, Blanchardstown, Co. Dublin 15, Ireland.

3. Audit and Records.

Brightmail will maintain its records relating to the provision of BMI Services with the Licensed Products as a Service Provider for at least three (3) years after their creation. Brightmail agrees to permit an independent third party (“Auditor”), to be mutually agreed upon by both parties, to examine such records upon reasonable notice, but not more often than once every twelve (12) months, during all normal business hours during the Term of this Agreement and for twelve (12) months after expiration or any termination of this Agreement. Symantec (or an independent third party representative), upon reasonable written notice of no less than ten (10) calendar days, will have the right to conduct an audit of Brightmail’s books of account, records, contracts or other information which relate to this Agreement and the Licensed Products, in order to verify compliance with this Agreement. Brightmail will immediately pay any overdue Payments revealed by such audit(s). Symantec will bear the costs of the audit; provided, however, if the audit reveals overdue Payments in excess of five percent (5%) of the Payments owed for any six (6) month period, Brightmail will pay the costs of such audits(s). All information obtained by Symantec (or its independent third party representative) during any such audit will be confidential and Symantec (and its independent third party representatives) will keep it confidential, except to the extent it is reasonably necessary to disclose such information to enforce this Agreement or as otherwise required by law.

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V. NOTIFICATIONS AND REPORTING

1. Notification.

Brightmail will notify Symantec in writing of any claim or proceeding involving Licensed Product(s) and/or the BMI Service within ten (10) days after Brightmail learns of such claim or proceeding. Brightmail will report promptly to Symantec all claimed or suspected product defects in the Licensed Product. Brightmail will also notify Symantec in writing not more than thirty (30) days after any change in control of Brightmail or any transfer of more than twenty-five percent (25%) of Brightmail’s voting control or a transfer of substantially all its assets.

2. Reporting.

At the end of every calendar quarter, Brightmail agrees to provide Symantec with a preliminary quarterly report in the same format as the Regional Report, as detailed below, for the estimated total number of Authorized Users as totaled on the last Friday of the calendar quarter under (i) New Business, with a break out of the subtotal for the Converted Business and Evaluations, and (ii) Existing Business with a break out for the subtotal for Enterprises. In addition, Brightmail agrees to furnish Symantec with a final total quarterly “sell through” report in an electronic format but in Excel only, meeting all the content and format requirements set forth in Exhibit E, attached hereto and incorporated by reference: (i) by Authorized Sublicensee, showing the names of each Authorized Sublicensee, and if through a Reseller, categorized by Reseller with the name and address of each Reseller, and the number of Authorized Users for each Authorized Sublicensee; (ii) reporting each geographic country and by region which consists of the (a) Americas for Symantec Corporation, and (b) AsiaPac/EMEA for Symantec Limited; (iii) the total number of Authorized Users as totaled on the last Friday of the calendar quarter shall also be set forth under (a) New Business, with a break out of the subtotal for the Converted Business and Evaluations, and (b) Existing Business per Authorized Sublicensee and with a break out for the subtotal of Enterprises per Enterprise; and (iv) the total of Internal Users (the “Regional Report”). The final Regional Report is due no later than thirty (30) calendar days from the end of the last Friday of the previous calendar quarter. While Brightmail shall require Authorized Sublicensees and Resellers to comply with the Regional Report requirements in all New Business and all extensions or renewals of Existing Businesses, Brightmail shall use reasonable commercial efforts to obtain the by country reporting for the Regional Report for all Existing Business.

VI. SUPPORT

Brightmail shall provide all support to the (i) Authorized Sublicensees and require the Authorized Sublicensees to provide support to their own Authorized Users (including Evaluations), and (ii) Internal Users for Licensed Products and under no condition shall Symantec take any calls from any of the foregoing. Symantec will refer the Authorized Users back to the Authorized Sublicensee and refer the Authorized Sublicensees to Brightmail for support at (1-800-453-2577). Symantec shall provide separate support to Brightmail pursuant to a separate agreement.

VII. NON-DISCLOSURE

1. Agreement.

Both Parties covenants and agrees not to disclose the terms of this Agreement or any other details as to its relationship with the other to any third party without Symantec’s prior written consent.

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2. Confidential Information.

a. The Parties acknowledge that in the course of performing their obligations hereunder each may receive information (“Information”), which is confidential and proprietary to the other. Such Information includes non-public information or materials, including without limitation written or printed documents and computer disks or tapes, whether machine or user readable containing such information, that: (i) relates to released or unreleased Symantec software products or processes, including updates, patches, bug fixes or other modifications; the marketing or promotion of any Licensed Product or Symantec product or BMI Product; and either Party’s business policies or practices, (ii) is disclosed by one Party to the other in tangible or written form and clearly marked “Confidential” (or with a similar proprietary legend), or is of a nature that a reasonable business person would know or suspect it is of a confidential nature or (iii) is disclosed by one Party to the other in confidence in connection with this Agreement and the Parties’ performance hereunder.

b. Information does not include information or materials that the receiving Party can demonstrate (i) is on the date hereof, or hereafter becomes, through no act or failure to act or violation of this Agreement on the part of the receiving Party, generally known or available to the public, (ii) was known or possessed by the receiving Party before its receipt from the disclosing Party, (iii) is hereafter rightfully obtained by the receiving Party from a third party, without breach of any obligation to the disclosing Party, or (iv) is independently developed by the receiving Party, without use of or reference to the Information, by persons who had no access to the Information.

c. Each Party covenants and agrees that neither it nor its agents, employees, officers, directors or representatives will (i) use any of the Information except in performance of this Agreement or (ii) disclose any Information to third parties other than Authorized Sublicensees and/or Resellers, as necessary to sublicense the Licensed Product from the Effective Date of this Agreement and during the Term and for a period of five (5) years from the termination of this Agreement, whether terminated by Symantec or by Brightmail, unless required to be disclosed by law or a judicial authority. Each Party further covenants and agrees to protect the Information obtained from the other with the same degree of care as it uses to protect its own confidential information of like importance, but in no event less than reasonable care. The receiving Party may disclose Information only to its employees and contractors having a “need-to-know” for the purposes of this Agreement. The receiving Party will notify and inform those employees and contractors of the receiving Party’s obligations regarding use of Information and will obtain or have obtained from its employees and contractors agreements requiring them to comply with these obligations. Each Party will provide notice to the other Party immediately after learning of or having reason to suspect a breach of any of the confidentiality obligations set forth in this Agreement.

IX. TERM OF AGREEMENT

This Term of this Agreement shall commence on the Effective Date and shall continue for a period of three (3) years (the “Term”). This Agreement shall automatically expire at the end of the Term and nothing contained herein shall be interpreted as requiring either Party to renew or extend this Agreement, and neither Party expects this Agreement to be renewed; provided, however, that this Agreement may be terminated prior to the expiration of its stated Term as set forth below. This Agreement may be extended by an amendment extending the Term and updating the Price, which is signed by the authorized signatory of each Party. There are limited Run Off Periods provided for in this Agreement and therefore, Brightmail is advised to negotiate its renewal and extension of the Term, pursuant to an amendment, in sufficient advance of its needs for its Authorized Sublicensees. The license grants in Section III(2)(v) & (vi) are for one (1) year from the

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Amended Date, and shall automatically renew unless cancelled by Licensee, which can only be done by providing Symantec a written notice of non-renewal which must be received no later than March 26, 2004; and thereafter, on an annual basis, Brightmail may provide a notice of non-renewal to Symantec no later than by the last Friday of the calendar quarter.

X. TERMS AND CONDITIONS

1. Restrictions on Use.

a. Allowed Business Use of the Licensed Products. Brightmail covenants and agrees to use the Licensed Product only with BMI Products as part of the BMI Services as provided to Authorized Sublicensee for making the Service available to Authorized Users in accordance with the terms of the Agreement. Brightmail shall not permit any person or party other than Authorized Sublicensees to use the Licensed Product; provided, however, that Brightmail may use the Licensed Product internally for testing purposes and to provide support to Authorized Sublicensees.

b. Modifications, Reverse Engineering. Brightmail covenants and agrees that only Symantec shall have the right to alter, maintain, enhance or otherwise modify the Licensed Products, and all of the related Documentation, except as specifically provided for in this Agreement. Brightmail shall not disassemble, decompile, decrypt, reverse engineer, or create derivative works based upon, or make any attempt to discover the source code of, the Licensed Product or any portion thereof. Brightmail shall not adapt, modify, translate, distribute, duplicate, copy, transfer possession of, loan, lease, or resell for profit the Licensed Product except as specifically provided for in this Agreement. Brightmail shall immediately report to Symantec and halt unauthorized copying, use, distribution, installation, or transfer of possession of the Licensed Product, by any person or entity of which Brightmail has knowledge. Prior to disposing of any media or apparatus containing the Licensed Product or any part thereof, Brightmail will ensure that any Licensed Product contained on such media or stored in such apparatus has been completely erased or otherwise destroyed.

c. Protection of Information. Brightmail acknowledges that the Licensed Product and all related Documentation are proprietary to Symantec and comprise (i) works of original authorship, including compiled information containing Symantec’s selection, arrangement, and co-ordination and expression of such information or pre-existing material it has created, gathered or assembled, (ii) confidential trade secret information, and (iii) information that has been created, developed and maintained by Symantec at great expense of time and money such that misappropriation or unauthorized use by others would unfairly and irreparably harm Symantec. In addition to Brightmail’s obligations outlined in Section VII, Brightmail shall not commit or permit any act or omission that would impair Symantec’s proprietary and intellectual property rights in the Licensed Products, and all of the Documentation.

d. Trademarks, Trade Names and Copyrights.

(i) Trademark Use and Co-branding Guidelines. At all times in every advertisement, promotion and branding of the BMI Service, Brightmail will do the following and contractually require the Authorized Sublicensee to do the same in regards to the Service, and enforce the same on Symantec’s behalf, to do the following: (i) use either or both: (a) the trademark “Powered by Symantec” including any related logos, or (b) the Symantec logos and trademarks associated with the Licensed Products; and (ii) ensure that all statements (written or oral) concerning the Licensed Product shall be strictly in accordance with the Documentation or otherwise be approved by Symantec in writing prior to distribution in any form.

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Brightmail’s use, (and Brightmail shall contractually require and enforce the same with the Authorized Sublicensee’s use) the of such trademarks and logos will be in accordance with Symantec’s trademark policies and usage guidelines in effect from time to time. Brightmail is obligated to comply with the following and to contractually require its Authorized Sublicensees to do the following, and shall name Symantec as a third party beneficiary of these contractual requirements and enforce the following provisions on behalf of Symantec: (i) Any co-branding of products, marketing materials or other communications that refer to the functionality or the existence of the Licensed Product shall state “Powered by Symantec” and be subject to the co-branding guidelines that Symantec provides to Brightmail, as modified, from time to time, in Symantec’s sole discretion, as well as Symantec’s general trademark guidelines, attached hereto as Exhibit D, both as modified, from time to time, in Symantec’s sole discretion; provided that any Authorized Sublicensee shall have up to thirty (30) business days after receipt by Brightmail of updated guidelines to update any marketing materials and to cease distributing marketing materials that are no longer in compliance with such new guidelines, (ii) the initial user interface in the version of the Brightmail’s software offering, provided as part of its BMI Service (or Service in reference to an Authorized Sublicensee), must contain the words “Powered by Symantec” and the wording “Powered by Symantec” will be present in the footer of all warning pages or messages concerning notice of virus detection in all versions of Brightmail’s software offering as part of the BMI Service (or Service in reference to an Authorized Sublicensee), and (iii) Authorized Sublicensee shall not make any false representations as to the relationship of Symantec to the Authorized Sublicensee, concerning the Licensed Product, or concerning the source of the Services offered by the Authorized Sublicensee. Further, if any Authorized Sublicensee has any concerns about compliance, Brightmail should inform them that they may contact Symantec’s Legal Department directly to obtain review and approval. Notwithstanding the foregoing, Brightmail and its Authorized Sublicensees may do general marketing using common industry descriptive words that indicate the existence of virus detection, but which are general references to the Service and/or BMI Service and do not mention or otherwise reference the components, features or technical aspects of the Licensed Products, such as, but not limited to, “Internet services with virus detection”, “e-mail virus scanning”, “e-mail virus filter services” and/or “e-mail protection and such others as fall within the foregoing requirements, without including the Symantec logos and trademarks, as required above. Brightmail agrees and acknowledges that no description of any BMI Service provided or offered by Brightmail or Service by its Authorized Sublicensees shall in any sense mislead the consumer into believing that the Licensed Product portion of such BMI Service and/or Service is created or owned by any party other than Symantec and that Symantec shall make the final determination of such on any such issues, in its sole discretion. Brightmail shall contractually require its Authorized Sublicensees to comply with all of the foregoing obligations and name Symantec as a third party beneficiary of the contracts it enters into with Authorized Sublicensee. Symantec shall solely control all litigation matters and related decisions, and be responsible for such costs, in regards to the subject matter of this provision.

(ii) No Rights in Trademarks or Copyrights. Brightmail has paid no consideration for the use of Symantec’s trademarks, logos, copyrights, trade names or designations, and nothing contained in this Agreement will give Brightmail any interest in any of the foregoing. Brightmail acknowledges that Symantec owns and retains all copyrights and other proprietary rights in all Licensed Products and documentation including patent, copyright, trade secret, trademark and other proprietary rights, in and to the Licensed Products and the Documentation and any corrections, bug fixes, enhancements, updates or other modifications, including custom modifications, to the Licensed Products, whether made by Symantec or any third party, and Brightmail shall have no right, title or interest in such proprietary rights. Brightmail agrees that it will not at any time during or after this Agreement assert or claim any interest in or do anything that may adversely affect the validity or enforceability of any trademark, trade name, copyright or logo belonging to or licensed to Symantec (including, without limitation, any act, or assistance to any act, which may infringe

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or lead to the infringement of any copyright in the Licensed Products). Brightmail agrees not to attach any additional trademarks, logos or trade designations to Licensed Product or BMI Products which violate any terms of this Agreement. Brightmail further agrees not to affix any Symantec trademark, logo or trade name to any non-Symantec product and/or non-Symantec service, except as provided for in this Agreement. Brightmail shall contractually require the Authorized Sublicensees to comply with the foregoing requirements, and enforce the same on Symantec’s behalf.

(ii) Obligation to Protect. Brightmail agrees to use reasonable efforts to protect Symantec’s proprietary rights and to cooperate without charge in Symantec’s efforts to protect its proprietary rights. Brightmail agrees to notify Symantec of any known or suspected breach of Symantec’s proprietary rights that comes to Brightmail’s attention.

(iii) Transfers. Except as specifically provided for under the terms of this Agreement, under no circumstances shall Brightmail sell, license, publish, distribute, or otherwise transfer to a third party the Licensed Product or the Documentation or any copy thereof, in whole or in part, without Symantec’s prior written consent.

e. Obligation to Use Most Current Version of Licensed Product. Brightmail acknowledges that Symantec may, from time to time, release updated versions of the Licensed Product. Brightmail covenants and agrees, within thirty (30) days after written notification by Symantec of the release of any such updated version for the operating platform(s) utilized by Brightmail, to upgrade to, and use exclusively, the updated version of the Licensed Product in its BMI Product to provide the BMI Service and provide the updated BMI Product to the Resellers. Brightmail will use commercially reasonable efforts to notify and request its Authorized Sublicensees to use the latest version of the Licensed Product as it is incorporated into the BMI Product. Brightmail acknowledges that it understands that support services are only available to customers of Symantec who have purchased support and are on a particular version of the Licensed Product for a time period of one (1) full year after the date of the next “Major Release” which is defined as any new version of the Licensed Product that contains features or capabilities that are different from the current version (typically denoted with a new version number in front of the decimal point such as 5.0, 6.0, 7.0, or a year number such as 2001, 2002, 2003 but it could be designated otherwise) as opposed to an in-line update or modification or patch that is designed only to improve the current version of the Licensed Product, and that Symantec licenses to its licensees and customers generally for a fee as opposed to the free update, modification or patch. Brightmail agrees that the support services will end one (1) year after the next Major Release of the Licensed Product and thereafter in order to obtain support services, Brightmail must upgrade to the most current version of the Licensed Product, (i.e. the Major Release) as outlined above.

f. Obligation to Update. If the Licensed Product requires updates such as new virus definitions, new content filtering lists or new rules of any type, Brightmail and Authorized Sublicensee shall update its copies of the Licensed Product used to provide the BMI Service and/or Service, respectively, at least once daily.

2. Disclaimer of Warranties; Limitation of Liability and Related Matters.

a. Special Warranty and General Disclaimer of Warranties. SYMANTEC WARRANTS THAT THE LICENSED PRODUCT WILL SUBSTANTIALLY COMPLY WITH THE SPECIFICATIONS SET FORTH IN THE CURRENT APPLICABLE DOCUMENTATION PUBLISHED GENERALLY WITH RESPECT THEREOF. IF AT ANY TIME DURING THE TERM OF THIS AGREEMENT, BRIGHTMAIL CAN SHOW A DEFECT IN THE LICENSED PRODUCT SUCH THAT THE LICENSED PRODUCT DOES

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NOT SUBSTANTIALLY COMPLY WITH THE DOCUMENTATION, SYMANTEC SHALL WITHIN THE TIME PERIOD AGREED BETWEEN THE PARTIES, OR IF NO TIME PERIOD, WITHIN A REASONABLE TIME, EITHER REMEDY THE DEFECT OR REPLACE THE LICENSED PRODUCT, WHICH CHOICE IS IN SYMANTEC’S SOLE DISCRETION AND WHICH IS THE SOLE REMEDY FOR THIS BREACH OF WARRANTY. IF SYMANTEC HAS PROVIDED IN ADVANCE ANY BETA OR OTHER TEST VERSIONS OF THE LICENSED PRODUCT TO BRIGHTMAIL AND HAS NOT AUTHORIZED BRIGHTMAIL TO RELEASE SUCH AS FINAL LICENSED PRODUCT, THEN THIS WARRANTY IS VOID IF BRIGHTMAIL RELEASES ANY BMI PRODUCT CONTAINING SUCH LICENSED PRODUCT THAT SYMANTEC HAS NOT GENERALLY AND PUBLICLY RELEASED TO ITS OTHER CUSTOMERS. SYMANTEC MAKES NO WARRANTY THAT ALL ERRORS OR FAILURES WILL BE CORRECTED.

b. Limited Liability. EXCEPT AS SET FORTH ABOVE, THE LICENSED PRODUCT AND DOCUMENTATION ARE PROVIDED “AS IS” AND WITHOUT WARRANTY OF ANY KIND. ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED, ARE DISCLAIMED AND EXCLUDED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND INFRINGEMENT. THE ENTIRE RISK AS TO THE QUALITY AND PERFORMANCE OF LICENSED PRODUCT IS WITH BRIGHTMAIL.

c. No Warranty. Brightmail will make no warranty, guarantee or representation, whether written or oral, on Symantec’s behalf.

d. Breach of Warranty. If Symantec is not able to cure any breach of the warranty section set forth in subsection (a) above within the allowed cure period set forth in the termination provisions of this Agreement, then Brightmail may terminate this Agreement.

3. Limitation of Liability.

NEITHER PARTY SHALL BE LIABLE TO THE OTHER OR ANY OTHER PERSON OR ENTITY FOR INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES OR THE LOSS OF ANTICIPATED PROFITS ARISING FROM ANY PERFORMANCE UNDER, OR BREACH OF, THIS AGREEMENT EVEN IF NOTICE IS GIVEN OF THE POSSIBILITY OF SUCH DAMAGES. IN ADDITION, THE LIABILITY OF SYMANTEC FOR ANY DAMAGES RELATING TO ANY LICENSED PRODUCT SHALL BE LIMITED AS SET FORTH HEREIN. SYMANTEC’S LIABILITY HEREUNDER OTHER THAN RELATING TO AMOUNTS DUE UNDER THE INDEMNITY PROVISIONS SET FORTH IN SECTION 5A, SHALL BE LIMITED TO THE TOTAL PAYMENTS RECEIVED FROM BRIGHTMAIL PURSUANT TO THIS AGREEMENT DURING THE TWELVE (12) MONTHS PRIOR TO THE EVENT GIVING RISE TO SUCH LIABILITY. IN ADDITION, THE TOTAL LIABILITY OF BRIGHTMAIL FOR ANY DAMAGES DUE UNDER THIS AGREEMENT, BUT NOT INCLUDING RELATING TO ANY PAYMENT OBLIGATIONS OR PROVISIONS, AMOUNTS DUE UNDER THE INDEMNITY PROVISIONS SET FORTH IN SECTIONS 5A AND 5 B BELOW, AND DAMAGES FOR ANY BREACH OF THE GRANT OF LICENSES PROVISIONS SET FORTH IN SECTION III, SHALL BE LIMITED TO THE TOTAL OF SEVEN MILLION DOLLARS.

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CONFIDENTIAL TREATMENT REQUESTED

4. Compliance with Law.

Brightmail covenants and agrees to comply with all applicable international, national, state, regional and local laws and regulations in its performance hereunder and in any of its dealings with its Resellers, Authorized Sublicensees and Authorized Users with respect to the BMI Service. Symantec covenants and agrees to comply with all applicable international, national, state, regional and local laws and regulations in its performance hereunder and in any of its dealings with Brightmail.

5. Indemnification.

(A) Indemnification by Symantec. Notwithstanding anything contained herein to the contrary, Symantec hereby indemnifies, defends, and holds Brightmail and its officers, employees, board members, and contractors harmless from and against any and all third party claims, actions, or demands alleging that the Licensed Product and/or any update provided by Symantec infringes any patent, copyright, trademark, trade secret or other intellectual property right of any third party. Subject to Symantec receiving prompt written notice from Brightmail of any actual or threatened claim, and further subject to Brightmail providing Symantec with complete control of the settlement and defense thereof, Symantec shall pay resulting costs, damage awards, legal fees finally awarded, and any settlement amounts in such actions which are attributable to such claims. Symantec shall have no liability to Brightmail for any claim to the extent based upon modification of the Licensed Product by Brightmail or combination of the Licensed Product with the Brightmail’s own software solution or any other software or hardware not provided by Symantec, approved by Symantec for combination with the Licensed Product, or otherwise identified in the Symantec Documentation as intended for combination with the Licensed Product (if the claim would not survive but for the modification or combination). In addition, should the Licensed Product become, or is likely to become, in Symantec’s reasonable opinion, exercising sound commercial judgment, the subject of a claim of intellectual property infringement then Brightmail shall permit Symantec to replace or modify the Licensed Product so as to avoid infringement, or to procure the right for Brightmail to continue use of such items. If neither of such alternatives is reasonably possible, the infringing items shall be returned to Symantec and Symantec shall refund to Brightmail all amounts paid by Brightmail in excess of actual usage.

(B) Indemnification by Brightmail. Notwithstanding anything contained herein to the contrary, Brightmail hereby indemnifies, defends, and holds Symantec and its officers, employees, board members, and contractors harmless from and against any and all third party claims, actions, or demands arising out of this Agreement that: (i) allege that the BMI Service infringes any patent, copyright, trademark, trade secret or other intellectual property right of any third party, however excluding any and all claims based on the Licensed Product (but including claims to the extent based upon Brightmail’s modification or unapproved combination of the Licensed Product with third party products, solely to the extent such claim would not survive but for the modification or combination); or (ii) to the extent that they are due to any unauthorized warranty made by Brightmail or any Authorized Sublicensee regarding the Licensed Product. Subject to Brightmail receiving prompt written notice from Symantec of any actual or threatened claim, and further subject to Symantec providing Brightmail with complete control of the settlement and defense thereof, Brightmail shall pay resulting costs, damage awards, legal fees finally awarded, and any settlement amounts in such actions which are attributable to such claims.

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6. Termination.

a. For Cause Termination. Either Party may terminate this Agreement at any time in the event that the other Party fails to perform any obligation, warranty, duty or responsibility or is in default with respect to any term or condition under this Agreement and such failure or default continues unremedied for a period of thirty (30) days (fifteen (15)) days in case of failure to make Payment) after notice of failure or default from the other Party (a “For Cause Termination”) which termination shall be effective immediately after the time period to cure the default as set forth in this section has expired if the nonbreaching party has affirmatively elected to terminate the Agreement. If the resolution of the breach requires more than thirty (30) days, the breaching Party may request the other Party for additional time to remedy the breach, and both Parties agree to discuss such an extension in good faith.

b. Automatic Termination. This Agreement terminates automatically, with no further act or action of either Party, if a receiver is appointed for either Party or over either Party’s property, either Party makes an assignment for the benefit of its creditors, any proceedings are commenced by, for or against either Party under any bankruptcy, insolvency or debtor’s relief law, or either Party is liquidated or dissolved. Notwithstanding the foregoing, if Brightmail is reorganizing its entity under the bankruptcy laws and is not in breach of this Agreement, the Agreement shall not automatically terminate. If Brightmail has any change in the management or control of, or any transfer of more than twenty-five percent (25%) of Brightmail’s voting control or a transfer of substantially all its assets to a competitor of Symantec, which Symantec determines in it sole discretion is a competitor, then this Agreement shall automatically terminate on the date of a notice by Symantec of such decision as provided in writing by Symantec to Brightmail. The foregoing shall be referred to hereafter as “Automatic Termination”.

c. Disruption to Symantec’s Small Business Revenue. Symantec may terminate the Agreement, but not sooner than six (6) months from the Effective Date, if Symantec determines in its sole discretion, that Brightmail has entered into any agreement that disrupts Symantec’s anti virus small business revenue.

d. Effect of Termination.

(i) Effect on Payments and Licenses. Upon any termination of any kind and any expiration of the Term, no refunds of Payments due and/or Minimum Commitment Payments will be made to Brightmail. Further, the license granted under this Agreement to use the Licensed Product and the Documentation is immediately revoked other than subject to any applicable Run Off Periods.

(ii) Obligations of Brightmail as to Licensed Products. Brightmail, within ten (10) days, shall, at Symantec’s option, either destroy all licensed copies of the Licensed Product and Documentation, and all backups, or return them to Symantec, and certify in writing by an authorized officer of Brightmail that all copies have been destroyed and/or returned. In each instance where Brightmail has distributed the Licensed Product and/or Documentation to Authorized Sublicensees and Resellers, then Brightmail shall contractually require and enforce the requirement that the Authorized Sublicensees and Resellers destroy the Licensed Product and Documentation, and all backups, or return them to Brightmail, and certify in writing by an authorized officer of Brightmail that all copies have been destroyed and/or returned and/or that Brightmail has by way of its technology effectively prevented all further use of the Licensed Product. This obligation shall survive the termination of this Agreement.

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CONFIDENTIAL TREATMENT REQUESTED

(iii) Outstanding Invoices. The due dates of all outstanding invoices to Brightmail for Licensed Product(s) automatically will be accelerated if the termination is based on a For Cause Termination caused by Brightmail or an Automatic Termination triggered by conduct of Brightmail, so they become due and payable by immediate wire transfer on the effective date of termination or expiration, even if longer terms had been provided previously, except in the case that Symantec terminates for any disruption to its small business revenue pursuant to the terms set forth under Section X.6.c.

(iv) Cease Use of Marks and Run Off Period. Brightmail will forthwith cease, and cause each of its Authorized Sublicensees and Resellers to also cease, all use of all Symantec trademarks, and will not thereafter use any mark which is confusingly similar to any trademark associated with any Licensed Product(s) with the BMI Products or BMI Service or any other products or services and contractually require the Authorized Sublicensees to do the same and also with regard to its Service and enforce the same on Symantec’s behalf. Notwithstanding the foregoing, if the Term of this Agreement expires and is not renewed, or there is any termination other than (i) an Automatic Termination for bankruptcy only or (ii) a For Cause Termination caused by Brightmail, then and only then, pursuant to the provisions set forth in this Section, Brightmail may continue for up to three (3) months after termination of this Agreement to sublicense the Licensed Product under existing agreements with Authorized Sublicensees and conditioned on the continuation of Brightmail making any Payments due to Symantec for such period of additional time, per the terms of this Agreement (the “Run Off Period”). The foregoing Run Off Period applies only if Symantec is able to deliver a functional Licensed Product and related virus definitions which shall mean for purposes of this Agreement, that the Licensed Product and the delivery of virus definitions meet the special warranty provisions set forth in this Agreement. So provided that a functional Licensed Product and virus definitions are available and Payments are current, and that no other breaches of the Agreement exist, Symantec agrees that the Run Off Period is automatically extended for another three (3) months unless Brightmail indicates it no longer needs the Run Off Period. Thereafter, given the same conditions are met again, in that a functional Licensed Product and virus definitions are available, Payments are current, and no other breach of the Agreement exists, then Symantec agrees that the Run Off Period automatically renews for yet another three (3) months, providing no more than a total of nine (9) months of Run Off Period unless Brightmail indicates it no longer needs the Run Off Period. Brightmail agrees that support is only available in any Run Off Period to Brightmail if Symantec is then supporting the Licensed Product and Brightmail is current on its support payments, if any. Brightmail agrees that the Payment obligations continue to apply to all Run Off Periods. Upon the termination of this Agreement, the Licensed Product will be promptly destroyed by Brightmail, if so approved in writing by Symantec and Brightmail will then will certify to Symantec in writing the destruction of such Licensed Product in accordance with the terms and conditions set forth in writing pursuant to which Symantec so approved such destruction. If Symantec does not approve destruction, Brightmail must return the Licensed Product at its own expense.

e. Limitation of Liability for Termination. Symantec shall not be liable to Brightmail on account of termination or expiration of this Agreement for reimbursement or damages for loss of goodwill, prospective profits or anticipated orders, or on account of any expenditures, investments, leases or commitments made by Brightmail based upon or growing out of such termination or expiration. Brightmail acknowledges and agrees that; (i) Brightmail has no expectation and has received no assurances that its business relationship with Symantec will continue beyond the stated Term of this Agreement or its earlier termination in accordance with this clause other than for any applicable Run Off Periods, that any investment by Brightmail in the promotion of the BMI Service, BMI Products or the Licensed Products will be recovered or recouped, or that Brightmail shall obtain any anticipated amount of profits by virtue of this Agreement; and (ii) Brightmail shall not have or acquire by virtue of this Agreement or otherwise any vested, proprietary or

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other right in the promotion of the BMI Service or in any goodwill created by its efforts hereunder. The Parties acknowledge that this clause has been included as a material inducement for Symantec to enter into this Agreement and that Symantec would not have entered into this Agreement but for the limitations of liability as set forth herein.

9. Survival of Warranties and Covenants.

The warranties, covenants and agreements contained in this Agreement, which by their nature should survive the termination of this Agreement, shall survive the termination of this Agreement and remain in full force and effect.

10. Relationship of the Parties.

Brightmail is a customer of Symantec, and will not have, and will not represent that it has, any power, right or authority to bind Symantec, or to assume or create any obligation or responsibility express or implied, on behalf of Symantec or in Symantec’s name. Nothing stated in this Agreement shall be construed as making partners of Brightmail and Symantec, or as creating the relationships of employer/employee, franchisor/franchisee, or principal/agent between the Parties. In all matters relating to this Agreement, neither Brightmail nor its employees or agents or Resellers are, or shall act as, employees of Symantec within the meaning or application of any obligations or liabilities to Symantec by reason of an employment relationship. Brightmail shall make no warranty, guarantee or representation, whether written or oral, on Symantec’s behalf, about the Licensed Product, the BMI Service, BMI Product or otherwise. Brightmail shall require, and enforce on Symantec’s behalf, that the agreements it has with the Authorized Sublicensee and/or Authorized Users and the agreements that the Authorized Sublicensees have with the Authorized Users, pursuant to which they receive the Service, contain commercially standard provisions for disclaiming warranties and limiting liability, which protect Brightmail’s licensors, including Symantec.

11. General.

a. Complete Agreement; Amendment. Each Party acknowledges that it has read this Agreement and all exhibits, understands them, and agrees to be bound by their terms, and further agrees that they are the complete and exclusive statement of the agreement and understanding of the subject matter of this Agreement between the Parties which supersedes all prior proposals, understandings, and all other agreements, oral and written, including the Prior Agreement, between the Parties relating to the subject matter of this Agreement. This Agreement and all exhibits hereto may not be modified or altered except by written instrument duly executed by the authorized signatories of both Parties.

b. Order Forms. In the event of any conflict between the terms and conditions of this Agreement and the terms and conditions of any order form, the terms and conditions of this Agreement and all exhibits shall control.

c. Governing Law; Consent to Jurisdiction; Costs. This Agreement and performance under this Agreement shall be governed by California law, without regard to its conflict of laws provisions and principles, regardless of the domicile of any Party. Brightmail hereby submits to the jurisdiction of the Courts in Santa Clara County, California and agrees that these shall be the sole fora to resolve all disputes under this Agreement. Brightmail agrees to pay all costs associated with the collection of any sums due under this Agreement, including attorney’s fees. Brightmail agrees that any export or re-export of Licensed Product shall be done in accordance with the United States Export Administration Regulations, and hereby takes full

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responsibility therefore and agrees to indemnify Symantec for any violations by Brightmail thereof in accordance with such terms set forth in this Agreement. Diversion contrary to U.S. Law is prohibited. The Licensed Product is prohibited for export or re-export to Cuba, North Korea, Iran, Iraq, Libya, Syria and Sudan or to any person or entity on the U.S. Department of Commerce Denied Persons List or on the U.S. Department of Treasury’s lists of Specially Designated Nationals, Specially Designated Narcotics Traffickers or Specially Designated Terrorists.

d. Severability. If any provision of, or clause within, this Agreement is deemed invalid by a court of competent jurisdiction, it is to that extent to be deemed omitted, unless the court can modify said provision or clause to make it valid and enforceable, in which case the provision or clause shall be so modified. The remainder of the Agreement shall be valid and enforceable to the maximum extent possible.

e. Assignment. Brightmail may not assign or sublicense, without the prior written consent of an authorized officer of Symantec, its rights, duties, or obligations under this Agreement to any person or entity, in whole or in part, and any such assignment or sublicense shall be void.

f. Waiver. The waiver or failure of Symantec to exercise in any respect any right provided for in this Agreement shall not be deemed a waiver of any further right under this Agreement.

g. Headings. The headings appearing at the beginning of the several clauses contained in this Agreement have been inserted for identification and reference purposes only and shall not be used in the construction and interpretation of this Agreement.

h. Notices. Notices shall be sent to the person at the address on the signing page, with a copy to General Counsel, Symantec Corporation, 20330 Stevens Creek Boulevard, Cupertino, CA 95014. All notices shall be written and sent by facsimile, overnight courier or first-class certified mail, and shall be deemed received on the earlier of actual receipt or seven (7) business days after being mailed by first class certified mail or one (1) business day after being dispatched by an internationally recognized express courier service.

i. Authority. Each Party warrants that the person signing below is authorized to bind that Party to this Agreement.

j. Counterparts. This Agreement may be signed in counterparts and delivered by facsimile, each of which will be deemed an original.

k. Symantec Company or Product Acquisitions. Brightmail understands and agrees that during the term of this Agreement, or its renewal, Symantec may acquire rights to additional products. In the event that Symantec acquires any company (or the products of any company) which has in force a reseller or distribution agreement or any other agreement with Brightmail, Brightmail hereby agrees that this Agreement shall automatically, without further action, supersede such other agreement with such other company in regard to such products after the time of Symantec’s acquisition of such company and/or product.

l. Release of Claims. Any and all known claims against Symantec arising under any prior agreements or understandings, whether oral or in writing, between Symantec and Brightmail are waived and released by Reseller by acceptance of this Agreement.

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed on the date set forth below.

Brightmail

Signature:	/s/ Michael Irwin
Print Name:	Michael Irwin
Title:	Chief Financial Officer
Date:	March 28, 2003
Address:	301 Howard Street, Suite 1800 San Francisco, CA 94105

Symantec Corporation

Signature:	/s/ Dieter Giesbrecht
Print Name:	Dieter Giesbrecht
Title:
Date:	March 28, 2003
Address:	20330 Stevens Creek Blvd. Cupertino, CA 95014

Symantec Limited

Signature:	/s/ Art Courville
Print Name:	Art Courville
Title:	Sr. VP, General Counsel
Date:	March 28, 2003
Address:	Ballycoolin Industrial Park, Blanchardstown, Co. Dublin 15, Ireland

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EXHIBIT “A”

I. PRICES AND LICENSED PRODUCTS:

1. Existing Business:

Licensed Product	Price Per Authorized User for Existing Business other than Enterprise (which is per the Enterprise Schedule below).
	Number of Authorized Users	$/Authorized User (i.e. Mailbox/year
NAV API, Windows 2000 and Solaris	0-99,999	$*
	100,000-499,999	$*
	500,000-999,999	$*
	1,000,000 - 1,999,999	$*
	2,000,000 - 3,999,999	$*
	4,000,000 - 5,999,999	$*
	6,000,000+	$*

The Price per Authorized User for Existing Business applies cumulatively to each group of Authorized Users (also referred to as “Mailboxes” under the Prior Agreement) per Authorized Sublicensee throughout the entire Term of this Agreement; e.g. if an Authorized Sublicensee account has 600,000 Authorized Users, Brightmail would pay Symantec:

$*/user/year for each of the first 99,999 Authorized Users of such Authorized Sublicensee;

$*/user/year for each of the next 400,000 Authorized Users of such Authorized Sublicensee;

$*/user/year for each of the next 100,000 Authorized Users of such Authorized Sublicensee; and so on.

2. Enterprise:

Price per Enterprise Schedule

Number of Mailboxes	$/ Authorized User (i.e. Mailbox)/Year
0-1,999	*
2,000-4,999	$*
5,000-9,999	$*
10,000-24,999	$*
25,000-49,999	$*
50,000-99,999	$*
100,000 plus	$*

The Price per Enterprise for each Authorized Users (also referred to as “Mailboxes” under the Prior Agreement) with access to the Service is based upon the total number of Authorized Users on a per Enterprise

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basis. For example, if an Enterprise has 30,000 Authorized Users, Brightmail would pay Symantec $* ($*/Mailbox/year). If that same Enterprise increased its number of Authorized Users by 5,000 additional Authorized Users, Brightmail would pay Symantec an additional $* ($*/Mailbox/year) per the terms of this Agreement.

Payment for a minimum of * Authorized Users is required per Enterprise.

3. New Business:

Licensed Product

Price Per Authorized User for New Business

NAV API

Symantec will provide Brightmail, and Brightmail will purchase, * for * Authorized Users for * a year (the * and the “Minimum Commitment Payment for New Business”). Brightmail will receive the * from Symantec upon the Effective Date. If Brightmail’s New Business exceeds the * Authorized User threshold at any time during the * then Brightmail must purchase additional * in * Authorized User increments for a total of * (“Incremental *”). The* and Incremental * are co-terminus for the same * period in which they are purchased but the Incremental * will be prorated as to the remaining time period in * period.

For example, upon the Effective Date, Payment will be * (which is paid per the terms of this Agreement) for up to * Authorized Users. If Brightmail then exceeds * Authorized Users in * of that * period, and has an additional * Authorized Users. Brightmail will purchase an Incremental * for a pro-rated amount of $* for the remaining * of the * period for that particular *, for up to * additional Authorized Users which exceed the allowed under the *.

II. PURCHASE ORDER:

Immediately after execution of this Agreement, Brightmail shall provide Symantec with a purchase order for the full amount of the fees under this Agreement for the * and Minimum Commitment Payment for New Business. Symantec shall invoice Brightmail per the terms of the Agreement. The purchase order shall be for the amount of * and should specifically state: “NAV API for a total of *, which represents the Minimum Commitment for New Business and for the purchase of an * at the * rate of * for a total of * Authorized Users, for a total of * per the terms of the Agreement and for the Minimum Commitment for Existing Business of *.”

No later than the Amended Date, Brightmail shall provide Symantec with a purchase order for the full amount of the Minimum Commitment Payment due under this Agreement, the signature pages of this Agreement and the check for the full amount due. The purchase order shall specifically state: “Additional license grant rights for NAV API for both limited Enterprise and limited Internal User rights, with a new Minimum Commitment for * totaling *, which is *.”

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III. PAYMENT SCHEDULE AND REPORTING:

1. General

For the purposes of this Agreement a twelve (12) month annual period is any consecutive twelve (12) calendar months starting with the first month of the Effective Date, whether or not it is a full calendar month. For purposes of this Agreement, a quarter is any three (3) calendar months starting with either January, April, July, or October.

All Payments, for purposes of both Existing Business and New Business which are not received within * days from the indicated Payment due date will be subject to late payment penalty fees. All Minimum Commitment Payments are due on the date indicated on the schedules below without net thirty (30) being applied unless otherwise indicated.

2. Minimum Commitment Payments.

For the first three (3) quarters after the Effective Date, a Minimum Commitment of * for each calendar * shall apply to the Existing Business. In terms of New Business, the Minimum Commitment Payment is the * payable over * for the Term of the Agreement, in the amount of * per calendar *, starting on the Effective Date of this Agreement. The Minimum Commitment Payment for the additional licenses added as of the Amended Date is payable initially on an * basis for the first year, starting on the Amended Date; and then thereafter, unless not renewed per the terms of Section IX, is paid *, starting March 26^th, 2004 until the end of the Term of the contract. The Minimum Commitment Payments shall be due in full according to the Minimum Commitment Payment schedule set forth below.

*

The Minimum Commitment Payments for the Existing Business do not include any Existing Business Adjustment in the first three (3) quarters from the Effective Date of the Agreement, Incremental * purchases through out the Term, or Existing Business in the fourth quarter of year one (1), all of year two (2), or year three (3).

* Only the * payments indicated by asterisks will be on payment terms of * days from the following *, * & * all other payments set forth above will remain as stated herein.

3. Reporting and Payments for the Price In Excess of the Minimum Commitment Payments.

(i) Existing Business: All Payments other than Minimum Commitment Payments, which are made in * shall be calculated on the last calendar Friday of the last * of the end of the calendar *, using the then existing Authorized User total, and shall be payable *. The Regional Report showing the Authorized User total for each * and the calculations of Payments due based on such totals shall be due from Brightmail within * days after the end of each calendar * during the Term for the *. Brightmail shall only be required to remit Payments for the Price so calculated to the extent that such Payments exceed the amount of any * portion of the Minimum Commitment Payment actually paid with respect to the applicable calendar * (the “Existing Business Adjustment”). Brightmail shall remit the amount of any Payments due as shown on each Regional Report with the Regional Report. In no event will the amount by which any Minimum Commitment Payment exceeds the actual Payment due calculated on the number of Authorized Users be refunded or carried over to any subsequent *.

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(ii) * and Incremental *. Incremental * at the Price indicated above must be purchased for any Authorized Users exceeding the number of Authorized Users indicated under a * and shall be due per the payment terms above. A Regional Report showing the Authorized User total for New Business, as totalled on the last Friday of the calendar * and the need for the purchase of an Incremental License based on the actual number of Authorized Users shall be due from Brightmail within * days after the end of each calendar * during the Term for the preceding calendar *. Brightmail shall only be required to purchase an Incremental License and remit Payments for the Price of the Incremental License so calculated to the extent that such actual number of Authorized Users exceeds the total of the * actually paid with respect to the applicable calendar *. Brightmail shall remit the amount of any Payments due as shown on each Regional Report with the Regional Report. Minimum Commitment Payments payable at the end of each * based on the Payment schedule set forth above will be applicable for that * only of the Term. In no event will the amount by which any * Payment or any additional Payment for an Incremental * exceeds the actual number of Authorized Users in any given * or * or * be refunded or carried over to any subsequent time period. In addition, the additional Payment for the Incremental * is prorated for the period remaining in any * payment period and only applies to that co-terminus *period.

IV. TERRITORY

The Territory shall be Worldwide.

V. SUPPORT

Brightmail shall continue to provide all direct technical support to (i) Authorized Sublicensees and contractually require the Authorized Sublicensees to provide such to the Authorized Users (regardless of whether they are Evaluations), (ii) Internal Users and (iii) Resellers of the Licensed Products through its standard technical support program. Symantec shall provide no support under the terms of this Agreement

EXHIBIT “B”

ALL PRIOR APPROVED ARRANGEMENTS WITH A UNIQUE DEFINITION OF

AUTHORIZED USER APPROVED PRIOR TO THE EFFECTIVE DATE

Name of Authorized Sublicensee	Effective Date of Agreement with Brightmail	Ending Date of Agreement with Brightmail	Approved Definition of Authorized User	Date Approved and Symantec Person Approving
*	December 15, 2000	December 14, 2002	User End shall mean the individual holder or authorized user of one or more email accounts * of the * Service.	* March 2002
*	April 19, 2001	April 18, 2004	“End User(s)” shall mean the individual holder or authorized user *by Company’s *. For purposes of determining the * number of End Users, the parties agree to the following: * The Parties agree that the following * will be used to * of End Users each *: The number of End Users per * will *. The * to determine the total number of End Users for the * will consist of: *.	* March 2002
			BI will monitor and provide the * by COMPANY based on the * and BI will also determine the number of End Users each *. BI will *and *to COMPANY.
*	April 18, 2001	March 8, 2004	“End User(s)” is the individual holder or authorized user of the email account hosted by Aristotle Email Service.	* March 2002
*	March 20, 2001	August 19, 2005	“End User(s)” is the individual holder or authorized user of the email account hosted by Company Email Service.	* March 2002
*	March 29, 2002	May 20, 2005	“End User(s)” is the individual holder or authorized user of the email account hosted by the Company Email Service	* March 2002
*	June 20, 2000(term.); June 5, 2002	3 years from AV Acceptance	“End User(s)” is the individual that * hosted mail service * Company reports such data to Supplier (“Reporting Period”). An End User will also be the number * by Company’s * customers who are using Company’s * where such usage includes the Product AV Product).	* May 2002

25

CONFIDENTIAL TREATMENT REQUESTED

EXHIBIT “C”

SERVER SECURITY REQUIREMENTS

[GRAPHIC]

Information Technology

Security Requirements for ISPs and ASPs Providing Services on Behalf of Symantec

Revised December 3^rd, 2001

Version 1.4

26

CONFIDENTIAL TREATMENT REQUESTED

TABLE OF CONTENTS

1. Network-Level Requirements	2
2. Operating System-Level Requirements	2
3. Application-Level Requirements	3
4. Use of Encryption	3
5. Audit Requirements	3

Revision history:

Date	Author	Description
17/11/00	*	-Updated format -Updated BS 7799 reference (now ISO Recommendation 17799) -Updated phone number for Tim Mather
1/1/01	*	-Updated logos -Andersen Consulting now Accenture
3/13/01	*	-Added section on use of encryption
9/22/01	*	-Revisions to requirements in all sections

Page 1

CONFIDENTIAL TREATMENT REQUESTED

Introduction

These security requirements pertain to non-Symantec organizations, which will be providing services to, or on behalf of, Symantec. This might include product information that is relied upon by our customers, electronic delivery of products or Certified Definitions for viruses, or the collection of registration information.

There are five (5) sets of requirements for providing services to, or on behalf of, Symantec. Those requirements are:

1. Network-Level Requirements: Vendor shall have * addresses network-level requirements * dealing with issues such as *

1.1. * shall be used to protect * Symantec information. *.

1.2. *.

1.3. *.

2. Operating System-Level Requirements: Vendor shall have * addresses operating system-level requirements, *, dealing with issues such as *

2.1. *.

2.2. *.

2.3. Operating system(s) * shall *.

2.3.1.  Several organizations and vendors have documentation, checklists, or tools designed to facilitate this security configuration process, and are generally recognized as “best practices”. For example,

2.3.1.1. *.

2.3.1.2. *.

2.3.1.3. *

2.4. Vendor shall have *.

2.5. Service provider shall have *.

3. Application-Level Requirements

3.1. *.

3.2. Service provider shall have a documented *, and shall adhere to application vendor’s recommendations for “best practices”.

4. Use of Encryption

4.1. Encryption shall be used under the circumstances listed below.

4.1.1. *.

4.1.1.1. *.

4.1.1.2. *.

4.1.2. *.

4.1.3. *.

5. Compliance Verification Requirements

5.1. Service provider shall *.

5.1.1.1. * shall be:

5.1.1.1.1.*, or

5.1.1.1.2.*, or

5.1.1.1.3.*.

*.

5.2. Small contracts

5.2.1. Vendors whose contracts are less than * with Symantec may chose * to fulfill * verification of all security requirements.

Questions concerning these requirements should be directed to * Symantec’s Director of Information Security. He can be reached at *.

Page 2

CONFIDENTIAL TREATMENT REQUESTED

[GRAPHIC]

EXHIBIT “D”

Guidelines for Using Symantec’s Trademark/Logo

Brightmail or Authorized Sublicensee shall use Symantec’s Trademark/Logo in accordance with these guidelines made by Symantec concerning the appearance, placement or use of the Trademark/Logo.

Brightmail or Authorized Sublicensee shall:

(a) use only approved Trademark/Logo artwork provided by Symantec;

(b) not display the Trademark/Logo more prominently, or larger than, or before the Brightmail or Authorized Sublicensee’s company name/logo and product name/logo, wherever displayed;

(c) not refer to Brightmail or Authorized Sublicensee’s products in which the Trademark/Logo is referenced as “Symantec software” or imply that Symantec produced, endorsed, or supports the Brightmail or Authorized Sublicensee’s Products;

(d) not display the Trademark/Logo in a manner or location disparaging to Symantec;

(e) not display the Trademark/Logo in any publication or on a web site that is pornographic, violent in nature, is in poor taste or unlawful, or which has a purpose or objective of encouraging unlawful activities;

(f) not use the Trademark/Logo as a possessive or in the plural form;

(g) use the Trademark/Logo as an adjective followed by generic descriptors;

(h) include a ^TM symbol after the first or most prevalent use of the Trademark/Logo on each page in which it appears, and attribute the Trademark/Logo as a U.S. trademark of Symantec Corporation in a legend on packaging, splashscreens, web pages, and other materials where the Trademark/Logo appears;

(i) not include the Trademark/Logo in Brightmail or Authorized Sublicensee’s company name, business name, or in the name of Brightmail or Authorized Sublicensee’s product, technology, services, web page, or in any manner suggesting an affiliation or endorsement by Symantec of Brightmail or Authorized Sublicensee or its beliefs, ideas, products, technology, or services;

(j) not use the Trademark/Logo in connection with any product competing with a Symantec product, including, without limitation, the sale or advertisement thereof;

(k) supply Symantec with suitable specimens of Brightmail or Authorized Sublicensee’s use of the Trademark/Logo at any time upon reasonable notice from Symantec; and

Page 3

CONFIDENTIAL TREATMENT REQUESTED

(l) comply with Symantec’s request to correct, remedy, or discontinue any use by Brightmail or Authorized Sublicensee of the Trademark/Logo which is determined by Symantec to be improper under these Guidelines.

(m) The following suggestions and guidelines will help to make the review and approval process of marketing material more effective and timely.

To help expedite the approval process, Brightmail’s marketing can:

• Appoint a marketing point of contact within Brightmail to work with Symantec on the review and approval on marketing material and to determine appropriate branding/messaging with regard to Symantec products.

• Brightmail to provide marketing pieces to Symantec for upcoming Authorized Sublicensee deals no less than one (1) month in advance of planned launch date so Brightmail’s timelines can be accommodated as much as possible by starting to review the promotional material in advance of the launch.

• On all future launches, provide Symantec with marketing launch plan and timeline, so Symantec has advance notice of what marketing pieces will need review and approval and when, thus helping to accommodate Brightmail’s timelines as much as possible.

• Use Symantec’s standard word descriptions for Norton AntiVirus 2002 and Norton Person Firewall 2002. See attachments (nav2002_wd.doc and npf2002_wd.doc). The updated 2003 word descriptions will be provided when available.

• Follow our “Guidelines for Using Symantec’s Trademark/Logo”, see attached document (Guidelines for Using Symc Trademarks.Logos.053102.doc), also exhibit D in the contract.

• Follow guidelines as set forth in the contract, see Terms and Conditions, section d.

(n) The following Trademarks and footnotes are to be used:

[GRAPHIC]

Trademark/Logo footnote:

Symantec and the Symantec logo are U.S. registered trademarks of Symantec Corporation. Powered by Symantec^TM is a trademark of Symantec Corporation.

Page 4

CONFIDENTIAL TREATMENT REQUESTED

(o) The following phrases are approved by Symantec for use in the following manner:

The following examples are approved for use by Brightmail:

With Brightmail AntiVirus, powered by Symantec^TM, you can feel secure that all your e-mail is protected.

The Brightmail Anti-Virus Solution, powered by Symantec^TM anti-virus technology, protects users from the increased threat of infection via email.

The following examples are approved “powered by Symantec” messages relevant to Authorized Sublicensees of Brightmail:

1. [INSERT AUTHORIZED SUBLICENSEE’S SERVICE NAME HERE] combines the virus detection and repair technology from Symantec, with the proven rapid response messaging system filtering technology of the Brightmail Logistics and Operations Center (BLOC) to identify, redirect, clean then deliver the emails.

2. With Powered by Symantec’s AntiVirus technology, Brightmail is able to provide enterprise customers with top-level security from viruses. By combining Symantec’s unrivaled virus detection and repair technology with Brightmail’s real time rule delivery and message filtering technology, Brightmail brings [INSERT AUTHORIZED SUBLICENSEE’S NAME HERE] fast, most thorough virus-protection available, combined with an ISP-strength anti-spam solution.

3. When a virus threat occurs, experts at Symantec Security Response deliver to Brightmail the anti-virus definitions, services and response to combat the outbreak.

4. Brightmail’s proprietary Anti-Spam technology and Brightmail’s Anti-Virus technology, powered by Symantec, together filter out spam and viruses at the gateway.

5. [INSERT AUTHORIZED SUBLICENSEE’S NAME HERE] is deploying Brightmail^® Anti-Virus software, powered by Symantec. Brightmail is a technology leader in spam management software. The virus-identifying and blocking technology prevents contaminated e-mails from causing damage to computer files and to the network. The antivirus software will scan all incoming e-mail messages to [INSERT AUTHORIZED SUBLICENSEE’S NAME HERE]’s subscribers, clean infected messages, and notify the recipient if a virus is detected and removed.

6. [INSERT AUTHORIZED SUBLICENSEE’S SERVICE NAME HERE] with junk-email filtering powered by Brightmail, and e-mail virus filtering powered by Symantec^TM, starts at just $X, a month. One hundred percent filtering is not guaranteed.

7. Access your email from anywhere around the world. [INSERT AUTHORIZED SUBLICENSEE’S SERVICE NAME HERE] provides filtering for junk e-mail and email viruses. No software to install! Filtering for junk e-mail is powered by Brightmail, and filtering for e-mail viruses is powered by Symantec^TM.

Page 5

CONFIDENTIAL TREATMENT REQUESTED

EXHIBIT “E”

“REPORTING REQUIREMENTS”

No later than thirty (30) days following the end of each calendar quarter, during the Term, Brightmail will provide Symantec with a report containing certain transaction information, including but not limited to the following:

(i) Basic Licensee Information. Report should indicate Brightmail’s corporate name and corporate address, indicating a contact person if there are any questions.

(ii) Identify Authorized Sublicensees. Provide corporate name of the Authorized Sublicensees of the BMI Service as well as those provided by the Reseller. Also provide the name (and if possible, address) of the Reseller.

(iii) First Date of Use of the Licensed Product as incorporated into the BMI Product Date. Indicate First Date of Use each Authorized Sublicensee initially signed up for the Service, how long of a term the contract between Brightmail and the Authorized Sublicensee is for, and indicate the total of new Authorized Users for the calendar quarter by Authorized Sublicensee.

(iv) Authorized User Information. Indicate how many Authorized Users are active by the last Friday in each calendar quarter time period per Authorized Sublicensee. How Authorized User is being defined with each Authorized Sublicensee. The Minimum Commitment and number of Authorized Users by which the Minimum Commitment is exceeded.

(v) Excel Format. All reports should be in Excel format and indicate the final net amount to be received from the Authorized Sublicensee.

(vi) Regional reporting as outlined in the Agreement under Section V.2 As this is an international contract, the reporting must also be by geographic country so that Symantec can properly account for tax purposes.

(vii) Brightmail has provided a mock report which is attached hereto as Exhibit E-1 and obtain Symantec’s written approval of the format of such report.

Page 6

CONFIDENTIAL TREATMENT REQUESTED

Exhibit E-1

Page 1

Brightmail, Inc. 301 Howard Street San Francisco, CA 94105 contact: * phone: *; email * * Preliminary Royalty Report CONFIDENTIAL TREATMENT REQUESTED

Authorized Service Provider

Customer Type

Definition of Authorized User

Region

Acceptance Date

Contract End Date

EULA Term in Months

Royalty Rate

* Royalty

Feedback Notes

Users

Minimum Commitment or Authorized Users

Effective Rate

Proration

Est. royalty

*

*

XSP

*

Americas

11/15/2001

*

*

New

*

AU

*

*

$

*

*

XSP

*

Americas

8/12/2002

*

*

New

*

minimum

*

*

$

*

*

*

$

*

*

*

ENT

*

Americas

9/28/2001

*

*

Converted

*

minimum

*

*

*

ENT

*

Americas

9/12/2001

*

*

Converted

*

minimum

*

*

$

*

*

*

ENT

*

Americas

7/1/2001

*

*

Converted

*

minimum

*

*

$

*

*

*

$

*

*

*

XSP

*

Asia/EMEA

3/1/2002

*

*

Converted

*

minimum

*

*

$

*

*

XSP

*

Americas

12/31/2001

*

*

Converted

*

minimum

*

*

$

*

*

XSP

*

Americas

3/4/2002

*

*

Converted

*

minimum

*

*

$

*

*

XSP

*

Americas

12/31/2001

*

*

Converted

*

AU

*

*

$

*

*

XSP

*

Americas

10/17/2001

*

*

Converted

*

AU

*

*

$

*

*

XSP

*

Americas

9/28/2001

*

*

Converted

*

minimum

*

*

$

*

*

XSP

*

Americas

12/27/2001

*

*

Converted

*

minimum

*

*

$

*

*

XSP

*

Americas

12/1/2001

*

*

Converted

*

AU

*

*

$

*

*

*

$

*

*

*

XSP

*

Asia/EMEA

4/30/2002

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Asia/EMEA

1/1/2002

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Asia/EMEA

2/1/2002

*

*

Existing

*

est based on Q2 AU

*

*

$

*

*

$

*

*

*

$

*

Minimum Commitment Payment

*

$

*

Additional Amount Due

$

*

*

*

XSP

*

Americas

5/16/2002

*

*

Existing

*

AU

*

*

$

*

*

XSP

*

Americas

5/1/2001

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Americas

5/1/2001

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Americas

3/1/2001

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Americas

12/7/2001

*

*

Existing

*

AU

*

*

$

*

*

XSP

*

Asia/EMEA

1/1/2002

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Asia/EMEA

1/1/2002

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Asia/EMEA

7/29/2002

*

*

New

*

minimum

*

*

$

*

*

XSP

*

Asia/EMEA

7/15/2002

*

*

New

*

minimum

*

*

$

*

*

XSP

*

Americas

3/5/2002

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Americas

3/1/2001

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Americas

3/15/2002

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Americas

12/17/2001

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Americas

5/17/2001

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Americas

8/20/2001

*

*

Existing

*

AU

*

*

$

*

*

XSP

*

Americas

3/1/2002

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Americas

5/20/2002

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Americas

3/1/2002

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Americas

12/31/2001

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Americas

4/1/2002

*

*

Existing

*

AU

*

*

$

*

*

XSP

*

Americas

12/21/2001

*

*

Existing

*

AU

*

*

$

*

*

XSP

*

Americas

1/17/2001

*

*

Existing

*

minimum

*

*

$

*

*

*

$

*

*

*

ENT

*

Americas

12/20/2001

*

*

Existing

*

*

*

*

ENT

*

Americas

4/1/2002

*

*

Existing

*

*

*

*

*

$

*

*

*

$

*

Minimum Commitment Payment

$

*

Additional Amount Due

$

*

*

ENT

*

Americas

*

ENT

*

Asia/EMEA

*

$

*

*

$

*

*

*

XSP

2/1/2001

*

Audit Adjusted

*

$

*

*

XSP

6/1/2001

*

Audit Adjusted

*

$

*

*

XSP

3/9/2001

*

Audit Adjusted

*

$

*

*

Page 2

CONFIDENTIAL TREATMENT REQUESTED

Exhibit “F”

The following Converted Business will be included under the * at the royalty rate indicated in Exhibit A as Existing Business.

Authorized Sublicensee	First Date of Use	Contract End Date	AV Pricing	No. of months in Term of Authorized Sublicensee’s contract	Royalty Rate
*	TBD	TBD	*	*	*
*	TBD	TBD	*	*	*
*	12/01/01	11/14/07	*	*	*
*	12/08/01	12/7/04	*	*	*
*	09/28/01	9/28/05	*	*	*
*	TBD	8/15/06	*	*	*
*	TBD	8/1/05	*	*	*
*	TBD	8/1/05	*	*	*
*	09/28/01	12/31/02	*	*	*
*	03/04/02	2/28/05	*	*	*
*	12/19/01	2/28/05	*	*	*
*	9/12/01	9/11/04	*	*	*
*	03/01/01	7/1/03	*	*	*
*
	12/31/01 10/17/01	12/30/05	*	*	*
*		10/16/04	*	*	*
*	11/15/00	11/14/03	*	*	*

* Both approved by an officer of Symantec as an exception to the * requirement.

Page 1

CONFIDENTIAL TREATMENT REQUESTED

EXHIBIT G

DISTRIBUTION AGREEMENT

This Distribution Agreement is entered into on              (“Effective Date”) by and between Brightmail Incorporated, a California corporation (“BMI” or “Brightmail”) with principal offices at 301 Howard Street, Suite 1800, San Francisco, CA 94105 and             , a              corporation (“Distributor” or “            ”), with principal offices at             . BMI and              will collectively be referred to as the “Parties” and each of them will be a “Party”.

WHEREAS, BMI develops and licenses client/server software, and hosts software related services, including but not limited to, software and services that reduce or eliminate Spam;

WHEREAS,              wishes to obtain from BMI the non-exclusive right to market and distribute certain BMI products and services to its customers directly and indirectly through resellers of Distributor, and BMI agrees to appoint              for such purposes subject to the terms and conditions of this Agreement.

NOW THEREFORE, in consideration of the mutual covenants contained herein, the Parties agree to the following terms and conditions, which set forth the rights, duties and obligations of the Parties:

1. DEFINITIONS

1.1 “Affiliate” means any entity in which              has a greater than fifty-percent (50%) equity ownership interest in or which              has voting control over, or any entity which owns a greater than fifty-percent (50%) equity ownership interest in or which has voting control over             .

1.2 “Agreement” is this Distribution Agreement entered into by the Parties, together with all and any Exhibits attached hereto and made a part hereof, and all and any amendments or modifications made hereto pursuant to mutual written agreement of the Parties.

1.3 “Application Service Provider” or “ASP” is an entity that provides application services remotely for a fee or other consideration to its Customers, none of whom are under the ASPs immediate employ or the employ of any parent, or subsidiary.

1.4 “BMI Trademarks” are the trademarks, logos and trade names of BMI which may be registered or unregistered and include, but are not limited to, those BMI Trademarks set forth at http://www.brightmail.com/trademark.html.

1.5 “Customer(s)” is the individual that subscribes to the End Users’ email services; or the total number of Mailboxes existing on the End Users’ email system and/or that have access to the Services

1.6 “Documentation” is BMI’s standard system administrator documentation that outlines the system architecture and its interfaces of the Product, including comprehensive guides on installation and operations, and on application program interfaces (“API”).

1.7 “End User(s)” is the ISP, ASP or Enterprise customer that upon executing an End User License Agreement, obtains a license for the Software and Services for its own internal use with Internet services or online application services for the benefit of its End Users.

1.8 “End User License Agreement” is the license and service agreement between an End User and              that governs the End User’s rights and restrictions in use of the Product and in receiving

Page 1

CONFIDENTIAL TREATMENT REQUESTED

the benefit of the Services, and that contains substantially the minimum terms and conditions detailed in the attached Exhibit B.

1.9 “Enterprise” individually and collectively the entities other than ISPs and ASPs that procure Services for internal use in conjunction with the entities’ internal needs for the benefit of its employees, agents, and contractors.

1.10 “IP Rights” means all and any intellectual property rights in the Software, the Documentation and BMI Trademarks, and/or which are derived or arise from the Services, including copyrights, inventions, patents, trade marks, service marks, trade names, moral rights, mask words, trade secrets, goodwill, confidential and proprietary information, compositions and formulae whether created in the United States of America or elsewhere and all applications for registration and registrations of such rights.

1.11 “Internet Service Provider” or “ISP” is an entity that provides Internet access and messaging services for a fee or other consideration to its End Users, none of whom are under its immediate employ or the employ of any parent, or subsidiary.

1.12 “Mailbox(es)” is an area in memory in a storage device where email is placed and/or stored, i.e., an email address. An individual End User may have one or many Mailboxes.

1.13 “Marketing Materials” are sales and marketing collateral including but not limited to: sales presentations, datasheets, white papers, press releases, industry articles, benchmark test reports, competitive evaluations, and customer testimonials.

1.14 “Product” or the “Brightmail^® Solution Suite” comprises the Software, including Updates and Upgrades thereto, if any, the Services and the Documentation, as more fully described in Exhibit A, attached hereto and made a part hereof.

1.15 “Rules” are explicit, conditional statements, or criteria, that are created and used by BMI to detect and filter Spam (as defined below), and are made available by BMI to             ’ or directly to End Users solely as part of the Services.

1.16 “Rule Update(s)” are modifications and revisions to the Rules made available by BMI to              or directly to End Users as part of the Services.

1.17 “Server(s)” are a combination of Software, hardware, processes and functions and that are collectively used to filter the incoming mail of End Users. Servers are set up to divert, reject, or discard Spam.

1.18 “Service(s)” are the provision by BMI of its email analysis and filtering system, which services include the creation of Rules and Rule Updates, Updates (as defined below) and Upgrades (as defined below), all of which are used to detect Spam. Services also include Server support and general Product support as more fully described in this Agreement.

1.19 “Service Provider(s)” are ASPs and ISPs, collectively.

1.20 “Software” is BMI’s email-filtering software, and is part of the Product. The Software is more fully described in Exhibit A, attached hereto. To the extent that BMI (in its sole discretion) provides              or directly to End Users with any Updates and/or Upgrades during the term of this Agreement, all references to Software will include such Updates and/or Upgrades.

1.21 “Sale” and /or “Sell” means the distribution of the Software to the End User. All Software sold to the End User will be pursuant to a End User License Agreement

Page 2

CONFIDENTIAL TREATMENT REQUESTED

1.22 “Territory” means the territory comprising the countries described in Exhibit A attached hereto.

1.23 “Training Materials” means informational materials, including but not limited to summary Product and Service information, frequently asked questions and responses, architectural and functionality descriptions and diagrams, etc., and other information included in BMI’s training materials for its training classes.

1.24 “Updates” are minor updates of, or error corrections and bug fixes to the Software that do not add significant new functions to the Software, and that are released by BMI, in its sole discretion. Updates are designated by an increase to the Software’s release number to the right of the decimal point (e.g., Software 1.0 to Software 1.1). The term Updates specifically excludes Upgrades and excludes any software marketed and licensed by BMI as a separate product.

1.25 “Upgrade(s)” are any major revisions to the Software, which adds significant new functionality, if and when released by BMI, in its sole discretion. Upgrades are designated by an increase in the Software’s release number, located to the left of the decimal point (e.g., Product 1.x to Product 2.0). The term Upgrade specifically excludes any software marketed and licensed by BMI as a separate product.

2. APPOINTMENT; GRANT OF RIGHTS

2.1 Subject to the terms and conditions contained in this Agreement, BMI hereby appoints              as an authorized distributor of the Product and              hereby accepts such appointment. Subject to the terms and conditions of this Agreement, BMI grants to              for the duration of the Term (as defined below), a non-exclusive, revocable, royalty-bearing, license (“License”) to market and distribute the Product to End Users, specifically, ISPs, ASPs, and/or Enterprises, within the Territory and that are using the Solaris operating system. The parties understand and agree that pricing, as provided herein, is dependent on the End User type, e.g., ISP, ASP or Enterprise, and the manner in which the End User will pay for the Product, e.g., for all Customers existing on its email services or for those Customers receiving the benefit of the Services.              will report the End User type and the manner in which the End User is paying for the Product to BMI as provided in Section 6, 9, and Exhibit C, herein.              will provide the Product to End Users pursuant to an End User License Agreement.              may distribute the Product directly, or indirectly via its authorized resellers (each a “Reseller”).              may appoint one (1) or more persons to act as a Reseller, provided that              has written agreements with each such Reseller containing terms protecting BMI and its proprietary Product to the same extent as provisions              relies on to protect its own products (“Reseller Agreement”).              will take all reasonable measures to enforce such provisions in favor of BMI to the same extent that it would enforce such Reseller Agreements on its own behalf.              may only grant Resellers the right to make sales to End Users. Each Reseller Agreement will contain provisions making BMI a direct and intended third party beneficiary of such Reseller Agreement, such that BMI may enforce its proprietary and intellectual property rights against any of             ’s End Users and Resellers.

2.2 In connection with             ’s sale and distribution of the Products to End Users, BMI will be solely responsible for the delivery of the Services to End Users, directly, and BMI agrees to provide the Services in accordance with the same policies and procedures that it uses to provide the Services to its own direct customers and licensees.              will have no right or license to distribute, display or otherwise make available the Rules or Rule Updates. Brightmail may, at its sole discretion, and subject to the then-current fee, if any, and subject to certain restrictions, allow              to distribute the Rules or Rule Updates to its End Users.

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2.3 BMI will deliver to              one (1) master copy of the Software in machine executable object code format together with BMI’s labeling and Documentation artwork data files, in electronic format. Subject to the terms and conditions of this Agreement, BMI grants to              a nonexclusive, non-transferable, royalty-free right and license to copy the Software in machine executable object code format only and to copy the Documentation for incorporation in documentation for distribution to Resellers or End Users in accordance with the terms and conditions of this Section. Any use of BMI’s trademarks, trade names or logos will be in accordance with Section 8 below.

2.4 Subject to terms and conditions of this Agreement, BMI grants to              for the duration of the Term a non-exclusive, revocable, royalty-free and fully paid up, non-transferable license to install and use copies of the Software solely for internal, non-commercial use, including, by way of example, development, support, testing and customer care services (“Support License”). This Support License may be used at any of             ’s facilities where needed, and, on a royalty-free basis. BMI will provide              any Rule Updates, Updates and Upgrades as commercially made available for these Support Licenses.

2.5 BMI hereby grants to              a non-exclusive, royalty-free license, at its sole expense, to translate the Documentation, Training Materials, and Marketing Materials for distribution with the Product to non-English speaking countries. As between              and BMI,              will be solely responsible for any and all liability that results directly from the translation of the materials to any language other than English. If during the term, BMI desires to obtain a translated version, BMI will notify              of such in writing, and following reimbursement by BMI of half (¹/₂) of             ’s cost in translating the materials into the requested language,              will make the translated versions available to BMI for its unrestricted use.

2.6 With each potential End User,              may offer a one-time evaluation license to that potential End User, provided the evaluation extends for no more than sixty (60) days, unless              obtains BMI’s prior written permission. Such evaluation will be conducted at no charge to the End User, and will only be used as a lead into the attempted sale of licenses in accordance to the terms and conditions herein.

2.7 Distributor may describe itself as the authorized distributor for the Product in the Territory, but will not hold itself out as an agent, representative, partner or joint venture partner of BMI or being in any other way connected with BMI. Distributor will at all times be an independent contractor.

2.8 Each party will appoint a representative as a relationship manager who will be the primary contact for implementing and administering the terms and conditions of this Agreement (“Relationship Managers”). The Relationship Managers will be those people set forth on Exhibit A and will meet, either in person or via teleconference at least monthly and at mutually agreeable times to review and coordinate sales efforts, review             ’s marketing/sales strategies, review End Users’ response to the Services and address other topics related to the successful support of the Products.

3. RESTRICTIONS

3.1              will not use, apply or otherwise deal with the Product for any purpose other than the purpose set out in Section 2.1 of this Agreement.              will not decompile, reverse engineer, disassemble, reconstruct, tamper with or otherwise determine, or attempt to derive, reconstruct or discover the source code for the Product or any part thereof, or modify or create or attempt to create any derivative works from or based on the Product, nor will              authorize, permit, or assist any End User or anyone else to do so.              will not, and will not authorize, permit, or assist any End User to determine or attempt to determine the Rules or Rules Update(s) used by the Software under any circumstances whatsoever.

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3.2              will require that use of the Product by its End Users will be in accordance with the Documentation or any other operation or user instructions or manuals furnished by BMI or its licensors, and in accordance with any other reasonable requirements of BMI.

4. PROPRIETARY RIGHTS

4.1 Ownership of all rights (including the IP Rights), title and interest in the Product (including but not limited to copies of the Product contained in any storage media) the Marketing Materials, Training Materials and any other materials provided by BMI to              will at all times remain the absolute and exclusive property of BMI and/or its licensors, as the case may be. Except as expressly granted herein,              is granted no rights to create derivative works of the Product, or to distribute the Product to third parties. In the event that notwithstanding the above,              has or acquires any such said rights, title or interest,              will be deemed to have irrevocably assigned and transferred the same to BMI free from any requirement on the part of BMI to pay any fees. Further and if required by BMI at BMI’s cost,              will execute and deliver to BMI all relevant documents of assignment and transfer in respect of the said rights, title or interest, and the documents will be in such form as may be required by BMI.

4.2             , its officers, employees, servants and agents will not remove, alter, obscure, conceal or otherwise interfere with any BMI Trademarks, or other EP Rights in the Product, appearing on or in copies of the Product or on the Software or other materials delivered to              by BMI. In connection with the distribution of the Product,              will use those notices, legends, symbols or labels in connection with the Product in the same manner as they appear on or in the Product.

5. NO OTHER RIGHTS.

Except as expressly provided herein, no right (including the IP Rights), title or interest in any Product is granted by BMI to             , and all such right, title and interest is reserved and retained by BMI. Without limiting the foregoing, B MI reserves the right to use, distribute, sell, resell, apply, import, export, make, have made, use, copy, modify, have modified, create derivative works of, have created derivative works of, demonstrate, maintain, support or otherwise exploit the Product in any part of the world (including the Territory), and the right to license the foregoing rights.

6. SCOPE OF SERVICES; ORDERS AND DELIVERY; TRAINING

6.1              will submit a purchase order (“Order”) to BMI in writing or via email for the Services to be provided to each of its End Users pursuant to one or more End User License Agreements. The purchase order shall be issued upon execution of an End User License Agreement. The Order shall state the Order number, End User name, Service description, applicable Fee (as defined in Section 9.1), End User categorization (i.e., an ISP, ASP or Enterprise), the manner in which the End User is paying for the Product (100% opt-in or selective opt-in), the aggregate number of Customers, a distribution email address for the provision of Rules and Rule Updates, and the contract term. Unless otherwise noted, BMI shall use such Order as evidence that the End User is properly configured to receive the Services, and BMI shall commence the provision of such Services within four (4) days of receipt of the Order.              shall notify BMI promptly in writing with respect to any: (i) effective dates of evaluations and/or acceptance by any End Users; (ii) termination or expiration of a End User License Agreement; and (iii) any other relevant change in Service description.              will provide a quarterly report, verifying and updating the information contained’ in the Order for each End User, including the then current of numbers of Customers per End User (“Product Report”). The Product Report will be due within fourteen (14) calendar days of the end of the quarter for the just ended quarter; e.g., the Product Report due for January, February, and March, will be due on April 14. BMI will generate an invoice for any increases in the number of End Users provided within the Product Report at the applicable fee rate.

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6.1.1 Any evaluation licenses will be noted within an Order and will contain the same information listed above.              will indicate the beginning and end dates. For any evaluation licenses exceeding sixty (60) days without written consent for extension from BMI,              will be charged the applicable fee for that End User type and in accordance to the terms outlined in section 6.1.

6.2              and BMI mutually agree to work in good faith to reduce channel conflict.

6.3 BMI will make available the following to              in respect of the Product:

6.4.1 Documentation and other written information and data, if any, for the installation, use and application of the Product by              and/or its End Users (as applicable) in either printed or machine-readable form as BMI may in its sole discretion elect.

6.4.2 A reasonable quantity of Marketing Materials and Training Materials to the respective appropriate              contacts in the English Language in electronic or other mutually agreeable format, as available or upon material update, change or enhancement (particularly with respect to any Updates or Upgrades). It is anticipated that              will integrate the Training Materials supplied by BMI into             ’s training curriculum.

6.4.3 In connection with the commencement of this Agreement, the training of a number of suitably qualified employees of              in the marketing and promotion, and the installation, use and application of the Product, and the rendering of training and support services to End Users as described in Exhibit D of this Agreement, as may be required by Distributor. Such training (“Training”) will be undertaken by BMI at the premises of BMI unless otherwise agreed by the Parties. If the Training is at a location other than the premises of BMI,              will be responsible for all expenses that may be incurred by the employees of BMI in attending the Training, including airfare, ground travel expenses, accommodation and meals, and telecommunication expenses.

6.4.4 At the request of             , (a) after the initial execution of this Agreement and (b) thereafter per each Upgrade release, visits to             ’s premises, (but not to exceed three (3) man-days) by such number of suitably qualified personnel of BMI as BMI deems appropriate who will, within their reasonable means and capabilities, address or troubleshoot technical problems encountered by              in connection with the Product.              will be responsible for all expenses that may be incurred by the employees of BMI in providing such services, including airfare, ground travel expenses, accommodation and meals, and telecommunication expenses.

6.4.5 In connection with any Updates and/or Upgrades that may be made available by BMI to             , and on such timing as notified by BMI, the training of a mutually agreed upon number of suitably qualified employees of              at the premises of BMI (unless otherwise agreed by the Parties), and for such period as the parties deem appropriate, in the marketing, promotion, installation, use and application of the Upgrades, and the rendering of training and support services to End Users with respect to such Upgrades and as described in Section 13. Appropriate Update training will be mutually determined after discussions as to the extent and impact of the Updates. For the avoidance of doubt, BMI is not required under the terms of this Agreement or otherwise to disclose any source code comprised in the Product or Updates and/or Upgrades.

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6.5 If              requires further and additional assistance or instructions beyond any time frame or time limit or number of personnel allocated for purposes of Section 6.4 of this Agreement or requires further and additional assistance or instructions from time to time during this Agreement on any matter relating to the Product or any Updates and/or Upgrades that are not expressly included in Section 6.4 of this Agreement, BMI may provide such assistance or instructions in such manner and by such means as BMI deems appropriate, provided that BMI has the capacity and available resources to provide such assistance or instructions, and provided further that              will pay BMI’s then-current fees for such services upon completion of the effort. BMI will provide a written quotation of the deliverable and the then-current fees and              will provide written acceptance, prior to the start of any services rendered under the scope of Section 6.5.

7. DUTIES OF             

7.1              will at all times during the Term:

7.1.1 observe and perform the terms and conditions set out in this Agreement;

7.1.2 consistent with its resource deployment strategy, devote its reasonable commercial efforts to promoting and marketing the Product in the Territory;

7.1.3 conduct its business in a responsible and ethical manner in the Territory and in accordance with all applicable laws, regulations and rules of the Territory, and not do or permit to be done anything that may bring BMI, the Product, the BMI Trademarks and/or the IP Rights into disrepute;

7.1.4 promptly bring to the attention of BMI any complaints it may receive regarding the Product;

7.1.5 not make or give any warranties, guarantees, representations or other commitments in relation to the Product or Services, other than as provided by BMI in writing (including in any Marketing Materials provided by BMI) or approved by BMI in writing;

7.1.6 promptly and diligently follow up on all End User inquiries consistent with             ’s current business model and in any event, no less than the obligations agreed to herein;

7.1.7 consistent with its resource deployment strategy, maintain adequate staff trained in and able to fulfill the marketing, distribution and support needs as required under this Agreement;

7.1.8 promote BMI as             ’s Preferred Provider for a Spam filtering service. As a “Preferred Provider,”              agrees that: (i) when a              customer requests a provider for Spam filtering products, it will promote BMI as a              preferred Spam filtering product/service provider; and (ii)              will refer to BMI as its preferred Spam filtering product/service provider in its public announcements regarding the relationship contemplated by this Agreement.

7.1.9 make each End User aware of the importance of providing BMI with email accounts * by BMI as probe accounts (“Probes”) in connection with BMI’s provision of the Services and to use reasonable commercial efforts to obtain and provide BMI with a list of the Probes for each End User prior to the first distribution of a Rule.

8. TRADEMARK LICENSE

8.1              will require in its agreements with its End Users and Resellers that they: (a) describe and refer to the Product as the Brightmail^® Solution Suite or such other name as BMI may specify; (b) use and apply the BMI Trademarks in relation to the Product in the forms stipulated by BMI and in accordance with

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the guidelines (“Guidelines”) found at http://www.brightmail.com/trademark.html, as updated by BMI from time to time, (if any such Guideline update is material, BMI will supply              with adequate notice to ensure             ’s proper use of such Guideline update) and any other written directions given by BMI as to the appearance, colors, size and placing of all representations of the BMI Trademarks and their manner of use or application in relation to the Product and in any Marketing Materials and in connection with any promotional activities; (c) ensure that the BMI Trademarks are accompanied by wording to show that they are used with the permission of BMI (the content of such wording, placing and size to be as instructed by BMI or as set out in the Guidelines); and (d) save with the prior written consent of BMI, not offer the Product in any packaging other than that provided by BMI and use, affix or otherwise place such marks, logos, labels, markings or notices on the Product in the form provided by BMI.

8.2 Subject to the terms and conditions in this Agreement,              is hereby granted, throughout the Term, a non-exclusive, revocable, royalty-free and fully paid up, restricted right to use the BMI Trademarks in the manner set out in Section 8.1 of this Agreement, and solely in conjunction with the distribution of the Product in accordance with the terms of this Agreement. All representations of the BMI Trademarks that              desires to use will be exact copies of those used by BMI or will first be submitted to BMI for its approval. All right, title and interest in and to the BMI Trademarks, all derivations thereof and any other trademark or service mark adopted by BMI to identify the Product, will belong to BMI or its licensors, as the case may be.              will not acquire, directly or indirectly, any right, title or interest in or to the BMI Trademarks except as expressly set forth herein and as specified in writing by BMI to              from time to time.              will not use any BMI Trademarks in a manner inconsistent with the Guidelines and/or the terms of this Agreement. Furthermore,              will not register any BMI Trademarks in             ’s name, or permit any other third party to register any such BMI Trademarks.              acknowledges that any material breach by it of this Section 8.2 is a material breach of this Agreement that is incapable of cure, permitting BMI to terminate this Agreement upon written notice.

8.3 For the avoidance of doubt, BMI will be the sole party permitted to file or prosecute any registration or application for registration for the BMI Trademarks and/or any of the IP Rights.              will not do or permit to be done any act which may jeopardize or invalidate any registration (or pending registration) of the BMI Trademarks and/or the IP Rights, nor do any act which might assist or give rise to an application to remove any of the BMI Trademarks and/or IP Rights from all and any applicable registers.              will give to BMI any information as to its use of the BMI Trademarks and/or IP Rights that BMI may reasonably require and render any assistance, at BMI’s expense, reasonably required by BMI in maintaining the registrations of any of the BMI Trademarks and/or IP Rights.              will, if required by BMI and at BMI’s expense, do all acts reasonably necessary (including executing any necessary documents) for the recording of              as a registered user of any appropriate BMI Trademarks and/or IP Rights on all and any applicable registers, and              hereby agrees that such entry may be canceled by BMI on the expiry or termination of this Agreement and that it will reasonably assist BMI at BMI’s cost as far as may be necessary to achieve such cancellation (including executing any necessary document).

8.4 Subject to the terms and conditions of this Agreement, BMI is hereby granted a non-transferable, non-exclusive, revocable, royalty-free and fully paid up, restricted license to use             ’s trademarks, logos, service marks and trade names (collectively, “             Trademarks”) to identify that              is BMI customer on BMI’s website, literature, tradeshow signage, and press releases relating to the Product, all in accordance with the written directions of              (if any); provided, that BMI will use artwork and logos in the form provided by              and will obtain             ’s approval prior to making changes to such artwork or logos. BMI will clearly indicate             ’s ownership of the              Trademarks. In addition, BMI will be prohibited from registering              Trademarks and all derivations thereof in BMI’s name, or permitting any other third party to register any              Trademarks or derivations

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thereof. All right, title and interest in and to the              Trademarks, all derivations thereof and any other trademark or service mark adopted by              to identify its products and services, will belong to              or its licensors, as the case may be. BMI will not acquire, directly or indirectly, any right, title or interest in or to the              Trademarks except as expressly set forth herein and as specified in writing by              to BMI from time to time.

8.5 For the avoidance of doubt,              will be the sole party permitted to file or prosecute any registration or application for registration for the              Trademarks. BMI will not do or permit to be done any act which may jeopardize or invalidate any registration (or pending registration) of the              Trademarks, nor do any act which might assist or give rise to an application to remove any of the              Trademarks from all and any applicable registers. BMI will give to              any information as to its use of the              Trademarks that              may reasonably require and render any assistance, at             ’s expense, reasonably required by              in maintaining the registrations of any of the              Trademarks. BMI will, if required by              and at             ’s expense, do all acts reasonably necessary (including executing any necessary documents) for the recording of BMI as a registered user of any appropriate              Trademarks on all and any applicable registers, and BMI hereby agrees that such entry may be canceled by              on the expiry or termination of this Agreement and that it will reasonably assist              at             ’s cost as far as may be necessary to achieve such cancellation (including executing any necessary document).

8.6 From time to time during the term of this Agreement, BMI may desire to use End User’s trademarks, or obtain an End User Case Study, or other similar marketing items in connection with its promotion of the Products.              agrees to use reasonable efforts to obtain one or all of the same from the End User that would permit BMI to refer to the End User, solely in connection with that End User’s use of the Products. After proposing such marketing requests to an End User, should the End User refuse,              agrees that it will provide BMI with a contact at the End User, if such End User allows              to do so, so that BMI may contact the End User directly to obtain permission.

9. FEES AND PAYMENTS

9.1              will pay to BMI a Fee for each Customer reported under the Order or Product Report submitted by              with respect to each Product (“Fees”), as further set forth in Exhibit C. BMI will invoice              for total fees and payments after the receipt of each Order or Product Report as described in Sections 6.1 and 9.5 of this Agreement. Each invoice will be due and payable net thirty (30) days after the date of the invoice. Fees will equal at a minimum the product of the number of Customers on an End Users email system and either the selective opt-in fees or 100% opt-in annual fee as provided in Exhibit C and section 6 of this Agreement. All Orders, Product Reports and Invoices will be in US Dollars.

9.2 All payments to be made by              to BMI under this Agreement will be payable in US Dollars.

9.3 All fees owed by              to BMI under this Agreement will be paid in full within thirty (30) calendar days after the date of invoice without any deduction or withholding (whether in respect of set off, defense, deferment, counterclaim, duties, taxes including turnover tax, value added tax, goods and services tax, withholding tax, government charges or legal dues and otherwise whatsoever) unless the deduction or withholding is required by law in relation to tax on the net income of BMI or the employees of BMI, in which case              will: (a) notify BMI of any requirement with respect to the deduction or withholding as soon as              becomes aware of it; (b) ensure that the deduction or withholding does not exceed the minimum amount legally required; (c) pay to the relevant taxation or other authorities within the period for payment required by applicable law the full amount of the deduction or withholding; and (d) furnish to BMI

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within the period for payment permitted by applicable law an official receipt of the relevant taxation or other authorities in respect of all amounts deducted or withheld.

9.4 All amounts not paid when due under this Agreement will accrue interest at the lesser of one and one half percent (1.5%) per month or the maximum rate permitted under applicable law.

9.5              will maintain complete, proper, accurate and up-to-date records (`Relevant Records”) of all sales of the Services and of the details of all End Users, including contracts, accounts and support logs regarding: (a) the use of Product by End Users, and (b)             ’s compliance with the terms of this Agreement. Such reports will be submitted by              to BMI within ten days of BMI’s request of the same.              will keep all Relevant Records. BMI will have the right to audit (“Audit”) all such records no more than once per twelve (12) month period throughout the term of this Agreement, to confirm the accuracy of the number of Customers reported to BMI, and compliance with any other terms and conditions of this Agreement. The scope of such audit shall be limited to transactions occurring during the preceding 24-month period For the purposes of the Audit,              will ensure that BMI and/or its duly appointed representative will be given access to such principal place of business and to such records and will be entitled to take copies of all such records for the aforesaid purpose. This right will survive one (1) year after termination of this Agreement. Audit will take place during normal business hours and in accordance with             ’s standard security procedures. BMI must give reasonable prior written notice to audit in advance of the desired date. The audit will be conducted at BMI’s expense unless such audit reveals an underpayment to BMI in excess of ten percent (10%) for the period being audited, in which case              will bear the reasonable expenses of the audit.

9.6 Except as otherwise provided hereunder or as otherwise agreed to in writing between the Parties, each Party is responsible for their own expenses incurred in their performance hereunder. Any costs or expenses incurred by the Parties will be at that Party’s sole risk and upon that Party’s independent business judgment that such costs and expenses are appropriate. For the avoidance of doubt,              may not credit any payment of Fees due to any End Users failure to pay.

10. WARRANTIES OF             

10.1              represents and warrants to BMI that:

10.1.1               has the capacity to enter into and perform and comply with its obligations under this Agreement.

10.1.2  All actions, conditions and things required to be taken, fulfilled and done (including the obtaining of any necessary consents, approvals, permits and registration) in order (i) to enable              to lawfully enter into and perform and comply with its obligations under this Agreement, and (ii) to ensure that those obligations are valid, legally binding and enforceable.

10.1.3              ’s entry into and/or performance of or compliance with its obligations under this Agreement do not and will not violate any law to which it is subject.

10.1.4              ’s entry into and/or performance of or compliance with its obligations under this Agreement do not and will not violate any agreement to which it is a party or which is binding on it or its assets.

10.1.5               is solvent and able to pay its dues as and when they fall due and no proceeding has commenced or any action taken or an order made or an effective resolution passed for the dissolution, winding up, reorganization, reconstruction or bankruptcy of              or,

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where relevant, for the appointment of a liquidator, liquidation committee, receiver, administrator, trustee or similar officer of              or of all or part of its business or its assets.

11. WARRANTIES OF BMI

11.1 BMI represents and warrants to                      that:

11.1.1 BMI has the capacity to enter into and perform and comply with its obligations under this Agreement;

11.1.2 BMI’s entry into and/or performance of or compliance with its obligations under this Agreement do not and will not violate any agreement to which it is a party or which is binding on it or its assets;

11.1.3 any copies of the Product delivered to                      will perform substantially in accordance with the Documentation for a period of ninety (90) days from the date of delivery to                     . BMI’s sole liability and                     ’s sole and exclusive remedy for any breach of this Section 11.1.3 will be repair or replacement of the Product. Any replacement Product or corrected Product will be warranted for ninety (90) days. These warranties are void if any defect is caused by abuse or misapplication of the Product, whether or not by accident, and except for the foregoing warranty, the Products are provided “AS IS” without any other warranty.

12. WARRANTY DISCLAIMERS; AND LIMITATION OF LIABILITY

12.1 THE EXPRESS WARRANTIES SET FORTH IN SECTION 11 OF THIS AGREEMENT ARE THE ONLY WARRANTIES WITH RESPECT TO THE PRODUCT AND ANY PART THEREOF. BMI AND ITS LICENSORS MAKE NO OTHER REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, AND EXPRESSLY DISCLAIM ALL OTHER WARRANTIES. INCLUDING WITHOUT LIMITATION. WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. BMI AND ITS LICENSORS DO NOT WARRANT (a) THAT THE PRODUCT OR ANY PART THEREOF WILL BE FREE FROM DEFECTS, ERRORS OR BUGS, OR (b) THAT THE OPERATION OF THE PRODUCT WILL BE SECURE OR UNINTERRUPTED, OR (c) THAT THE PRODUCT WILL BE ABLE TO PROVIDE OR ATTAIN ANY FEATURES, FACILITIES, FUNCTIONS OR CAPABILITIES, OR (d) THAT ANY RESULTS OR INFORMATION THAT MAY BE DERIVED FROM THE USE OF THE PRODUCT WILL BE ACCURATE, COMPLETE, RELIABLE AND SECURE.

12.2 For any breach of the warranties contained in Section 11.1.3 of this Agreement,                     ’s exclusive remedy and BMI’s entire liability will be correction of the defect that caused the breach or the re-performance of the non-conforming Services (as the case may be) at the cost and expense of BMI as soon as reasonably practicable. This warranty is made solely to                      and not to any Reseller or End User.

12.3 IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY LOSS OF PROFITS, LOSS OF BUSINESS, LOSS OF USE OR DATA, INTERRUPTION OF BUSINESS, OR FOR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, EVEN IF SUCH PARTY RECEIVED ADVANCE NOTICE OF THE POSSIBILITY OF SUCH DAMAGES, OR FOR ANY CLAIM BY ANY THIRD PARTY, WHETHER OR NOT ANY OF THE MATTERS AFORESAID ARISES IN CONTRACT OR TORT (INCLUDING NEGLIGENCE) OR MISREPRESENTATION OR BREACH OF STATUTORY DUTY OR ANY DUTY UNDER GENERAL LAW OR ANY OTHER LEGAL THEORY. NEITHER PARTY’S ENTIRE LIABILITY TO THE OTHER UNDER THIS AGREEMENT, REGARDLESS OF

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WHETHER THE CLAIM FOR SUCH DAMAGES IS BASED IN CONTRACT OR TORT (INCLUDING NEGLIGENCE) OR MISREPRESENTATION OR BREACH OF STATUTORY DUTY OR ANY DUTY UNDER GENERAL LAW OR ANY OTHER LEGAL THEORY, (EXCEPT FOR BMI’S DUTY TO INDEMNIFY                      AGAINST INFRINGEMENT AS PROVIDED IN SECTION 15 BELOW) WILL EXCEED THE AMOUNT OF FEES PAID TO BMI BY                      DURING THE INITIAL TERM OF THIS AGREEMENT.

13. SUPPORT SERVICES

13.1 Support services shall be provided as set forth in Exhibit D.

14. INDEMNITY

14.1 BMI will defend, indemnify and hold                     , together with its officers and employees, harmless from any third-party suit or action against                      to the extent such suit or action is based on a claim that the Product infringes any intellectual property rights of a third party where such rights are valid and existing as of the Effective Date and are enforceable in any Berne Convention member nation; and BMI will pay any judgment, loss, cost or expense (including reasonable attorneys fees and costs) incurred in connection with the defense thereof by                     . These obligations do not include any claims to the extent they are based on: (i) use of the Product in violation of this Agreement, or (ii) in combination with any other software or hardware (except as specified in the Documentation), or (iii) any modification made to the Product by anyone other than BMI. The indemnity obligations set forth in this section are subject to: (a)                      giving reasonably prompt written notice to BMI of any such claim(s); (b) BMI having sole control of the defense or settlement of the claim; and (c) at BMI’s request and expense,                      reasonably cooperating in the investigation and defense of such claim(s). To the maximum extent permitted by applicable law, this section states the entire indemnification obligations and liability of BMI with respect to infringement of any intellectual property rights of a third party. Upon BMI’s sole determination, should the Product become, or be likely to become, the subject of a claim of such infringement, or after the entry of any judgment or order not subject to further appeal, that the use of the Product infringes upon the intellectual property rights of any third party, and that such use of the Product must cease, BMI, at its election may, at its own cost and expense, either (a) procure for the End User the right to continue the use and/or receipt of the Product “as is”; (b) modify the Product in such a way that the use thereof does not infringe upon such intellectual property rights of the third party, provided such modification does not materially alter the functionality or performance of the Product; or if neither of the foregoing are commercially feasible, (c) terminate this Agreement by written notice to                      and return any pre paid fees for Services not rendered.

14.2 Subject to the provisions of Section 14.1 of this Agreement,                      will indemnify and hold BMI (together with its officers and employees) harmless from any third-party suit or action against any judgment, loss, cost, or expenses (including reasonable attorneys fees and costs) which may be suffered or incurred by BMI to the extent such suit or action is based on a claim that (i)                      caused personal injury or death of a third-party, or (ii) the                      Trademarks infringe the trademarks of any third-party, or (iii) any warranty claims made by End Users for warranties made by                      that exceed the scope of the warranty expressly set forth herein, or (iv) an act or omission by                      to the extent authorized by this Agreement. The indemnity obligations set forth in this section are subject to: (a) BMI giving prompt written notice to                      of any such claim(s); (b)                      having sole control of the defense or settlement of the claim; and (c) at                     ’s request and expense, BMI cooperating in the investigation and defense of such claim(s).

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15. TERM

15.1 This Agreement will come into force on the Effective Date, and will continue for a time period specified in Exhibit A attached hereto (“Initial Term”), unless earlier terminated in accordance with Section 17 of this Agreement. Thereafter, if there has been no material breach of the terms of this Agreement by                     , at                     ’s option and with BMI’s consent, this Agreement will renew for additional one (1) year periods (“Further terms”) until terminated in accordance with this Section 15 and Section 16 below.                      will provide BMI with a six (6) month notice not to renew. In the event                      fails to provide such notice, such Wind-down period will not exceed the six (6) month period following the termination date, in accordance with section 16.4. The Initial Term and Further Term(s), if any, will be referred to as the “Term”.

16. TERMINATION

16.1 If either Party defaults in the performance of any of its material obligations contained in this Agreement, the non-defaulting Party may terminate this Agreement upon at least thirty days written notice if the default is not cured during such notice period. This Agreement may be terminated by one Party immediately at any time, without notice, if any proceeding is commenced or any action taken or an order is made or an effective resolution is passed for the dissolution, winding up, or bankruptcy of the other Party or, where relevant, for the appointment of a liquidator, liquidation committee, receiver, administrator, trustee or similar officer of the other Party of all or a substantial part of its business or its assets.

16.2 Upon termination or expiration of this Agreement, the rights granted to                      under this Agreement (including for the avoidance of doubt, the rights granted under Sections 2 and 8 of this Agreement) will lapse and terminate, and:

16.2.1                      will immediately cease and discontinue, and/or procure the cessation and discontinuance of the use of the Product, the BMI Trademarks, the Confidential Information and the IP Rights and immediately remove from its letterhead, advertising literature and place of business all references to the Product and the BMI Trademarks and will also cease to represent itself as the authorized distributor of the Product;

16.2.2 Within thirty (30) calendar days after such said termination or expiration of this Agreement,                      will deliver to BMI or destroy all copies of the Software, Documentation, BMI’s Confidential Information, and any other documents, papers, materials or property of BMI which                      may have in its possession or under its control and will furnish to BMI an affidavit signed by an officer of                      certifying that, to the best of its knowledge, such delivery or destruction has been fully effected; and

16.2.3                      will within 30 days of such said termination or expiration of this Agreement, pay to BMI all amounts outstanding in favor of BMI, unless such sums are due earlier, then by the earlier due date.

16.3 Notwithstanding the foregoing, if this Agreement terminates for any reason, BMI may continue to provide to the applicable End Users the Rule Updates, Updates and Upgrades, as available for the original (or “initial”) term of that End User’s End User License Agreement. Upon termination, BMI will, upon notice to                     , either: (i) terminate the End User License Agreement, or (ii) give notice to                      and the End User that BMI will assume performance of all obligations under the End User License Agreement. Distributor agrees that such notice will be binding on                      and                      will be deemed, as of the date specified in the notice, to have assigned all its rights and benefits in and to the End User License

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Agreement to BMI or its agent, and the parties will work together in good faith to provide for the orderly transfer of such End Users to BMI.

16.4 Termination will be without prejudice to any accrued right or liability or to any other obligation surviving termination or to any rights or remedies of the Parties under this Agreement or at law. Upon termination or expiration of this Agreement the provisions of Sections 1, 3, 4, 5, 9, 16, 17, 18, 19.1, 19.4, 19.9, 19.12, 19.13, and all payment obligations incurred prior to the effective date of such termination or expiration will survive. All other provisions of this Agreement will terminate. In the event that this Agreement is terminated for any reason other than                     ’s uncured material breach, then BMI agrees that                      may continue using the Product subject to all the terms contained in this Agreement for a period not to exceed six (6) months following the termination date or until the expiration of its End User License, but in no event will such a period exceed one (1) year from the termination date (Wind-down Period). For termination due to non-renewal, the Wind-down Period will not exceed six (6) months following the termination date.                     ’s obligations to BMI for the payment of Fees due will not be relieved by the effective termination of this Agreement under such circumstances. At the end of such Wind-down Period, or immediately in the case of termination due to                     ’s uncured breach,                      shall cause End Users to immediately cease use of the Product and either return or destroy all copies of the Product.

17. CONFIDENTIALITY.

Each Party agrees to maintain all Confidential Information of the other Party in confidence to the same extent that it protects its own similar Confidential Information (and in no event using less than a reasonable degree of care) and to use such Confidential Information only as permitted under this Agreement. The receiving Party will not provide the Confidential Information of the disclosing Party to any third party, nor may it disclose such information to any employee of the receiving Party, except for the purpose of performing this Agreement, and unless such person has entered into an agreement with the receiving Party containing confidentiality provisions covering the Confidential Information that are at least as restrictive as those set forth in this Agreement. For purposes of this Agreement “Confidential Information” will mean audio, visual, oral or physical information marked “Confidential” or could reasonably be considered of a proprietary or confidential nature, provided that for information disclosed orally, a written summary of such information is provided to the receiving Party within thirty days of initial oral disclosure; and provided that email probe addresses, information disclosed in design reviews and any pre-production releases of the Product provided by BMI will be considered Confidential Information whether or not marked as such. Each Party agrees to take all reasonable precautions to prevent any unauthorized disclosure or use of Confidential Information. The foregoing restrictions on disclosure and use will survive for three (3) years following termination of this Agreement but will not apply with respect to any Confidential Information which (i) was or becomes publicly known through no fault of the receiving Party; (ii) was rightfully known or becomes rightfully known to the receiving Party without confidential or proprietary restriction from a source other than the disclosing Party; (iii) is independently developed by the receiving Party without reference to the Confidential Information; and (iv) the receiving Party is compelled to disclose pursuant to a court order or the requirements of any stock exchange; provided that the receiving Party has given the disclosing Party reasonable notice and opportunity to contest such compulsion to disclose.

18. GENERAL PROVISIONS

19.1 Any notice or demands required or permitted by this Agreement must be in writing and must be sent personally or by facsimile, recognized commercial overnight courier, or pre-paid registered or certified mail. Notices will be addressed as set forth in Exhibit A attached hereto. Any Party may change its address or facsimile for the purposes hereof by written notice to the other Party. Notices will be effective (a) if delivered personally, on the date of delivery; (b) in the case of domestic mail, if transmitted by pre-paid mail, on the date falling seven (7) days after posting, provided that it will be sufficient to show that the envelope

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containing such notice or information was properly addressed and sent by pre-paid post and that it has not been returned to sender to prove that such notice or information has been duly sent; (c) in the case of international mail, if transmitted by prepaid registered air-mail, on the date falling fourteen (14) days after posting; provided that it will be sufficient to show that the envelope containing such notice or information was properly addressed and sent by prepaid post and that it has not been so returned to the sender to prove that such notice or information has been duly sent; and (d) if transmitted by facsimile, on the date of transmission, provided that it will be sufficient to show that the facsimile has been dispatched with the appropriate answer back code received to prove that such facsimile has been duly sent.

19.2 The waiver by either Party of a breach of or a default under any provision of this Agreement will not be construed as a waiver of any subsequent breach of the same or any other provision of this Agreement, nor will any delay or omission on the part of either Party to exercise or avail itself of any right or remedy that it has or may have hereunder operate as a waiver of any right or remedy. No amendment or modification of any provision of this Agreement will be effective unless in writing and signed by a duly authorized signatory of BMI and                     .

19.3 Neither Party may assign or otherwise transfer any of its rights, obligations or licenses hereunder without the prior written consent of the other Party, which consent will not be unreasonably withheld. Any purported transfer or assignment in violation of this section will be void. Notwithstanding the foregoing, either Party may assign this Agreement without consent (i) to any entity in which the Party has a greater than 50% equity ownership interest or of which the Party has voting control, (ii) to any entity that buys 50% or more of that Party’s stock or all or substantially all of that Party’s assets, or (iii) as part of a merger, reorganization or re-incorporation; provided, however, the non-assigning party may terminate this Agreement upon thirty (30) days’ written notice within sixty (60) days following an assignment. Subject to the foregoing, the provisions of this Agreement will apply to and bind the successors and permitted assigns of the Parties.

19.4 This Agreement will be governed in all respects by the substantive laws of the State of California, United States of America (excluding conflict of laws rules) as applied to agreements entered into and to be performed entirely within the State of California between California residents, without regard to the U.N. Convention on Contracts for the International Sale of Goods. Any dispute regarding this Agreement will be subject to the non-exclusive jurisdiction of the California state courts in and for San Francisco County, California (or, if there is exclusive federal jurisdiction, the United States District Court for the Northern District of California), and the Parties agree to submit to the personal and non-exclusive jurisdiction and venue of these courts.

19.5                      understands that BMI is subject to regulation by agencies of the U.S. government, including the U.S. Department of Commerce, which prohibit export or diversion of certain products and technology to certain countries. Any and all obligations of BMI to provide the Product or other materials, as well as any technical assistance, will be subject in all respects to such United States laws and regulations and will from time to time govern the license and delivery of technology and products abroad by persons subject to the jurisdiction of the United States, including the Export Administration Act of 1979, as amended, any successor legislation, and the Export Administration Regulations issued by the Department of Commerce, International Trade Administration, or Office of Export Licensing.                      warrants that it will comply in all respects with any export and re-export restrictions and obtain an export license (if necessary) for the marketing and distribution of the Product by                     . Each Party will comply with all applicable laws, rules and regulations in its performance under this Agreement.

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19.6 The relationship of the Parties under this Agreement is that of independent contractors, and no agency, partnership, joint venture, or employment is created as a result of this Agreement and neither                      nor its agents have any authority of any kind to bind BMI in any respect whatsoever.

19.7 The captions and section and paragraph headings used in this Agreement are inserted for convenience only and will not affect the meaning or interpretation of this Agreement.

19.8 If the application of any provision or provisions of this Agreement to any particular facts of circumstances will be held to be invalid or unenforceable by any court of competent jurisdiction, then: (a) the validity and enforceability of such provision or provisions as applied to any other particular facts or circumstances and the validity of other provisions of this Agreement will not in any way be affected or impaired thereby; and (b) such provision or provisions will be reformed without further action by the Parties, to and only to, the extent necessary to make such provision or provisions valid and enforceable when applied to such particular facts and circumstances; and, in any event, the remainder of this Agreement will remain in full force and effect.

19.9 If any exchange control or other restrictions prevent or threaten to prevent remittance to BMI of any money owed under this Agreement,                      will immediately notify BMI in writing and follow BMI’s instructions in respect of the money to be paid, including if required, depositing the same with any bank or other person at such location as may be designated by BMI.

19.10 Either Party will be excused from any delay or failure in performance hereunder, except the payment of monies by                      to BMI, caused by reason of any occurrence or contingency beyond its reasonable control, including but not limited to, acts of God, earthquake, labour disputes and strikes, riots, war, shortages, and governmental regulations. The obligations and rights of the Party so excused will be extended on a day-to-day basis for the period of time equal to that of the underlying cause of the delay; provided that such Party will give notice of such force majeure event to the other Party as soon as reasonably possible.

19.11 Upon the prior written approval of the Parties, the Parties will issue a joint press release announcing the relationship, and                      agrees to allow BMI to use                     ’s name in such release, and agrees to participate in such press release by providing favorable comments from an appropriate employee with respect to the Product. BMI agrees to allow                      to use BMI’s name in such release, and agrees to participate- in such press release by providing favorable comments from an appropriate employee with respect to the Product and BMI’s relationship with                     . In addition,                      will be invited to participate from time to time, in its sole discretion, in any press launch event organized by BMI.

19.12 The Parties acknowledge that any breach of certain provisions of this Agreement may cause the other Party irreparable harm and significant injury to an extent that may be extremely difficult to ascertain. Accordingly, both Parties will have, in addition to any other rights and remedies available to it at law or in equity, the right to seek injunctive relief to enjoin any breach or violation of this Agreement.

19.13 The remedies under this Agreement are cumulative and not exclusive of any other rights or remedies whether provided by law or otherwise.

19.14 This Agreement, including the Exhibits attached hereto, constitutes the entire agreement between the Parties concerning the subject matter hereof and supersedes all proposals or prior agreements whether oral or written, and all communications between the Parties relating to the subject matter of this Agreement and all past courses of dealing or industry custom. The pre-printed terms and conditions on any purchase order or other written instrument submitted by either Party will have no force and effect and are hereby rejected. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which taken together will constitute one and the same instrument.

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IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement effective as of the Effective Date.

BRIGHTMAIL, INC.
By:		By:
	Signature		Signature
Name:	Mike Irwin	Name:
Title:	VP Finance	Title:
Date:	, 2002	Date:	, 2002

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[Exhibit to Exhibit G - EXHIBIT A]

LICENSE

1. THE PRODUCT

a. Software: Anti-Spam

b. Services: Rules, Rule Updates, and support services throughout the Term of this Agreement, such Rule Updates to be automatically or, if necessary, manually provided by BMI to End Users utilizing the then in effect BMI general, tested and production grade method for rule distribution. Updates and Upgrades, if any, will be provided to                     , for                     ’s subsequent distribution to its End Users. If                      notifies BMI, in                     ’s sole discretion, that a particular End User is to be removed from Service (for non-payment or otherwise), BMI will no longer provide Rule Updates to such End User.

c. Any and all Documentation related to the Software and Services.

d. Any and all Marketing Materials and Training Materials.

2. LICENSES GRANTED TO                      FOR USE ON                     ’S MAIL PLATFORM.

a. Initial Term: 2 years from deployment date of the first End User License Agreement.                      will provide BMI written notice of such date.

b. Territory: worldwide, except for Afghanistan, Cuba, Iran, Iraq, Libya, North Koreas, Sudan, Syria and other Embargoed countries as updated by the U.S. government, throughout the term of the Agreement.

c. Support Servers: BMI will provide                      with one copy for                     ’s use in accordance with Section 2.2.

d. For use on End User’s Sun Solaris operating system, only.

3. NOTICES. Below is the contact information for the Parties:

If to                     :	If to BMI:
Attention:	Attention: Daphne L. Holly 301 Howard Street, 18th Floor San Francisco, CA 94105 Fax: 415 348-9636

Fax:

4. Relationship Managers:

For Brightmail:

415-365-

email address: @brightmail.com

For                     :

email address:

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[Exhibit to Exhibit G - EXHIBIT B]

Minimum Terms and Conditions for End User License Agreements

1. Third Party Beneficiary. Brightmail, Inc. (“BMI”) shall be a direct and intended third-party beneficiary under this Agreement.

2. Intellectual Property Rights. The Software is subject to copyright laws and international copyright treaties and is the intellectual property of BMI or its licensors. End User shall not copy, reproduce, use, perform, publicly display or allow access to the Software, shall not distribute the Software, and shall not, nor shall it or permit any third party to modify, adapt, translate or prepare derivative works from the Software, or decompile, reverse engineer, disassemble or otherwise attempt to derive source code from the Software.

3. Audit.              and BMI will have the right, exercisable not more than once every twelve (12) months, to inspect upon reasonable notice and during End User’s regular business hours, End User’s relevant records to verify End User’s compliance with the terms of this Agreement and/or Distributor’s compliance with its obligations to BMI.

4. NO OTHER WARRANTIES.             , BMI, AND/OR THEIR RESPECTIVE SUPPLIERS, PROVIDE THE SOFTWARE, INCLUDING ACCOMPANYING MATERIALS, “AS IS” AND DISCLAIM ALL WARRANTIES, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AND EXPRESSLY DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE SOFTWARE, INCLUDING THE ACCOMPANYING MATERIALS.              AND BMI DO NOT WARRANT THAT THE SOFTWARE, INCLUDING ANY OF ITS DOCUMENTATION, ARE ERROR-FREE, THAT OPERATION OF THE SOFTWARE WILL BE SECURE OR UNINTERRUPTED, OR THAT THE SOFTWARE WILL MEET THE REQUIREMENTS OF END USER, AND HEREBY DISCLAIM ANY AND ALL LIABILITY ON ACCOUNT OF ANY OF THE FOREGOING. THE ABOVE LIMITATION SHALL APPLY TO THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW.

5. LIMITATION OF LIABILITY. IN NO EVENT WILL             , BMI OR THEIR RESPECTIVE LICENSORS OR SUPPLIERS BE LIABLE FOR ANY LOSS OF PROFITS, LOSS OF USE, BUSINESS INTERRUPTION, LOSS OF DATA, COST OF COVER OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND IN CONNECTION WITH OR ARISING OUT OF THE FURNISHING, PERFORMANCE OR USE OF THE SOFTWARE OR SERVICES PERFORMED HEREUNDER, WHETHER ALLEGED AS A BREACH OF CONTRACT OR TORTIOUS CONDUCT, INCLUDING NEGLIGENCE, EVEN IF             , BMI OR THEIR RESPECTIVE LICENSORS OR SUPPLIERS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN ADDITION,             , BMI AND THEIR RESPECTIVE LICENSORS AND SUPPLIERS WILL NOT BE LIABLE FOR ANY DAMAGES CAUSED BY DELAY IN DELIVERY OR FURNISHING THE SOFTWARE OR SAID SERVICES.             , BMI AND THEIR RESPECTIVE LICENSORS AND SUPPLIERS LIABILITY UNDER THIS AGREEMENT FOR DIRECT, INDIRECT, SPECIAL, INCIDENTAL AND/OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, RESTITUTION, WILL NOT, IN ANY EVENT, EXCEED THE FEE PAID BY END USER TO DISTRIBUTOR UNDER THIS AGREEMENT.

6. End User Agreements. Require, or have required, by contract, that each End User agree to terms, that are no less restrictive than the End User Agreement (“EUA”), which can be found at

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CONFIDENTIAL TREATMENT REQUESTED

http://www.brightmail.com/end_user_agreement.html. Notwithstanding anything contained herein to the contrary, End User will indemnify, defend, and hold BMI harmless from and against any and all claims, losses and liabilities (including reasonable and incurred attorneys’ fees) arising from or otherwise due to a breach or alleged breach by End User of this Section.

7. Probes. Provide BMI, with *, created for *, all of which are found on *. The following apply to End User Probes:

i) End User agrees to provide * of all * found on * and * or *, whichever is greater, for BMI’s use in detecting content-related risks and for use in BMI’s internal research and development efforts.

ii) BMI will receive the End User Probes from End User within * of the Effective Date of the agreement between End User and             .

iii)             , End User and BMI will consider the End User Probes Confidential Information, notwithstanding anything contained herein to the contrary. The Parties’ obligations of confidentiality pertaining to the End User Probes will remain in effect for a period of * after the termination date of this Agreement. End User may not themselves, or through a third party, use the End User Probes for any purpose without the express written consent of BMI.

8. End User specifically warrants that it will not process Spam in such a way as to negatively impact the Product, as determined by BMI in its sole discretion. Specifically, End User agrees that if it chooses to delete Spam instead of offering its Customers BMI’s Gray Mail Service, End User will not send any error-type messages to the senders of the Spam, notifying them that the Spam did not reach Customer(s), or otherwise alerting the sender of Spam to the presence of the Product. In addition, End User also agrees to defend, indemnify, and hold BMI harmless from any third-party suit (including suits brought by Customers) if End User deletes Spam without giving its Customer(s) a reasonable chance to review the Spam.

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[Exhibit to Exhibit G – EXHIBIT D PRODUCT SUPPORT]

1.              shall be responsible for taking first call from End Users (“First Line Support”) and shall not refer any End User callers to Brightmail. Brightmail shall be responsible for providing back up technical support (“Second Line Support”) to             . Support/maintenance shall start upon product acceptance by the End User. Support/maintenance fees shall be payable to Brightmail if and only if the End User contracts for support from             . Brightmail’s support/maintenance fees for Second Line Support to              are set forth in Exhibit B.

2 The parties agree to use the following procedure to resolve support/maintenance problems with respect to the Product:

2.1              will first attempt to isolate the source and nature of the problem using resources reasonably at its disposal. If investigation indicates the problem may be caused by a fault in the Product,              will collect pertinent information necessary for resolution, and use commercially reasonable efforts to resolve the problem. If              can not resolve the problem, it will collect the pertinent information that may assist and expedite resolution, and then report the problem and information by telephone or in writing (email accepted) to Brightmail as set forth herein.

2.2 Brightmail and              shall reasonably and in good faith assign a priority to the problem. Brightmail shall use commercially reasonable efforts in responding to the problem with a Product workaround or patch, closing the problem with a Product update or upgrade, and reporting status, as follows:

Priority	Log Call	Response Time	Closure Time	Status Report
		(Work Around)	(Product Fix)
Critical	2 Hours	Two (2) Business Days	Ten (10) Business Days	Weekly, Daily for escalated sites
Non-Critical	24 Hours	Eight (8) Business Days	First Major or Minor At Product Release after                     ’s the next Thirty (30) request Business Days

It is recognized by              (2) Business Days that such level of effort will not always result in a problem’s resolution according to the above timetable. For the purpose of this paragraph: “Critical” shall mean use of the Product is severely impacted or stopped; “Non-Critical” shall mean use of the Product is ongoing; and “Business Day” shall mean a day during which Brightmail conducts its regularly scheduled business operations, excluding holidays observed by Brightmail.

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CONFIDENTIAL TREATMENT REQUESTED

2.3. Brightmail will provide the following Product support/maintenance services to              at no additional charge to fees stated in Exhibit B:

2.3.1 Access to Brightmail’s technical support personnel for problem resolution. Said personnel shall be available for telephone contact Monday – Friday, 8 a.m. to 5 p.m. PST time, on normal business days. Brightmail shall also make available, on a twenty-four (24) hour three-hundred-sixty-five (365) days per year basis, a means of reporting errors or failures in the Product, by electronic mail, or voice mail;

2.3.2 The right to use the software for support/maintenance purposes at no charge. Brightmail shall provide one (1) copy of each Product purchased and or licensed by              and              may copy such Product, object code only, but only for the purpose of providing End User support/maintenance;

2.3.3 One (1) copy of the user manuals and/or Product documentation made generally available to other resellers or End-Users for all Product purchased and or licensed by             ,              may copy such Product documentation, but only for the purpose of providing End User support/maintenance;

2.3.4 One (1) copy of all available or released support documentation (e.g., technical bulletins and data sheets) made generally available to other resellers or End-Users for all Product purchased and or licensed by             ,              may copy such support documentation, but only for the purpose of providing End User support/maintenance;

2.3.5 Access to any electronic technical bulletin board or “web page” containing the above information;

2.3.6 One (1) copy of all Product workarounds, patches and corrections and/or access to the same through an electronic means and the right to distribute to End-Users which              has under a current support/maintenance contract;

2.3.7 One (1) copy of all updates/upgrades and/or access to same through an electronic means and the right to distribute to End-Users which              has under a current support/maintenance contract; and

2.3.8 Support of the current release/version of the Product, and support of one (1) release/version back, for a period not to exceed 12 months from the date of the release of the current release/version. For example, the current release upon signing of the Agreement is release 3.0. Brightmail’s obligation of Support will not be for any versions earlier than 2.1.

2.4 Brightmail’s obligations to provide service and resolve problems under this section shall extend only to such problems duly reported by              and which Brightmail, using reasonable efforts, is able to duplicate.

2.5 Brightmail agrees to give              one-hundred-twenty (120) days prior notice of Product discontinuance. Brightmail will support products obsoleted for a period of one (1) year after Product discontinuance.

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EXHIBIT H

REDACTED VERSION OF THE AGREEMENT AS OF THE AMENDED DATE FOR

NOTICE TO

RESELLERS OF REQUIREMENT TO COMPLY WITH TERMS

CONFIDENTIAL TREATMENT REQUESTED

AMENDED AND RESTATED

SYMANTEC SERVICE PROVIDER AGREEMENT

THIS AMENDED AND RESTATED SYMANTEC SERVICE PROVIDER AGREEMENT (The “Agreement”) is entered into by and between Symantec Corporation, a Delaware corporation maintaining its principal place of business at 20330 Stevens Creek Boulevard, Cupertino, California 95014, and Symantec Limited, an Irish corporation maintaining its principal place of business at Ballycoolin Industrial Park, Blanchardstown, Co. Dublin 15, Ireland (collectively, “Symantec”) and Brightmail, Inc., a California corporation maintaining its principal place of business at 301 Howard Street, Suite 1800, San Francisco, California 94105 (“Brightmail”) (the parties collectively referred to herein as the “Parties” and individually as a “Party”).

In consideration of the mutual covenants which follow, Symantec and Brightmail agree:

XI. DEFINITIONS

The capitalized terms below shall have the following meanings when used in this Agreement:

“Affiliate(s)” shall mean any wholly owned, meaning one hundred percent (100%) stock ownership, subsidiary of an Authorized Sublicensee. Brightmail covenants that it will enforce on Symantec’s behalf, the terms of this Agreement as to all Affiliates under Existing Business agreements that Brightmail has in place on the Effective Date of this Agreement that do not meet this definition. All renewals or extensions of Existing Business agreements and all New Business must comply with this definition.

“Amended Date” means the date on which the original Agreement was amended and restated, which is March 28, 2003.

“Americas” means both North America and South America geographical regions.

“Application Service Providers or “ASP” means an entity that provides application services remotely for a fee or other consideration to its Authorized Users, none of whom are under the ASP’s immediate employ or the employ of any parent or subsidiary, except in the situation where the employee purchases or subscribes to the Service as an Authorized User outside of its normal business usage, but not in the case where the ASP utilizes its own email system internally as the default option for all employees, which scenario then requires the ASP to obtain an enterprise, internal use license from Symantec.

“AsiaPac/EMEA” means both the Asian Pacific rim countries and EMEA which consists of Europe, Middle East and Africa geographical regions.

“Authorized Users” means and is calculated as follows: (A) for all New Business and Internal Users, each and every (i) unique consumer or (ii) home office at a residential address, (iii) small businesses which are up to one hundred (100) Authorized Users, but not including any medium or large Enterprises of one hundred (100) or more Authorized Users, except where allowed for under the license grant Section III(2)(v), and (iv) each Internal User of an Authorized Sublicensee, per the license grant set forth in Section III(2)(vi), wherein in each of the foregoing, the Authorized User is either counted as an unique mailbox being scanned and protected using the Licensed Product, or as an email address, or an account that is subscribing to, the Licensed Product, which is active at any time during the Term, and which is as clearly indicated in the reporting to Symantec, and (B) for all Existing Business and Enterprises, each and every unique e-mail box

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being scanned and protected using the Licensed Product, or as an email address, or an account that is subscribing to, the Licensed Product, which is active at any time during the Term or as determined by an alternative definition which was approved in writing by Symantec prior to the Effective Date and specifically detailed on Exhibit B.

“Authorized Sublicensee” means a firm, company, organization, or other third party that provides, for a fee or in certain situations, for no fee but pursuant to some other subscription arrangement or agreement, Internet services, online application hosting services, or similar on-line electronic services to its Authorized Users, which may include ISPs, ASPs, and wireless operators that offer Internet access and other similar Services to its own Authorized Users but only pursuant to its right to use the Licensed Products on such Authorized Sublicensee’s own servers subject to and in accordance with the terms of this Agreement. All Authorized Sublicensees are Service Providers. Authorized Sublicensee shall include its Affiliates.

“BMI Product” means Brightmail’s own Antivirus scanning and Antivirus cleaning components and analysis and filtering systems that enhance the integrity and security of electronic mail systems for the benefit of the Authorized Users.

“BMI Service” means the service provided by which consists of incorporating the Licensed Product with Brightmail’s own anti-virus product and providing support for the same which is for the ultimate benefit of the Authorized Users as provided by the Authorized Sublicensees and is run on servers owned or maintained by the Authorized Sublicensee.

“Converted Business” means those certain Authorized Sublicensees under existing contracts prior to the Effective Date, which are set forth in Exhibit F, and only consists of business wherein Brightmail generates thirty percent (30%) or less on the margin (or as otherwise specifically approved by an officer of Symantec in writing as indicated on Exhibit F) based upon the royalty schedule set forth in the Prior Agreement as of the Effective Date and which royalty schedule is restated and set forth in Exhibit A of this Agreement.

“Documentation” means written guides describing the use and operation of the Licensed Product provided by Symantec to Brightmail.

“Effective Date” means July 1, 2002.

“Enterprise” means individually and collectively those legal entities which are commercial businesses, other than ISPs, ASP and wireless operators, that would use the Licensed Product for its own internal use only, in conjunction with that entity’s internal business needs and are typically consisting of one hundred (100) or more Authorized Users.

“Existing Business” means (i) all Authorized Sublicensees that provide the Licensed Product to Authorized Users or (ii) all Enterprises, which were counted and defined as “Mailboxes” under an agreement pursuant to the Prior Agreement and existing prior to the Effective Date, to receive the BMI Services. Such existing agreements were entered into as a result of either a direct sale from Brightmail or one of its authorized Resellers, under the Prior Agreement and prior to the Effective Date of this Agreement. This definition excludes all Converted Business, New Business and all accounts listed in Exhibit B.

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“First Date of Use” means the first date after the termination of the Evaluation Period if the Authorized Sublicensee accepts the BMI Service and commercially deploys the BMI Product which incorporates the Licensed Product.

“Internal User(s)” means for purposes of Section III(1), only those employees, consultants and/or contractors who work, and board members of Brightmail, located within the Territory, not to exceed a total of one twenty-five hundred (125) employees initially, with a twenty percent (20%) increase per every twelve (12) months of the Term, starting on the first anniversary date of the Term and for purposes of Section III(2)(vi) those employees, consultants and/or contractors who work for the Authorized Sublicensee, wherein in both cases, each Internal User is counted as a single Authorized User.

“Internet Service Provider” or “ISP” is an entity that provides Internet access and messaging services for a fee or other consideration to its Authorized Users, none of whom are under its immediate employ or the employ of any parent or subsidiary, except in the situation where the employee purchases or subscribes to the Service as an Authorized User outside of its normal business usage, but not in the case where the ISP utilizes its own email system internally as the default option for all employees, which scenario then requires the ISP to obtain an enterprise, internal use license from Symantec.

“Licensed Product” means the proprietary antivirus scanning and decomposition software code and program(s) as described in Exhibit A and all versions and updates thereto, and includes any corrections, bug fixes, enhancements, virus definitions, anti-virus rules or other modifications, in each case as made generally available by Symantec to its customers during the Term.

“Minimum Commitment” means both the Minimum Commitment Payments for Existing Business and the Minimum Commitment Payments for New Business, as outline in Exhibit A, under Section III.2.

“New Business” means and includes (i) all Authorized Sublicensees with agreements to provide the Licensed Product to their Authorized Users under an agreement with Brightmail or Reseller that is entered into on or after the Effective Date of this Agreement, (ii) all renewals, amendments that extend the time period of the agreement with the Authorized Sublicensees and extensions for Authorized Users and Authorized Sublicensees receiving BMI Services after the Effective Date, and (iii) all Converted Business.

“Payment(s)” means all amounts due under the terms of this Agreement, which include any Minimum Commitment Payments, any license and other fees related to the Licensed Products, as calculated based upon the number of Authorized Users and any other prices for the Licensed Product(s) and support, as indicated in Exhibit A hereto.

“Prior Agreement” means that agreement superseded by this Agreement, known as the Software Manufacturer License and Reseller Agreement by and between Symantec Corporation and Brightmail, Inc., effective April 3, 2000, as amended thereafter by Amendment One, with an effective date of July 31, 2000, Amendment Two with an effective date of August 31, 2000 and Amendment Three with an effective date of December 6, 2001.

“Reseller(s)” means those authorized resellers of Brightmail that have (i) entered into the standard reseller agreement with Brightmail, a copy of which is attached hereto as Exhibit G or an equivalent agreement with substantially the same terms as the copy attached hereto as Exhibit G, (ii) an agreement with Brightmail that requires the reseller to comply with same terms that Brightmail is required to comply with under this

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Agreement, in all respects, including but not limited to, reporting and protection of Symantec’s intellectual property rights, and (iii) an agreement with Brightmail that names Symantec as a third party beneficiary; and is an authorized Reseller of Brightmail wherein Brightmail agrees to fully enforce all of the foregoing requirements set forth in this provision on Symantec’s behalf.

“Service” means the service provided by Authorized Sublicensees as a Service Provider to its Authorized Users, using the Licensed Product provided pursuant to Brightmail’s own service (as defined in the “BMI Service” definition) for the ultimate benefit of the Authorized Users and are run on servers owned or maintained by the Authorized Sublicensee.

“Service Provider” means a firm, company, or organization that provides, for a fee or in certain situations, for no fee but pursuant to some other subscription arrangement or agreement, Internet services, online application hosting services or similar on-line electronic services to its Authorized Users or other hardware or software products or applications and related support, which can be utilized therein. This definition excludes entities that are providing such Internet services solely to persons under the entity’s immediate employ or the employ of any parent, subsidiary, or affiliate firm, company, or organization of the entity. This definition specifically includes all franchise arrangements wherein franchisees are provided Services by franchisors.

“Term” means the time period in which the arrangement between the Parties is in place, as determined and defined in Section IX of the Agreement.

“Territory” means world-wide.

XII. BRIGHTMAIL OBLIGATIONS

1. Other Products.

During the Term of this Agreement, Brightmail shall not market or sell as part of its BMI Service any products that provide anti-virus scanning or repair services other than those which are Symantec products or contain the Licensed Products.

2. Term or Subscription License, Reseller Rights.

Brightmail specifically represents and acknowledges that any use by any third party of any Licensed Product must be pursuant to the terms under the license grant set forth in Section III and the related Payment terms and cannot be handled as an actual sale of a perpetual license under a Reseller transaction.

3. No Further Sublicensing.

Brightmail may not authorize, and must contractually prohibit all Authorized Sublicensees and Authorized Users from further sublicensing the Licensed Products to another third party other than as specifically allowed in the grant of license Section III, below.

XIII. GRANT OF LICENSE AS SERVICE PROVIDER FOR SERVICES

Brightmail represents and warrants (and hereby acknowledges that the following licenses are conditioned upon the following representations and warranties) that Brightmail is, as of the Effective Date and during the Term of the Agreement will be, a Service Provider and a “Licensee” under the terms of this Agreement.

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1. Internal Use.

In accordance with the terms of this Agreement, Symantec grants to Brightmail, and Brightmail accepts from Symantec, a limited, nonexclusive, non-transferable license to use the object code version of the Licensed Product consisting of Norton Antivirus scanning and decomposition libraries for the Term of this Agreement only, without Payment, solely to provide the BMI Service to the Internal Users. This internal use license shall not be assignable; and any transfer is void in the event of an acquisition, merger, any type of change of control or sale of all or substantially all the assets of Brightmail, regardless of whether or not Symantec agrees to the assignment of this Agreement pursuant to Section X.11.e. hereof. Brightmail must report any usage over the allowed number of Internal Users and any failure to do so will result in this license being automatically rescinded and this license shall become void and null. Any usage above the allowed number of Internal Users will be at the then current Enterprise license rates set forth herein.

2. Service Provider Use.

In accordance with the terms of this Agreement, Symantec grants to Brightmail, and Brightmail accepts from Symantec, a limited, nonexclusive, non-transferable license to use the object code version of the Licensed Product consisting Norton Antivirus scanning and decomposition libraries for the Term of this Agreement only, for the purpose of sublicensing an integrated product with the BMI Product solely to provide the BMI Service through Authorized Sublicensees to Authorized Users located in the Territory as follows: (i) to create an antivirus module from the Norton Antivirus scanning and decomposition libraries, and upload this antivirus module, in executable form only, on Brightmail’s own servers to detect messages containing viruses and separate infected messages, (ii) to create an antivirus cleaning component that attempts to clean the infected messages using the Norton Antivirus scanning and decomposition libraries of the Licensed Product, (iii) obtain antivirus updates from Symantec Security Response ftp servers when available by automatic download into Brightmail’s BLOC, which can automatically test it for consistency and then encrypt and distribute the updates to the Authorized Sublicensees (all of the foregoing collectively referred to as the Licensed Product), (iv) directly or through Resellers, allow Authorized Sublicensees to upload the Licensed Product, in executable form only, onto its own servers to provide the Service, (v) as of the Effective Date, with Payments starting from the Amended Date, for a period of one (1) year from the Amended Date, unless renewed per the renewal terms in Section IX, allow Authorized Sublicensees to provide the Licensed Product to Enterprises where the Authorized Sublicensees hosts the email services of the Enterprise and Enterprise is not hosting any part of the Service and has no access to the actual Licensed Product software itself, and (vi) as of the Effective Date, with Payments starting from the Amended Date, for a period of one (1) year from the Amended Date, unless renewed per the renewal terms in Section IX, allow all Authorized Sublicensees to use the Licensed Products for the benefit of their Internal Users. The Service will be deemed to be provided in the countries in which the Authorized Sublicensee’s servers are located for purposes of Payments and Taxes under the terms of this Agreement. Brightmail is further granted a license to use the Documentation solely in its capacity as a Service Provider to provide the BMI Service to Authorized Sublicensees and to allow Authorized Sublicensees to use the Documentation to provide the Service to its own Authorized Users, including product support, as necessary. Brightmail may make copies of the Licensed Product and the Documentation solely for the purpose of providing the BMI Service to its Authorized Sublicensees, either directly or through Resellers, as authorized in this Section. Brightmail and the Authorized Sublicensees are authorized to run the Licensed Product on the mail STMP operating systems and platforms of Win2000 and Solaris, only. If and only if Symantec ever supports NAV API, Decomposer and the definition set on AIX or specific variations of Linux operating systems for SMTP gateways under Symantec’s standard support programs, then Brightmail will be given the right to leverage those environments. The foregoing shall only be distributed through a Reseller if the following conditions precedent are met: (i) the Reseller and Brightmail have executed a reseller agreement in a form substantially similar to the one attached hereto as Exhibit G with Brightmail, (ii) Brightmail has contractually obligated the Reseller to comply with the terms of this

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Agreement as they are applicable to Brightmail in regards to all sales of BMI Product which incorporate the Licensed Product, and that such Resellers have contractually agreed to and possess a copy of the redacted version of this Agreement, attached hereto as Exhibit H, which Brightmail agrees to so provide and document as part of a formal notice to the Reseller, (iii) Brightmail names Symantec as a third party beneficiary to its agreements with the Reseller and (iv) Brightmail hereby covenants and warrants to Symantec that it will enforce the terms of this Agreement on Symantec’s behalf as to such Reseller.

3. Evaluation Licenses.

In addition, Symantec grants Brightmail, a limited, nonexclusive, non-transferable license to sublicense during the Term of this Agreement, only, the Licensed Product as incorporated into the BMI Product to the Authorized Sublicensee, which will not cumulatively exceed ninety (90) days, which period starts on completion of installation of the Licensed Product for evaluation and ends on the designated ending date of evaluation which requires Brightmail to ensure that all use is completely terminated by Brightmail actively stopping the virus and rules definitions; and such time period again shall resume on the signing of a contract for the BMI Services and ending on the completion of the installation (the “Evaluation Period”). The evaluation of such BMI Product may be provided in a pre-production testing or production environment; provided that Brightmail operates the evaluation as follows: (i) a standard written evaluation license protecting the intellectual property rights and interests of all licensors (including Symantec) of the product provided under the Service is fully executed in each case, and (ii) such an evaluation agreement requires either the return of the evaluated software product or a signed certification of destruction under penalty of perjury of the evaluated software product, and (iii) continued use after the Evaluation Period is under a final agreement to receive the BMI Service having been executed and a final version of the BMI Product containing the Licensed Product is then provided for continued Service (the “Evaluation(s)”). At the end of the Evaluation Period, Brightmail will require Authorized Sublicensee to remove or Brightmail shall disable the BMI Product which incorporates Licensed Product in its entirety, unless such Authorized Sublicensee has agreed to purchase the BMI Service from Brightmail or a Reseller and Brightmail makes the applicable Payments to Symantec. If an Evaluation continues past the allowed Evaluation Period, Brightmail will be fully responsible for Payment to Symantec in accordance with Exhibit A. Brightmail shall not authorize more than one (1) Evaluation or any extended Evaluation Period per Authorized Sublicensee, per each version of the Licensed Product. Brightmail must provide Symantec with monthly reports which indicate the (i) date and identity of an Authorized Sublicensee who is under Evaluation, (ii) date and identity of an Authorized Sublicensee who has just ended an evaluation with a total of time such entity was under Evaluation, (iii) the date and identity of any Authorized Sublicensee who has signed an agreement for BMI Services and has the Licensed Product for installation and (iv) the date and identity any Authorized Sublicensee who has signed an agreement for BMI Services and has completed the Licensed Product installation and identify the total Evaluation Period applied to such Authorized Sublicensee (the “Evaluation Report”). Such Evaluation Report shall be sent to such address and person as Symantec provides via the notice provisions of this Agreement, which may change from time to time.

4. Restrictions Applicable to License Grants.

Symantec will deliver to Brightmail the non-serialized copy of the Licensed Product in an acceptable form. Brightmail is obligated to create a reliable tracking system for tracking and reporting to Symantec the worldwide usage of the Licensed Products by all Authorized Sublicensees and their provision of the Service to the Authorized Users, including those who are Authorized Users receiving the Service from Authorized Sublicensees of Brightmail that are Service Providers and receive a copy of the Licensed Product, and

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including all Evaluations and all distributions of the foregoing through Resellers. Such tracking system may consist of manual tracking of contracts and their reporting requirements, audit rights and other contractual provisions which Brightmail shall enforce. In accordance with the requirements of Exhibit E, Brightmail shall require the same reporting requirements set forth in this Agreement in its agreements with the Authorized Sublicensees and Resellers, and obtain reports from the Authorized Sublicensees and Resellers meeting the requirements of the terms of this Agreement and provide reports setting forth such information received from the Authorized Sublicensees and Resellers to Symantec.

Brightmail agrees that it will contractually bind the Authorized Sublicensees to (i) de-install the Licensed Product when: (a) the Authorized Sublicensee discontinues the Service using the Licensed Product, and/or (b) the related BMI Service agreement between Brightmail and the Authorized Sublicensee concerning the BMI Service is terminated for any reason whatsoever, and/or (c) this Agreement terminates and (ii) comply with the terms and conditions of this Agreement surrounding the use of the Licensed Product, including but not limited to, those provisions concerning the protection of Symantec’s proprietary rights in the Licensed Products, but not including terms concerning the pricing and license fees to be paid to Brightmail, which is set solely by Brightmail. Brightmail will enforce as to Authorized Sublicensees and Resellers, on Symantec’s behalf as a third party beneficiary, (i) the contractual provisions of this Agreement that indicate that Licensee must require contractual compliance of the Authorized Sublicensees and Reseller with certain terms of this Agreement and elsewhere in this Agreement which generally concern either the use of the Licensed Product, the protection of Symantec’s proprietary rights in the Licensed Product and such other intellectual property of Symantec, such as trademarks, but not concerning the terms concerning pricing charged by Brightmail, which is set solely by Brightmail, and (ii) those in the agreement Brightmail enters into with the Authorized Sublicensees and Resellers concerning the use of the Licensed Products to provide Services to its Authorized Users and of the use of the Licensed Product, which are the license grant language and all protective provisions which relate to the proprietary rights of the Licensed Product.

If Brightmail elects to distribute the Licensed Product via electronic download or physical media, or under such other arrangements as allowed herein where Brightmail gives access to the Licensed Product to an Authorized Sublicensee or the Licensed Product otherwise leaves the sole control of Brightmail, Brightmail must provide a secure infrastructure for the process and for the protection of Symantec’s intellectual property rights in the Licensed Product that meets the requirements listed herein, which requirements may be modified, from time to time by Symantec upon written notice to Brightmail, as well as any further guidelines that Symantec may provide to Brightmail from time to time. If at any time during the Term of this Agreement, Symantec determines Brightmail’s security policies are not sufficient to comply with the standards that Symantec requires or otherwise determines they are inadequate to protect Symantec’s intellectual property rights in the Licensed Products, Symantec will have the right to terminate Brightmail’s ability to distribute the Licensed Product in that manner. Brightmail agrees to comply with the following security guidelines, as modified and added to, from time to time:

1) All servers hosting the Licensed Products for download must be secure from both internal and external exploits and/or hackers and the servers must meet the requirements set forth in Exhibit C, which Symantec can change from time to time in its sole discretion, and which Symantec shall provide Brightmail notice of such changes pursuant to the notice provisions of this Agreement. Brightmail must contractually require Authorized Sublicensees and Resellers contractually, and enforce the same on Symantec’s behalf, to meet the foregoing requirements if they host the Licensed Product for download. Symantec agrees that Brightmail shall not be required to expend more than Ten Thousand Dollars ($10,000) annually to comply with the audit requirements set forth in Exhibit C.

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2) Brightmail must ensure each Authorized Sublicensee is actually under a contractual arrangement with Brightmail and that the access to the download of the BMI Product is protected by such other technology and other measures designed to prevent unauthorized downloads and copying of the Licensed Products.

3) When providing the Licensed Products to an Authorized Sublicensee via physical media, Brightmail must contractually require the Authorized Sublicensee receiving the physical media read and fully understand the applicable licensing usage terms. Brightmail is responsible for contractually requiring that Authorized Sublicensees and Resellers to not abuse Symantec’s licensing terms when receiving and using the Licensed Products in any form, which includes but is not limited to, unauthorized copying and/or distribution and enforce the foregoing on Symantec’s behalf. Brightmail has no authorization to duplicate its own CD-roms containing only the Licensed Product.

Brightmail is not allowed to transfer or otherwise sublicense the Licensed Product(s) to any Enterprise or third party, including but not limited to, any non ISP or non ASP entity that procure the Licensed Product for use in conjunction with the entities’ internal needs, other than as specifically provided for in this section of this Agreement. This Agreement specifically prohibits Brightmail from authorizing or to knowingly allowing any Authorized Sublicensee to utilize the Licensed Product(s) to provide Services as a Service Provider, except as specifically provided for in this Section III of the Agreement. All such licenses and authorizations provided by Brightmail under the terms of this Agreement must be obtained pursuant to a direct, written end user license agreement between Brightmail and the Authorized Sublicensee and/or a direct, written and fully executed agreement with the Authorized Sublicensee and/or Reseller, authorizing such use of the Licensed Product(s) as a Service Provider or End User or otherwise and requiring full compliance with the applicable terms of this Agreement, including but not limited to, those protecting Symantec’s intellectual property rights and meeting all the requirements set forth in Section III. Brightmail must promptly notify Symantec of the name of each Authorized Sublicensee, Enterprise and each Reseller in its reporting that is granted a license and also promptly notifies Symantec of any improper use of the Licensed Product(s) by any Authorized Sublicensee, Enterprise or Reseller.

XIV. PRICES, PAYMENTS, AUDIT AND ORDER PROCEDURE

1. Tax Issues and Other Fees for Licensed Product(s) as Service Provider. The prices for the Licensed Products, and, therefore Payments, do not include any state or federal (U.S. or foreign government) taxes or fees. Brightmail is responsible for any and all such Payments due to Symantec and any and all taxes and fees imposed upon Brightmail. Except for Symantec’s income taxes, Brightmail agrees to pay any and all sales, use, value added, withholding, excise and similar taxes on Payments under this Agreement (the “Taxes”). Symantec will be responsible for its own income tax and fee obligations. If Brightmail claims an exemption from Taxes, Brightmail will provide to Symantec an acceptable copy of all documentation showing the legal exemption from such Taxes. If a foreign government requires Brightmail to withhold Taxes on Payments to Symantec, then Brightmail must: 1) provide Symantec with official receipts for reflecting the actual amount of Taxes withheld, which are adequate to meet the needs of Symantec, in order for Symantec to receive credit for such Taxes paid; and 2) minimize withholdings to the extent possible. The minimization requirement is to protect Symantec’s exposure to the limitation imposed by the Irish Commissioners of Revenue for such credit.

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2. Payment Terms.

a. By Brightmail as a Licensee and Service Provider. All Payments for Licensed Products are non-refundable and due regardless of Brightmail’s ability to collect from its Authorized Sublicensees and Resellers. Brightmail will receive an invoice for all Payments related to the Licensed Product(s). Payments are due when specified in Exhibit A regardless of receipt of invoice. If any Payment is not received within net thirty (30) calendar days after the end of each calendar quarter or in accordance with the terms of the Minimum Commitment Payment, by the specified Payment date in Exhibit A, Symantec may impose interest and late charges of one and one half percent (1-1/2%) per month until all Payments are current. Brightmail may charge its Authorized Sublicensees such license fees as it so determines for the BMI Services incorporating the Licensed Products. Brightmail must pay all Payments which represent license fees for the Licensed Products net thirty (30) days from the last Friday of the calendar quarter in arrears for BMI Services provided to the Authorized Sublicensees which are Existing Business, which timing does not apply to Minimum Commitments. The Payment and terms for the Bulk License, Minimum Commitment Payments and Existing Business are set forth in Exhibit A.

b. Currency and Place of Payment. +

3. Audit and Records.

Brightmail will maintain its records relating to the provision of BMI Services with the Licensed Products as a Service Provider for at least three (3) years after their creation. Brightmail agrees to permit an independent third party (“Auditor”), to be mutually agreed upon by both parties, to examine such records upon reasonable notice, but not more often than once every twelve (12) months, during all normal business hours during the Term of this Agreement and for twelve (12) months after expiration or any termination of this Agreement. Symantec (or an independent third party representative), upon reasonable written notice of no less than ten (10) calendar days, will have the right to conduct an audit of Brightmail’s books of account, records, contracts or other information which relate to this Agreement and the Licensed Products, in order to verify compliance with this Agreement. Brightmail will immediately pay any overdue Payments revealed by such audit(s). Symantec will bear the costs of the audit; provided, however, if the audit reveals overdue Payments in excess of five percent (5%) of the Payments owed for any six (6) month period, Brightmail will pay the costs of such audits(s). All information obtained by Symantec (or its independent third party representative) during any such audit will be confidential and Symantec (and its independent third party representatives) will keep it confidential, except to the extent it is reasonably necessary to disclose such information to enforce this Agreement or as otherwise required by law.

(+) Denotes text that was intentionally made illegible in the original agreement.

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XV. NOTIFICATIONS AND REPORTING

1. Notification. Brightmail will notify Symantec in writing of any claim or proceeding involving Licensed Product(s) and/or the BMI Service within ten (10) days after Brightmail learns of such claim or proceeding. Brightmail will report promptly to Symantec all claimed or suspected product defects in the Licensed Product. Brightmail will also notify Symantec in writing not more than thirty (30) days after any change in control of Brightmail or any transfer of more than twenty-five percent (25%) of Brightmail’s voting control or a transfer of substantially all its assets.

2. Reporting. At the end of every calendar quarter, Brightmail agrees to provide Symantec with a preliminary quarterly report in the same format as the Regional Report, as detailed below, for the estimated total number of Authorized Users as totaled on the last Friday of the calendar quarter under (i) New Business, with a break out of the subtotal for the Converted Business and Evaluations, and (ii) Existing Business with a break out for the subtotal for Enterprises. In addition, Brightmail agrees to furnish Symantec with a final total quarterly “sell through” report in an electronic format but in Excel only, meeting all the content and format requirements set forth in Exhibit E, attached hereto and incorporated by reference: (i) by Authorized Sublicensee, showing the names of each Authorized Sublicensee, and if through a Reseller, categorized by Reseller with the name and address of each Reseller, and the number of Authorized Users for each Authorized Sublicensee; (ii) reporting each geographic country and by region which consists of the (a) Americas for Symantec Corporation, and (b) AsiaPac/EMEA for Symantec Limited; (iii) the total number of Authorized Users as totaled on the last Friday of the calendar quarter shall also be set forth under (a) New Business, with a break out of the subtotal for the Converted Business and Evaluations, and (b) Existing Business per Authorized Sublicensee and with a break out for the subtotal of Enterprises per Enterprise; and (iv) the total of Internal Users (the “Regional Report”). The final Regional Report is due no later than thirty (30) calendar days from the end of the last Friday of the previous calendar quarter. While Brightmail shall require Authorized Sublicensees and Resellers to comply with the Regional Report requirements in all New Business and all extensions or renewals of Existing Businesses, Brightmail shall use reasonable commercial efforts to obtain the by country reporting for the Regional Report for all Existing Business.

XVI. SUPPORT

Brightmail shall provide all support to the (i) Authorized Sublicensees and require the Authorized Sublicensees to provide support to their own Authorized Users (including Evaluations), and (ii) Internal Users for Licensed Products and under no condition shall Symantec take any calls from any of the foregoing. Symantec will refer the Authorized Users back to the Authorized Sublicensee and refer the Authorized Sublicensees to Brightmail for support at (1-800-453-2577). Symantec shall provide separate support to Brightmail pursuant to a separate agreement.

XVII. NON-DISCLOSURE

1. Agreement.

Both Parties covenants and agrees not to disclose the terms of this Agreement or any other details as to its relationship with the other to any third party without Symantec’s prior written consent.

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2. Confidential Information.

a. The Parties acknowledge that in the course of performing their obligations hereunder each may receive information (“Information”), which is confidential and proprietary to the other. Such Information includes non-public information or materials, including without limitation written or printed documents and computer disks or tapes, whether machine or user readable containing such information, that: (i) relates to released or unreleased Symantec software products or processes, including updates, patches, bug fixes or other modifications; the marketing or promotion of any Licensed Product or Symantec product or BMI Product; and either Party’s business policies or practices, (ii) is disclosed by one Party to the other in tangible or written form and clearly marked “Confidential” (or with a similar proprietary legend), or is of a nature that a reasonable business person would know or suspect it is of a confidential nature or (iii) is disclosed by one Party to the other in confidence in connection with this Agreement and the Parties’ performance hereunder.

b. Information does not include information or materials that the receiving Party can demonstrate (i) is on the date hereof, or hereafter becomes, through no act or failure to act or violation of this Agreement on the part of the receiving Party, generally known or available to the public, (ii) was known or possessed by the receiving Party before its receipt from the disclosing Party, (iii) is hereafter rightfully obtained by the receiving Party from a third party, without breach of any obligation to the disclosing Party, or (iv) is independently developed by the receiving Party, without use of or reference to the Information, by persons who had no access to the Information.

c. Each Party covenants and agrees that neither it nor its agents, employees, officers, directors or representatives will (i) use any of the Information except in performance of this Agreement or (ii) disclose any Information to third parties other than Authorized Sublicensees and/or Resellers, as necessary to sublicense the Licensed Product from the Effective Date of this Agreement and during the Term and for a period of five (5) years from the termination of this Agreement, whether terminated by Symantec or by Brightmail, unless required to be disclosed by law or a judicial authority. Each Party further covenants and agrees to protect the Information obtained from the other with the same degree of care as it uses to protect its own confidential information of like importance, but in no event less than reasonable care. The receiving Party may disclose Information only to its employees and contractors having a “need-to-know” for the purposes of this Agreement. The receiving Party will notify and inform those employees and contractors of the receiving Party’s obligations regarding use of Information and will obtain or have obtained from its employees and contractors agreements requiring them to comply with these obligations. Each Party will provide notice to the other Party immediately after learning of or having reason to suspect a breach of any of the confidentiality obligations set forth in this Agreement.

XVIII. TERM OF AGREEMENT

This Term of this Agreement shall commence on the Effective Date and shall continue for a period of three (3) years (the “Term”). This Agreement shall automatically expire at the end of the Term and nothing contained herein shall be interpreted as requiring either Party to renew or extend this Agreement, and neither Party expects this Agreement to be renewed; provided, however, that this Agreement may be terminated prior to the expiration of its stated Term as set forth below. This Agreement may be extended by an amendment extending the Term and updating the Price, which is signed by the authorized signatory of each Party. There are limited Run Off Periods provided for in this Agreement and therefore, Brightmail is advised to negotiate its renewal and extension of the Term, pursuant to an amendment, in sufficient advance of its needs for its Authorized Sublicensees. The license grants in Section III(2)(v) & (vi) are for one (1) year from the

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Amended Date, and shall automatically renew unless cancelled by Licensee, which can only be done by providing Symantec a written notice of non-renewal which must be received no later than March 26, 2004; and thereafter, on an annual basis, Brightmail may provide a notice of non-renewal to Symantec no later than by the last Friday of the calendar quarter.

XIX. TERMS AND CONDITIONS

1. Restrictions on Use.

a. Allowed Business Use of the Licensed Products. Brightmail covenants and agrees to use the Licensed Product only with BMI Products as part of the BMI Services as provided to Authorized Sublicensee for making the Service available to Authorized Users in accordance with the terms of the Agreement. Brightmail shall not permit any person or party other than Authorized Sublicensees to use the Licensed Product; provided, however, that Brightmail may use the Licensed Product internally for testing purposes and to provide support to Authorized Sublicensees.

b. Modifications, Reverse Engineering. Brightmail covenants and agrees that only Symantec shall have the right to alter, maintain, enhance or otherwise modify the Licensed Products, and all of the related Documentation, except as specifically provided for in this Agreement. Brightmail shall not disassemble, decompile, decrypt, reverse engineer, or create derivative works based upon, or make any attempt to discover the source code of, the Licensed Product or any portion thereof. Brightmail shall not adapt, modify, translate, distribute, duplicate, copy, transfer possession of, loan, lease, or resell for profit the Licensed Product except as specifically provided for in this Agreement. Brightmail shall immediately report to Symantec and halt unauthorized copying, use, distribution, installation, or transfer of possession of the Licensed Product, by any person or entity of which Brightmail has knowledge. Prior to disposing of any media or apparatus containing the Licensed Product or any part thereof, Brightmail will ensure that any Licensed Product contained on such media or stored in such apparatus has been completely erased or otherwise destroyed.

c. Protection of Information. Brightmail acknowledges that the Licensed Product and all related Documentation are proprietary to Symantec and comprise (i) works of original authorship, including compiled information containing Symantec’s selection, arrangement, and co-ordination and expression of such information or pre-existing material it has created, gathered or assembled, (ii) confidential trade secret information, and (iii) information that has been created, developed and maintained by Symantec at great expense of time and money such that misappropriation or unauthorized use by others would unfairly and irreparably harm Symantec. In addition to Brightmail’s obligations outlined in Section VII, Brightmail shall not commit or permit any act or omission that would impair Symantec’s proprietary and intellectual property rights in the Licensed Products, and all of the Documentation.

d. Trademarks, Trade Names and Copyrights.

(i) Trademark Use and Co-branding Guidelines. At all times in every advertisement, promotion and branding of the BMI Service, Brightmail will do the following and contractually require the Authorized Sublicensee to do the same in regards to the Service, and enforce the same on Symantec’s behalf, to do the following: (i) use either or both: (a) the trademark “Powered by Symantec” including any related logos, or (b) the Symantec logos and trademarks associated with the Licensed Products; and (ii) ensure that all statements (written or oral) concerning the Licensed Product shall be strictly in accordance with the Documentation or otherwise be approved by Symantec in writing prior to distribution in any form.

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CONFIDENTIAL TREATMENT REQUESTED

Brightmail’s use, (and Brightmail shall contractually require and enforce the same with the Authorized Sublicensee’s use) the of such trademarks and logos will be in accordance with Symantec’s trademark policies and usage guidelines in effect from time to time. Brightmail is obligated to comply with the following and to contractually require its Authorized Sublicensees to do the following, and shall name Symantec as a third party beneficiary of these contractual requirements and enforce the following provisions on behalf of Symantec: (i) Any co-branding of products, marketing materials or other communications that refer to the functionality or the existence of the Licensed Product shall state “Powered by Symantec” and be subject to the co-branding guidelines that Symantec provides to Brightmail, as modified, from time to time, in Symantec’s sole discretion, as well as Symantec’s general trademark guidelines, attached hereto as Exhibit D, both as modified, from time to time, in Symantec’s sole discretion; provided that any Authorized Sublicensee shall have up to thirty (30) business days after receipt by Brightmail of updated guidelines to update any marketing materials and to cease distributing marketing materials that are no longer in compliance with such new guidelines, (ii) the initial user interface in the version of the Brightmail’s software offering, provided as part of its BMI Service (or Service in reference to an Authorized Sublicensee), must contain the words “Powered by Symantec” and the wording “Powered by Symantec” will be present in the footer of all warning pages or messages concerning notice of virus detection in all versions of Brightmail’s software offering as part of the BMI Service (or Service in reference to an Authorized Sublicensee), and (iii) Authorized Sublicensee shall not make any false representations as to the relationship of Symantec to the Authorized Sublicensee, concerning the Licensed Product, or concerning the source of the Services offered by the Authorized Sublicensee. Further, if any Authorized Sublicensee has any concerns about compliance, Brightmail should inform them that they may contact Symantec’s Legal Department directly to obtain review and approval. Notwithstanding the foregoing, Brightmail and its Authorized Sublicensees may do general marketing using common industry descriptive words that indicate the existence of virus detection, but which are general references to the Service and/or BMI Service and do not mention or otherwise reference the components, features or technical aspects of the Licensed Products, such as, but not limited to, “Internet services with virus detection”, “e-mail virus scanning”, “e-mail virus filter services” and/or “e-mail protection and such others as fall within the foregoing requirements, without including the Symantec logos and trademarks, as required above. Brightmail agrees and acknowledges that no description of any BMI Service provided or offered by Brightmail or Service by its Authorized Sublicensees shall in any sense mislead the consumer into believing that the Licensed Product portion of such BMI Service and/or Service is created or owned by any party other than Symantec and that Symantec shall make the final determination of such on any such issues, in its sole discretion. Brightmail shall contractually require its Authorized Sublicensees to comply with all of the foregoing obligations and name Symantec as a third party beneficiary of the contracts it enters into with Authorized Sublicensee. Symantec shall solely control all litigation matters and related decisions, and be responsible for such costs, in regards to the subject matter of this provision.

(ii) No Rights in Trademarks or Copyrights. Brightmail has paid no consideration for the use of Symantec’s trademarks, logos, copyrights, trade names or designations, and nothing contained in this Agreement will give Brightmail any interest in any of the foregoing. Brightmail acknowledges that Symantec owns and retains all copyrights and other proprietary rights in all Licensed Products and documentation including patent, copyright, trade secret, trademark and other proprietary rights, in and to the Licensed Products and the Documentation and any corrections, bug fixes, enhancements, updates or other modifications, including custom modifications, to the Licensed Products, whether made by Symantec or any third party, and Brightmail shall have no right, title or interest in such proprietary rights. Brightmail agrees that it will not at any time during or after this Agreement assert or claim any interest in or do anything that may adversely affect the validity or enforceability of any trademark, trade name, copyright or logo belonging to or licensed to Symantec (including, without limitation, any act, or assistance to any act, which may infringe

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CONFIDENTIAL TREATMENT REQUESTED

or lead to the infringement of any copyright in the Licensed Products). Brightmail agrees not to attach any additional trademarks, logos or trade designations to Licensed Product or BMI Products which violate any terms of this Agreement. Brightmail further agrees not to affix any Symantec trademark, logo or trade name to any non-Symantec product and/or non-Symantec service, except as provided for in this Agreement. Brightmail shall contractually require the Authorized Sublicensees to comply with the foregoing requirements, and enforce the same on Symantec’s behalf.

(ii) Obligation to Protect. Brightmail agrees to use reasonable efforts to protect Symantec’s proprietary rights and to cooperate without charge in Symantec’s efforts to protect its proprietary rights. Brightmail agrees to notify Symantec of any known or suspected breach of Symantec’s proprietary rights that comes to Brightmail’s attention.

(iii) Transfers. Except as specifically provided for under the terms of this Agreement, under no circumstances shall Brightmail sell, license, publish, distribute, or otherwise transfer to a third party the Licensed Product or the Documentation or any copy thereof, in whole or in part, without Symantec’s prior written consent.

e. Obligation to Use Most Current Version of Licensed Product. Brightmail acknowledges that Symantec may, from time to time, release updated versions of the Licensed Product. Brightmail covenants and agrees, within thirty (30) days after written notification by Symantec of the release of any such updated version for the operating platform(s) utilized by Brightmail, to upgrade to, and use exclusively, the updated version of the Licensed Product in its BMI Product to provide the BMI Service and provide the updated BMI Product to the Resellers. Brightmail will use commercially reasonable efforts to notify and request its Authorized Sublicensees to use the latest version of the Licensed Product as it is incorporated into the BMI Product. Brightmail acknowledges that it understands that support services are only available to customers of Symantec who have purchased support and are on a particular version of the Licensed Product for a time period of one (1) full year after the date of the next “Major Release” which is defined as any new version of the Licensed Product that contains features or capabilities that are different from the current version (typically denoted with a new version number in front of the decimal point such as 5.0, 6.0, 7.0, or a year number such as 2001, 2002, 2003 but it could be designated otherwise) as opposed to an in-line update or modification or patch that is designed only to improve the current version of the Licensed Product, and that Symantec licenses to its licensees and customers generally for a fee as opposed to the free update, modification or patch. Brightmail agrees that the support services will end one (1) year after the next Major Release of the Licensed Product and thereafter in order to obtain support services, Brightmail must upgrade to the most current version of the Licensed Product, (i.e. the Major Release) as outlined above.

f. Obligation to Update. If the Licensed Product requires updates such as new virus definitions, new content filtering lists or new rules of any type, Brightmail and Authorized Sublicensee shall update its copies of the Licensed Product used to provide the BMI Service and/or Service, respectively, at least once daily.

2. Disclaimer of Warranties; Limitation of Liability and Related Matters.

a. Special Warranty and General Disclaimer of Warranties. SYMANTEC WARRANTS THAT THE LICENSED PRODUCT WILL SUBSTANTIALLY COMPLY WITH THE SPECIFICATIONS SET FORTH IN THE CURRENT APPLICABLE DOCUMENTATION PUBLISHED GENERALLY WITH RESPECT THEREOF. IF AT ANY TIME DURING THE TERM OF THIS AGREEMENT, BRIGHTMAIL CAN SHOW A DEFECT IN THE LICENSED PRODUCT SUCH THAT THE LICENSED PRODUCT DOES

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CONFIDENTIAL TREATMENT REQUESTED

NOT SUBSTANTIALLY COMPLY WITH THE DOCUMENTATION, SYMANTEC SHALL WITHIN THE TIME PERIOD AGREED BETWEEN THE PARTIES, OR IF NO TIME PERIOD, WITHIN A REASONABLE TIME, EITHER REMEDY THE DEFECT OR REPLACE THE LICENSED PRODUCT, WHICH CHOICE IS IN SYMANTEC’S SOLE DISCRETION AND WHICH IS THE SOLE REMEDY FOR THIS BREACH OF WARRANTY. IF SYMANTEC HAS PROVIDED IN ADVANCE ANY BETA OR OTHER TEST VERSIONS OF THE LICENSED PRODUCT TO BRIGHTMAIL AND HAS NOT AUTHORIZED BRIGHTMAIL TO RELEASE SUCH AS FINAL LICENSED PRODUCT, THEN THIS WARRANTY IS VOID IF BRIGHTMAIL RELEASES ANY BMI PRODUCT CONTAINING SUCH LICENSED PRODUCT THAT SYMANTEC HAS NOT GENERALLY AND PUBLICLY RELEASED TO ITS OTHER CUSTOMERS. SYMANTEC MAKES NO WARRANTY THAT ALL ERRORS OR FAILURES WILL BE CORRECTED.

b. Limited Liability. EXCEPT AS SET FORTH ABOVE, THE LICENSED PRODUCT AND DOCUMENTATION ARE PROVIDED “AS IS” AND WITHOUT WARRANTY OF ANY KIND. ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED, ARE DISCLAIMED AND EXCLUDED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND INFRINGEMENT. THE ENTIRE RISK AS TO THE QUALITY AND PERFORMANCE OF LICENSED PRODUCT IS WITH BRIGHTMAIL.

c. No Warranty. Brightmail will make no warranty, guarantee or representation, whether written or oral, on Symantec’s behalf.

d. Breach of Warranty. If Symantec is not able to cure any breach of the warranty section set forth in subsection (a) above within the allowed cure period set forth in the termination provisions of this Agreement, then Brightmail may terminate this Agreement.

3. Limitation of Liability.

NEITHER PARTY SHALL BE LIABLE TO THE OTHER OR ANY OTHER PERSON OR ENTITY FOR INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES OR THE LOSS OF ANTICIPATED PROFITS ARISING FROM ANY PERFORMANCE UNDER, OR BREACH OF, THIS AGREEMENT EVEN IF NOTICE IS GIVEN OF THE POSSIBILITY OF SUCH DAMAGES. IN ADDITION, THE LIABILITY OF SYMANTEC FOR ANY DAMAGES RELATING TO ANY LICENSED PRODUCT SHALL BE LIMITED AS SET FORTH HEREIN. SYMANTEC’S LIABILITY HEREUNDER OTHER THAN RELATING TO AMOUNTS DUE UNDER THE INDEMNITY PROVISIONS SET FORTH IN SECTION 5A, SHALL BE LIMITED TO THE TOTAL PAYMENTS RECEIVED FROM BRIGHTMAIL PURSUANT TO THIS AGREEMENT DURING THE TWELVE (12) MONTHS PRIOR TO THE EVENT GIVING RISE TO SUCH LIABILITY. IN ADDITION, THE TOTAL LIABILITY OF BRIGHTMAIL FOR ANY DAMAGES DUE UNDER THIS AGREEMENT, BUT NOT INCLUDING RELATING TO ANY PAYMENT OBLIGATIONS OR PROVISIONS, AMOUNTS DUE UNDER THE INDEMNITY PROVISIONS SET FORTH IN SECTIONS 5A AND 5 B BELOW, AND DAMAGES FOR ANY BREACH OF THE GRANT OF LICENSES PROVISIONS SET FORTH IN SECTION III, SHALL BE LIMITED TO THE TOTAL OF SEVEN MILLION DOLLARS.

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CONFIDENTIAL TREATMENT REQUESTED

4. Compliance with Law.

Brightmail covenants and agrees to comply with all applicable international, national, state, regional and local laws and regulations in its performance hereunder and in any of its dealings with its Resellers, Authorized Sublicensees and Authorized Users with respect to the BMI Service. Symantec covenants and agrees to comply with all applicable international, national, state, regional and local laws and regulations in its performance hereunder and in any of its dealings with Brightmail.

5. Indemnification.

(A) Indemnification by Symantec. Notwithstanding anything contained herein to the contrary, Symantec hereby indemnifies, defends, and holds Brightmail and its officers, employees, board members, and contractors harmless from and against any and all third party claims, actions, or demands alleging that the Licensed Product and/or any update provided by Symantec infringes any patent, copyright, trademark, trade secret or other intellectual property right of any third party. Subject to Symantec receiving prompt written notice from Brightmail of any actual or threatened claim, and further subject to Brightmail providing Symantec with complete control of the settlement and defense thereof, Symantec shall pay resulting costs, damage awards, legal fees finally awarded, and any settlement amounts in such actions which are attributable to such claims. Symantec shall have no liability to Brightmail for any claim to the extent based upon modification of the Licensed Product by Brightmail or combination of the Licensed Product with the Brightmail’s own software solution or any other software or hardware not provided by Symantec, approved by Symantec for combination with the Licensed Product, or otherwise identified in the Symantec Documentation as intended for combination with the Licensed Product (if the claim would not survive but for the modification or combination). In addition, should the Licensed Product become, or is likely to become, in Symantec’s reasonable opinion, exercising sound commercial judgment, the subject of a claim of intellectual property infringement then Brightmail shall permit Symantec to replace or modify the Licensed Product so as to avoid infringement, or to procure the right for Brightmail to continue use of such items. If neither of such alternatives is reasonably possible, the infringing items shall be returned to Symantec and Symantec shall refund to Brightmail all amounts paid by Brightmail in excess of actual usage.

(B) Indemnification by Brightmail. Notwithstanding anything contained herein to the contrary, Brightmail hereby indemnifies, defends, and holds Symantec and its officers, employees, board members, and contractors harmless from and against any and all third party claims, actions, or demands arising out of this Agreement that: (i) allege that the BMI Service infringes any patent, copyright, trademark, trade secret or other intellectual property right of any third party, however excluding any and all claims based on the Licensed Product (but including claims to the extent based upon Brightmail’s modification or unapproved combination of the Licensed Product with third party products, solely to the extent such claim would not survive but for the modification or combination); or (ii) to the extent that they are due to any unauthorized warranty made by Brightmail or any Authorized Sublicensee regarding the Licensed Product. Subject to Brightmail receiving prompt written notice from Symantec of any actual or threatened claim, and further subject to Symantec providing Brightmail with complete control of the settlement and defense thereof, Brightmail shall pay resulting costs, damage awards, legal fees finally awarded, and any settlement amounts in such actions which are attributable to such claims.

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CONFIDENTIAL TREATMENT REQUESTED

6. Termination.

a. For Cause Termination. Either Party may terminate this Agreement at any time in the event that the other Party fails to perform any obligation, warranty, duty or responsibility or is in default with respect to any term or condition under this Agreement and such failure or default continues unremedied for a period of thirty (30) days (fifteen (15)) days in case of failure to make Payment) after notice of failure or default from the other Party (a “For Cause Termination”) which termination shall be effective immediately after the time period to cure the default as set forth in this section has expired if the nonbreaching party has affirmatively elected to terminate the Agreement. If the resolution of the breach requires more than thirty (30) days, the breaching Party may request the other Party for additional time to remedy the breach, and both Parties agree to discuss such an extension in good faith.

b. Automatic Termination. This Agreement terminates automatically, with no further act or action of either Party, if a receiver is appointed for either Party or over either Party’s property, either Party makes an assignment for the benefit of its creditors, any proceedings are commenced by, for or against either Party under any bankruptcy, insolvency or debtor’s relief law, or either Party is liquidated or dissolved. Notwithstanding the foregoing, if Brightmail is reorganizing its entity under the bankruptcy laws and is not in breach of this Agreement, the Agreement shall not automatically terminate. If Brightmail has any change in the management or control of, or any transfer of more than twenty-five percent (25%) of Brightmail’s voting control or a transfer of substantially all its assets to a competitor of Symantec, which Symantec determines in it sole discretion is a competitor, then this Agreement shall automatically terminate on the date of a notice by Symantec of such decision as provided in writing by Symantec to Brightmail. The foregoing shall be referred to hereafter as “Automatic Termination”.

c. Disruption to Symantec’s Small Business Revenue. Symantec may terminate the Agreement, but not sooner than six (6) months from the Effective Date, if Symantec determines in its sole discretion, that Brightmail has entered into any agreement that disrupts Symantec’s anti virus small business revenue.

d. Effect of Termination.

(i) Effect on Payments and Licenses. Upon any termination of any kind and any expiration of the Term, no refunds of Payments due and/or Minimum Commitment Payments will be made to Brightmail. Further, the license granted under this Agreement to use the Licensed Product and the Documentation is immediately revoked other than subject to any applicable Run Off Periods.

(ii) Obligations of Brightmail as to Licensed Products. Brightmail, within ten (10) days, shall, at Symantec’s option, either destroy all licensed copies of the Licensed Product and Documentation, and all backups, or return them to Symantec, and certify in writing by an authorized officer of Brightmail that all copies have been destroyed and/or returned. In each instance where Brightmail has distributed the Licensed Product and/or Documentation to Authorized Sublicensees and Resellers, then Brightmail shall contractually require and enforce the requirement that the Authorized Sublicensees and Resellers destroy the Licensed Product and Documentation, and all backups, or return them to Brightmail, and certify in writing by an authorized officer of Brightmail that all copies have been destroyed and/or returned and/or that Brightmail has by way of its technology effectively prevented all further use of the Licensed Product. This obligation shall survive the termination of this Agreement.

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CONFIDENTIAL TREATMENT REQUESTED

(iii) Outstanding Invoices. The due dates of all outstanding invoices to Brightmail for Licensed Product(s) automatically will be accelerated if the termination is based on a For Cause Termination caused by Brightmail or an Automatic Termination triggered by conduct of Brightmail, so they become due and payable by immediate wire transfer on the effective date of termination or expiration, even if longer terms had been provided previously, except in the case that Symantec terminates for any disruption to its small business revenue pursuant to the terms set forth under Section X.6.c.

(iv) Cease Use of Marks and Run Off Period. Brightmail will forthwith cease, and cause each of its Authorized Sublicensees and Resellers to also cease, all use of all Symantec trademarks, and will not thereafter use any mark which is confusingly similar to any trademark associated with any Licensed Product(s) with the BMI Products or BMI Service or any other products or services and contractually require the Authorized Sublicensees to do the same and also with regard to its Service and enforce the same on Symantec’s behalf. Notwithstanding the foregoing, if the Term of this Agreement expires and is not renewed, or there is any termination other than (i) an Automatic Termination for bankruptcy only or (ii) a For Cause Termination caused by Brightmail, then and only then, pursuant to the provisions set forth in this Section, Brightmail may continue for up to three (3) months after termination of this Agreement to sublicense the Licensed Product under existing agreements with Authorized Sublicensees and conditioned on the continuation of Brightmail making any Payments due to Symantec for such period of additional time, per the terms of this Agreement (the “Run Off Period”). The foregoing Run Off Period applies only if Symantec is able to deliver a functional Licensed Product and related virus definitions which shall mean for purposes of this Agreement, that the Licensed Product and the delivery of virus definitions meet the special warranty provisions set forth in this Agreement. So provided that a functional Licensed Product and virus definitions are available and Payments are current, and that no other breaches of the Agreement exist, Symantec agrees that the Run Off Period is automatically extended for another three (3) months unless Brightmail indicates it no longer needs the Run Off Period. Thereafter, given the same conditions are met again, in that a functional Licensed Product and virus definitions are available, Payments are current, and no other breach of the Agreement exists, then Symantec agrees that the Run Off Period automatically renews for yet another three (3) months, providing no more than a total of nine (9) months of Run Off Period unless Brightmail indicates it no longer needs the Run Off Period. Brightmail agrees that support is only available in any Run Off Period to Brightmail if Symantec is then supporting the Licensed Product and Brightmail is current on its support payments, if any. Brightmail agrees that the Payment obligations continue to apply to all Run Off Periods. Upon the termination of this Agreement, the Licensed Product will be promptly destroyed by Brightmail, if so approved in writing by Symantec and Brightmail will then will certify to Symantec in writing the destruction of such Licensed Product in accordance with the terms and conditions set forth in writing pursuant to which Symantec so approved such destruction. If Symantec does not approve destruction, Brightmail must return the Licensed Product at its own expense.

e. Limitation of Liability for Termination. Symantec shall not be liable to Brightmail on account of termination or expiration of this Agreement for reimbursement or damages for loss of goodwill, prospective profits or anticipated orders, or on account of any expenditures, investments, leases or commitments made by Brightmail based upon or growing out of such termination or expiration. Brightmail acknowledges and agrees that; (i) Brightmail has no expectation and has received no assurances that its business relationship with Symantec will continue beyond the stated Term of this Agreement or its earlier termination in accordance with this clause other than for any applicable Run Off Periods, that any investment by Brightmail in the promotion of the BMI Service, BMI Products or the Licensed Products will be recovered or recouped, or that Brightmail shall obtain any anticipated amount of profits by virtue of this Agreement; and (ii) Brightmail shall not have or acquire by virtue of this Agreement or otherwise any vested, proprietary or

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other right in the promotion of the BMI Service or in any goodwill created by its efforts hereunder. The Parties acknowledge that this clause has been included as a material inducement for Symantec to enter into this Agreement and that Symantec would not have entered into this Agreement but for the limitations of liability as set forth herein.

7. Survival of Warranties and Covenants.

The warranties, covenants and agreements contained in this Agreement, which by their nature should survive the termination of this Agreement, shall survive the termination of this Agreement and remain in full force and effect.

8. Relationship of the Parties.

Brightmail is a customer of Symantec, and will not have, and will not represent that it has, any power, right or authority to bind Symantec, or to assume or create any obligation or responsibility express or implied, on behalf of Symantec or in Symantec’s name. Nothing stated in this Agreement shall be construed as making partners of Brightmail and Symantec, or as creating the relationships of employer/employee, franchisor/franchisee, or principal/agent between the Parties. In all matters relating to this Agreement, neither Brightmail nor its employees or agents or Resellers are, or shall act as, employees of Symantec within the meaning or application of any obligations or liabilities to Symantec by reason of an employment relationship. Brightmail shall make no warranty, guarantee or representation, whether written or oral, on Symantec’s behalf, about the Licensed Product, the BMI Service, BMI Product or otherwise. Brightmail shall require, and enforce on Symantec’s behalf, that the agreements it has with the Authorized Sublicensee and/or Authorized Users and the agreements that the Authorized Sublicensees have with the Authorized Users, pursuant to which they receive the Service, contain commercially standard provisions for disclaiming warranties and limiting liability, which protect Brightmail’s licensors, including Symantec.

9. General.

a. Complete Agreement; Amendment. Each Party acknowledges that it has read this Agreement and all exhibits, understands them, and agrees to be bound by their terms, and further agrees that they are the complete and exclusive statement of the agreement and understanding of the subject matter of this Agreement between the Parties which supersedes all prior proposals, understandings, and all other agreements, oral and written, including the Prior Agreement, between the Parties relating to the subject matter of this Agreement. This Agreement and all exhibits hereto may not be modified or altered except by written instrument duly executed by the authorized signatories of both Parties.

b. Order Forms. In the event of any conflict between the terms and conditions of this Agreement and the terms and conditions of any order form, the terms and conditions of this Agreement and all exhibits shall control.

c. Governing Law; Consent to Jurisdiction; Costs. This Agreement and performance under this Agreement shall be governed by California law, without regard to its conflict of laws provisions and principles, regardless of the domicile of any Party. Brightmail hereby submits to the jurisdiction of the Courts in Santa Clara County, California and agrees that these shall be the sole fora to resolve all disputes under this Agreement. Brightmail agrees to pay all costs associated with the collection of any sums due under this Agreement, including attorney’s fees. Brightmail agrees that any export or re-export of Licensed Product shall be done in accordance with the United States Export Administration Regulations, and hereby takes full

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CONFIDENTIAL TREATMENT REQUESTED

responsibility therefore and agrees to indemnify Symantec for any violations by Brightmail thereof in accordance with such terms set forth in this Agreement. Diversion contrary to U.S. Law is prohibited. The Licensed Product is prohibited for export or re-export to Cuba, North Korea, Iran, Iraq, Libya, Syria and Sudan or to any person or entity on the U.S. Department of Commerce Denied Persons List or on the U.S. Department of Treasury’s lists of Specially Designated Nationals, Specially Designated Narcotics Traffickers or Specially Designated Terrorists.

d. Severability. If any provision of, or clause within, this Agreement is deemed invalid by a court of competent jurisdiction, it is to that extent to be deemed omitted, unless the court can modify said provision or clause to make it valid and enforceable, in which case the provision or clause shall be so modified. The remainder of the Agreement shall be valid and enforceable to the maximum extent possible.

e. Assignment. Brightmail may not assign or sublicense, without the prior written consent of an authorized officer of Symantec, its rights, duties, or obligations under this Agreement to any person or entity, in whole or in part, and any such assignment or sublicense shall be void.

f. Waiver. The waiver or failure of Symantec to exercise in any respect any right provided for in this Agreement shall not be deemed a waiver of any further right under this Agreement.

g. Headings. The headings appearing at the beginning of the several clauses contained in this Agreement have been inserted for identification and reference purposes only and shall not be used in the construction and interpretation of this Agreement.

h. Notices. Notices shall be sent to the person at the address on the signing page, with a copy to General Counsel, Symantec Corporation, 20330 Stevens Creek Boulevard, Cupertino, CA 95014. All notices shall be written and sent by facsimile, overnight courier or first-class certified mail, and shall be deemed received on the earlier of actual receipt or seven (7) business days after being mailed by first class certified mail or one (1) business day after being dispatched by an internationally recognized express courier service.

i. Authority. Each Party warrants that the person signing below is authorized to bind that Party to this Agreement.

j. Counterparts. This Agreement may be signed in counterparts and delivered by facsimile, each of which will be deemed an original.

k. Symantec Company or Product Acquisitions. Brightmail understands and agrees that during the term of this Agreement, or its renewal, Symantec may acquire rights to additional products. In the event that Symantec acquires any company (or the products of any company) which has in force a reseller or distribution agreement or any other agreement with Brightmail, Brightmail hereby agrees that this Agreement shall automatically, without further action, supersede such other agreement with such other company in regard to such products after the time of Symantec’s acquisition of such company and/or product.

l. Release of Claims. Any and all known claims against Symantec arising under any prior agreements or understandings, whether oral or in writing, between Symantec and Brightmail are waived and released by Reseller by acceptance of this Agreement.

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed on the date set forth below.

Brightmail
Signature:	/s/ Michael Irwin
Print
Name:	Michael Irwin
Title:	Chief Financial Officer
Date:	March 28, 2003
Address:	301 Howard Street, Suite 1800
	San Francisco, CA 94105

Symantec Corporation
Signature:	/s/ Dieter Giesbrecht
Print
Name:	Dieter Giesbrecht
Title:
Date:	March 28, 2003
Address:	20330 Stevens Creek Blvd.
	Cupertino, CA 95014

Symantec Limited
Signature:	/s/ Art Courville
Print Name:	Art Courville
Title:	Sr. VP, General Counsel
Date:	March 28, 2003
Address:	Ballycoolin Industrial Park,
	Blanchardstown, Co. Dublin 15, Ireland

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EXHIBIT “A”

I. PRICES AND LICENSED PRODUCTS:

1. Existing Business:

Licensed Product Price Per Authorized User for Existing Business other than Enterprise (which is per the Enterprise Schedule below).

	Number of Authorized Users	$/Authorized User (i.e. Mailbox/year)
NAV API, Windows
2000 and Solaris	0 - 99,999	+
	100,000-499,999	+
	500,000-999,999	+
	1,000,000-1,999,999	+
	2,000,000-3,999,999	+
	4,000,000-5,999,999	+
	6,000,000+	+

The Price per Authorized User for Existing Business applies cumulatively to each group of Authorized Users (also referred to as “Mailboxes” under the Prior Agreement) per Authorized Sublicensee throughout the entire Term of this Agreement; e.g. if an Authorized Sublicensee account has 600,000 Authorized Users, Brightmail would pay Symantec:

+

+

+

2. Enterprise:

Price per Enterprise Schedule

Number of Mailboxes	$/Authorized User (i.e. Mailbox) /Year
0-1,999	+
2,000-4,999	+
5,000-9,999	+
10,000-24,999	+
25,000-49,999	+
50,000-99,999	+
100,000 plus	+

(+) Denotes text that was intentionally made illegible in the original agreement.

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The Price per Enterprise for each Authorized Users (also referred to as “Mailboxes” under the Prior Agreement) with access to the Service is based upon the total number of Authorized Users on a per Enterprise basis. For example, if an Enterprise has 30,000 Authorized Users, Brightmail would pay Symantec $150,000 ($5/Mailbox/year). If that same Enterprise increased its number of Authorized Users by 5,000 additional Authorized Users, Brightmail + per the terms of this Agreement.

Payment for a minimum of * Authorized Users is required per Enterprise.

3. New Business:

Licensed Product	Price Per Authorized User for New Business
NAV API	+

For example, upon the Effective Date, +

II. PURCHASE ORDER:

Immediately after execution of this Agreement, Brightmail shall provide Symantec with a purchase order for the full amount of the fees under this Agreement for the * and Minimum Commitment Payment for New Business. Symantec shall invoice Brightmail per the terms of the Agreement. The purchase order shall be for the amount of +

(+) Denotes text that was intentionally made illegible in the original agreement.

24

CONFIDENTIAL TREATMENT REQUESTED

No later than the Amended Date, Brightmail shall provide Symantec with a purchase order for the full amount of the Minimum Commitment Payment due under this Agreement, the signature pages of this Agreement and the check for the full amount due. +

III. PAYMENT SCHEDULE AND REPORTING:

1. General

For the purposes of this Agreement a twelve (12) month annual period is any consecutive twelve (12) calendar months starting with the first month of the Effective Date, whether or not it is a full calendar month. For purposes of this Agreement, a quarter is any three (3) calendar months starting with either January, April, July, or October.

All Payments, for purposes of both Existing Business and New Business which are not received within * days from the indicated Payment due date will be subject to late payment penalty fees. All Minimum Commitment Payments are due on the date indicated on the schedules below without net thirty (30) being applied unless otherwise indicated.

2. Minimum Commitment Payments.

For the first three (3) quarters after the Effective Date, a Minimum Commitment of + for each calendar * shall apply to the Existing Business. In terms of New Business, the Minimum Commitment Payment is the * payable over * for the Term of the Agreement, in the amount of + per calendar *, starting on the Effective Date of this Agreement. The Minimum Commitment Payment for the additional licenses added as of the Amended Date is payable initially on an * basis for the first year, starting on the Amended Date; and then thereafter, unless not renewed per the terms of Section IX, is paid *, starting March 26^th, 2004 until the end of the Term of the contract. The Minimum Commitment Payments shall be due in full according to the Minimum Commitment Payment schedule set forth below.

*

The Minimum Commitment Payments for the Existing Business do not include any Existing Business Adjustment in the first three (3) quarters from the Effective Date of the Agreement, Incremental * purchases through out the Term, or Existing Business in the fourth quarter of year one (1), all of year two (2), or year three (3).

* Only the * payments indicated by asterisks will be on payment terms of * days from the following *, * & * all other payments set forth above will remain as stated herein.

3. Reporting and Payments for the Price In Excess of the Minimum Commitment Payments.

(i) Existing Business: All Payments other than Minimum Commitment Payments, which are made in * shall be calculated on the last calendar Friday of the last * of the end of the calendar *, using the then

(+) Denotes text that was intentionally made illegible in the original agreement.

25

CONFIDENTIAL TREATMENT REQUESTED

existing Authorized User total, and shall be payable *. The Regional Report showing the Authorized User total for each * and the calculations of Payments due based on such totals shall be due from Brightmail within + days after the end of each calendar * during the Term for the *. Brightmail shall only be required to remit Payments for the Price so calculated to the extent that such Payments exceed the amount of any * portion of the Minimum Commitment Payment actually paid with respect to the applicable calendar * (the “Existing Business Adjustment”). Brightmail shall remit the amount of any Payments due as shown on each Regional Report with the Regional Report. In no event will the amount by which any Minimum Commitment Payment exceeds the actual Payment due calculated on the number of Authorized Users be refunded or carried over to any subsequent *.

(ii) * and Incremental *. Incremental * at the Price indicated above must be purchased for any Authorized Users exceeding the number of Authorized Users indicated under a * and shall be due per the payment terms above. A Regional Report showing the Authorized User total for New Business, as totalled on the last Friday of the calendar * and the need for the purchase of an Incremental License based on the actual number of Authorized Users shall be due from Brightmail within + days after the end of each calendar * during the Term for the preceding calendar *. Brightmail shall only be required to purchase an Incremental License and remit Payments for the Price of the Incremental License so calculated to the extent that such actual number of Authorized Users exceeds the total of the * actually paid with respect to the applicable calendar *. Brightmail shall remit the amount of any Payments due as shown on each Regional Report with the Regional Report. Minimum Commitment Payments payable at the end of each * based on the Payment schedule set forth above will be applicable for that * only of the Term. In no event will the amount by which any * Payment or any additional Payment for an Incremental * exceeds the actual number of Authorized Users in any given * or * or * be refunded or carried over to any subsequent time period. In addition, the additional Payment for the Incremental * is prorated for the period remaining in any * payment period and only applies to that co-terminus * period.

IV. TERRITORY

The Territory shall be Worldwide.

V. SUPPORT

Brightmail shall continue to provide all direct technical support to (i) Authorized Sublicensees and contractually require the Authorized Sublicensees to provide such to the Authorized Users (regardless of whether they are Evaluations), (ii) Internal Users and (iii) Resellers of the Licensed Products through its standard technical support program. Symantec shall provide no support under the terms of this Agreement

(+) Denotes text that was intentionally made illegible in the original agreement.

26

EXHIBIT “B”

ALL PRIOR APPROVED ARRANGEMENTS WITH A UNIQUE DEFINITION OF

AUTHORIZED USER APPROVED PRIOR TO THE EFFECTIVE DATE

Name of Authorized Sublicensee	Effective Date of Agreement with Brightmail	Ending Date of Agreement with Brightmail	Approved Definition of Authorized User	Date Approved and Symantec Person Approving
+	+	+	+	+
+	+	+	+	+
+	+	+	+	+
+	+	+	+	+
+	+	+	+	+
+	+	+	+	+

(+) Denotes text that was intentionally made illegible in the original agreement.

27

CONFIDENTIAL TREATMENT REQUESTED

EXHIBIT “C”

SERVER SECURITY REQUIREMENTS

[GRAPHIC]

Information Technology

Security Requirements for ISPs and ASPs Providing Services on Behalf of Symantec

Revised December 3^rd, 2001

Version 1.4

28

CONFIDENTIAL TREATMENT REQUESTED

TABLE OF CONTENTS

1. Network-Level Requirements	2
2. Operating System-Level Requirements	2
3. Application-Level Requirements	3
4. Use of Encryption	3
5. Audit Requirements	3

Revision history:

Date	Author	Description
17/11/00	*	-Updated format -Updated BS 7799 reference (now ISO Recommendation 17799) -Updated phone number for Tim Mather
1/1/01	*	-Updated logos -Andersen Consulting now Accenture
3/13/01	*	-Added section on use of encryption
9/22/01	*	-Revisions to requirements in all sections

Page 1

CONFIDENTIAL TREATMENT REQUESTED

Introduction

These security requirements pertain to non-Symantec organizations, which will be providing services to, or on behalf of, Symantec. This might include product information that is relied upon by our customers, electronic delivery of products or Certified Definitions for viruses, or the collection of registration information.

There are five (5) sets of requirements for providing services to, or on behalf of, Symantec. Those requirements are:

1. Network-Level Requirements: Vendor shall have * addresses network-level requirements * dealing with issues such as *

1.1. * shall be used to protect * Symantec information. *.

1.2. *.

1.3. *.

2. Operating System-Level Requirements: Vendor shall have * addresses operating system-level requirements, *, dealing with issues such as *

2.1. *.

2.2. *.

2.3. Operating system(s) * shall *.

2.3.1.  Several organizations and vendors have documentation, checklists, or tools designed to facilitate this security configuration process, and are generally recognized as “best practices”. For example,

2.3.1.1. *.

2.3.1.2. *.

2.3.1.3. *

2.4. Vendor shall have *.

2.5. Service provider shall have *.

3. Application-Level Requirements

3.1. *.

3.2. Service provider shall have a documented *, and shall adhere to application vendor’s recommendations for “best practices”.

4. Use of Encryption

4.1. Encryption shall be used under the circumstances listed below.

4.1.1. *.

4.1.1.1. *.

4.1.1.2. *.

4.1.2. *.

4.1.3. *.

5. Compliance Verification Requirements

5.1. Service provider shall *.

5.1.1.1. * shall be:

5.1.1.1.1.*, or

5.1.1.1.2.*, or

5.1.1.1.3.*.

*.

5.2. Small contracts

5.2.1. Vendors whose contracts are less than * with Symantec may chose * to fulfill * verification of all security requirements.

*Questions concerning these requirements should be directed to *, Symantec’s Director of Information Security. He can be reached at *.

Page 2

CONFIDENTIAL TREATMENT REQUESTED

[GRAPHIC]

EXHIBIT “D”

Guidelines for Using Symantec’s Trademark/Logo

Brightmail or Authorized Sublicensee shall use Symantec’s Trademark/Logo in accordance with these guidelines made by Symantec concerning the appearance, placement or use of the Trademark/Logo.

Brightmail or Authorized Sublicensee shall:

(p) use only approved Trademark/Logo artwork provided by Symantec;

(q) not display the Trademark/Logo more prominently, or larger than, or before the Brightmail or Authorized Sublicensee’s company name/logo and product name/logo, wherever displayed;

(r) not refer to Brightmail or Authorized Sublicensee’s products in which the Trademark/Logo is referenced as “Symantec software” or imply that Symantec produced, endorsed, or supports the Brightmail or Authorized Sublicensee’s Products;

(s) not display the Trademark/Logo in a manner or location disparaging to Symantec;

(t) not display the Trademark/Logo in any publication or on a web site that is pornographic, violent in nature, is in poor taste or unlawful, or which has a purpose or objective of encouraging unlawful activities;

(u) not use the Trademark/Logo as a possessive or in the plural form;

(v) use the Trademark/Logo as an adjective followed by generic descriptors;

(w) include a ^TM symbol after the first or most prevalent use of the Trademark/Logo on each page in which it appears, and attribute the Trademark/Logo as a U.S. trademark of Symantec Corporation in a legend on packaging, splashscreens, web pages, and other materials where the Trademark/Logo appears;

(x) not include the Trademark/Logo in Brightmail or Authorized Sublicensee’s company name, business name, or in the name of Brightmail or Authorized Sublicensee’s product, technology, services, web page, or in any manner suggesting an affiliation or endorsement by Symantec of Brightmail or Authorized Sublicensee or its beliefs, ideas, products, technology, or services;

(y) not use the Trademark/Logo in connection with any product competing with a Symantec product, including, without limitation, the sale or advertisement thereof;

(z) supply Symantec with suitable specimens of Brightmail or Authorized Sublicensee’s use of the Trademark/Logo at any time upon reasonable notice from Symantec; and

Page 3

CONFIDENTIAL TREATMENT REQUESTED

(aa) comply with Symantec’s request to correct, remedy, or discontinue any use by Brightmail or Authorized Sublicensee of the Trademark/Logo which is determined by Symantec to be improper under these Guidelines.

(bb) The following suggestions and guidelines will help to make the review and approval process of marketing material more effective and timely.

To help expedite the approval process, Brightmail’s marketing can:

• Appoint a marketing point of contact within Brightmail to work with Symantec on the review and approval on marketing material and to determine appropriate branding/messaging with regard to Symantec products.

• Brightmail to provide marketing pieces to Symantec for upcoming Authorized Sublicensee deals no less than one (1) month in advance of planned launch date so Brightmail’s timelines can be accommodated as much as possible by starting to review the promotional material in advance of the launch.

• On all future launches, provide Symantec with marketing launch plan and timeline, so Symantec has advance notice of what marketing pieces will need review and approval and when, thus helping to accommodate Brightmail’s timelines as much as possible.

• Use Symantec’s standard word descriptions for Norton AntiVirus 2002 and Norton Person Firewall 2002. See attachments (nav2002_wd.doc and npf2002_wd.doc). The updated 2003 word descriptions will be provided when available.

• Follow our “Guidelines for Using Symantec’s Trademark/Logo”, see attached document (Guidelines for Using Symc Tmdemarks.Logos.053102.doc), also exhibit D in the contract.

• Follow guidelines as set forth in the contract, see Terms and Conditions, section d.

(cc) The following Trademarks and footnotes are to be used:

[GRAPHIC]

Trademark/Logo footnote:

Symantec and the Symantec logo are U.S. registered trademarks of Symantec Corporation. Powered by Symantec^TM is a trademark of Symantec Corporation.

Page 4

CONFIDENTIAL TREATMENT REQUESTED

(dd) The following phrases are approved by Symantec for use in the following manner:

The following examples are approved for use by Brightmail:

With Brightmail AntiVirus, powered by Symantec^TM, you can feel secure that all your e-mail is protected.

The Brightmail Anti-Virus Solution, powered by Symantec^TM anti-virus technology, protects users from the increased threat of infection via email.

The following examples are approved “powered by Symantec” messages relevant to Authorized Sublicensees of Brightmail:

1. [INSERT AUTHORIZED SUBLICENSEE’S SERVICE NAME HERE] combines the virus detection and repair technology from Symantec, with the proven rapid response messaging system filtering technology of the Brightmail Logistics and Operations Center (BLOC) to identify, redirect, clean then deliver the emails.

2. With Powered by Symantec’s AntiVirus technology, Brightmail is able to provide enterprise customers with top-level security from viruses. By combining Symantec’s unrivaled virus detection and repair technology with Brightmail’s real time rule delivery and message filtering technology, Brightmail brings [INSERT AUTHORIZED SUBLICENSEE’S NAME HERE] fast, most thorough virus-protection available, combined with an ISP-strength anti-spam solution.

3. When a virus threat occurs, experts at Symantec Security Response deliver to Brightmail the anti-virus definitions, services and response to combat the outbreak.

4. Brightmail’s proprietary Anti-Spam technology and Brightmail’s Anti-Virus technology, powered by Symantec, together filter out spam and viruses at the gateway.

5. [INSERT AUTHORIZED SUBLICENSEE’S NAME HERE] is deploying Brightmail^® Anti-Virus software, powered by Symantec. Brightmail is a technology leader in spam management software. The virus-identifying and blocking technology prevents contaminated e-mails from causing damage to computer files and to the network. The antivirus software will scan all incoming e-mail messages to [INSERT AUTHORIZED SUBLICENSEE’S NAME HERE]’s subscribers, clean infected messages, and notify the recipient if a virus is detected and removed.

6. [INSERT AUTHORIZED SUBLICENSEE’S SERVICE NAME HERE] with junk-email filtering powered by Brightmail, and e-mail virus filtering powered by Symantec^TM, starts at just $X, a month. One hundred percent filtering is not guaranteed.

7. Access your email from anywhere around the world. [INSERT AUTHORIZED SUBLICENSEE’S SERVICE NAME HERE] provides filtering for junk e-mail and email viruses. No software to install! Filtering for junk e-mail is powered by Brightmail, and filtering for e-mail viruses is powered by Symantec^TM.

Page 5

CONFIDENTIAL TREATMENT REQUESTED

EXHIBIT “E”

“REPORTING REQUIREMENTS”

No later than thirty (30) days following the end of each calendar quarter, during the Term, Brightmail will provide Symantec with a report containing certain transaction information, including but not limited to the following:

(viii) Basic Licensee Information. Report should indicate Brightmail’s corporate name and corporate address, indicating a contact person if there are any questions.

(ix) Identify Authorized Sublicensees. Provide corporate name of the Authorized Sublicensees of the BMI Service as well as those provided by the Reseller. Also provide the name (and if possible, address) of the Reseller.

(x) First Date of Use of the Licensed Product as incorporated into the BMI Product Date. Indicate First Date of Use each Authorized Sublicensee initially signed up for the Service, how long of a term the contract between Brightmail and the Authorized Sublicensee is for, and indicate the total of new Authorized Users for the calendar quarter by Authorized Sublicensee.

(xi) Authorized User Information. Indicate how many Authorized Users are active by the last Friday in each calendar quarter time period per Authorized Sublicensee. How Authorized User is being defined with each Authorized Sublicensee. The Minimum Commitment and number of Authorized Users by which the Minimum Commitment is exceeded.

(xii) Excel Format. All reports should be in Excel format and indicate the final net amount to be received from the Authorized Sublicensee.

(xiii) Regional reporting as outlined in the Agreement under Section V.2 As this is an international contract, the reporting must also be by geographic country so that Symantec can properly account for tax purposes.

(xiv) Brightmail has provided a mock report which is attached hereto as Exhibit E-1 and obtain Symantec’s written approval of the format of such report.

Page 6

CONFIDENTIAL TREATMENT REQUESTED

Exhibit E-1

Page 1

Brightmail, Inc. 301 Howard Street San Francisco, CA 94105 contact: * phone: *; email * * Preliminary Royalty Report CONFIDENTIAL TREATMENT REQUESTED

Authorized Service Provider

Customer Type

Definition of Authorized User

Region

Acceptance Date

Contract End Date

EULA Term in Months

Royalty Rate

* Royalty

Feedback Notes

Users

Minimum Commitment or Authorized Users

Effective Rate

Proration

Est. royalty

*

*

XSP

*

Americas

11/15/2001

*

*

New

*

AU

*

*

$

*

*

XSP

*

Americas

8/12/2002

*

*

New

*

minimum

*

*

$

*

*

*

$

*

*

*

ENT

*

Americas

9/28/2001

*

*

Converted

*

minimum

*

*

*

ENT

*

Americas

9/12/2001

*

*

Converted

*

minimum

*

*

$

*

*

*

ENT

*

Americas

7/1/2001

*

*

Converted

*

minimum

*

*

$

*

*

*

$

*

*

*

XSP

*

Asia/EMEA

3/1/2002

*

*

Converted

*

minimum

*

*

$

*

*

XSP

*

Americas

12/31/2001

*

*

Converted

*

minimum

*

*

$

*

*

XSP

*

Americas

3/4/2002

*

*

Converted

*

minimum

*

*

$

*

*

XSP

*

Americas

12/31/2001

*

*

Converted

*

AU

*

*

$

*

*

XSP

*

Americas

10/17/2001

*

*

Converted

*

AU

*

*

$

*

*

XSP

*

Americas

9/28/2001

*

*

Converted

*

minimum

*

*

$

*

*

XSP

*

Americas

12/27/2001

*

*

Converted

*

minimum

*

*

$

*

*

XSP

*

Americas

12/1/2001

*

*

Converted

*

AU

*

*

$

*

*

*

$

*

*

*

XSP

*

Asia/EMEA

4/30/2002

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Asia/EMEA

1/1/2002

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Asia/EMEA

2/1/2002

*

*

Existing

*

est based on Q2 AU

*

*

$

*

*

$

*

*

*

$

*

Minimum Commitment Payment

*

$

*

Additional Amount Due

$

*

*

*

XSP

*

Americas

5/16/2002

*

*

Existing

*

AU

*

*

$

*

*

XSP

*

Americas

5/1/2001

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Americas

5/1/2001

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Americas

3/1/2001

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Americas

12/7/2001

*

*

Existing

*

AU

*

*

$

*

*

XSP

*

Asia/EMEA

1/1/2002

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Asia/EMEA

1/1/2002

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Asia/EMEA

7/29/2002

*

*

New

*

minimum

*

*

$

*

*

XSP

*

Asia/EMEA

7/15/2002

*

*

New

*

minimum

*

*

$

*

*

XSP

*

Americas

3/5/2002

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Americas

3/1/2001

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Americas

3/15/2002

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Americas

12/17/2001

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Americas

5/17/2001

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Americas

8/20/2001

*

*

Existing

*

AU

*

*

$

*

*

XSP

*

Americas

3/1/2002

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Americas

5/20/2002

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Americas

3/1/2002

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Americas

12/31/2001

*

*

Existing

*

minimum

*

*

$

*

*

XSP

*

Americas

4/1/2002

*

*

Existing

*

AU

*

*

$

*

*

XSP

*

Americas

12/21/2001

*

*

Existing

*

AU

*

*

$

*

*

XSP

*

Americas

1/17/2001

*

*

Existing

*

minimum

*

*

$

*

*

*

$

*

*

*

ENT

*

Americas

12/20/2001

*

*

Existing

*

*

*

*

ENT

*

Americas

4/1/2002

*

*

Existing

*

*

*

*

*

$

*

*

*

$

*

Minimum Commitment Payment

$

*

Additional Amount Due

$

*

*

ENT

*

Americas

*

ENT

*

Asia/EMEA

*

$

*

*

$

*

*

*

XSP

2/1/2001

*

Audit Adjusted

*

$

*

*

XSP

6/1/2001

*

Audit Adjusted

*

$

*

*

XSP

3/9/2001

*

Audit Adjusted

*

$

*

*

Page 2

CONFIDENTIAL TREATMENT REQUESTED

Exhibit “F”

The following Converted Business will be included under the * at the royalty rate indicated in Exhibit A as Existing Business.

Authorized Sublicensee	First Date of Use	Contract End Date	AV Pricing	No. of months in Term of Authorized Sublicensee’s contract	Royalty Rate
+	+	+	+	+	+
+	+	+	+	+	+
+	+	+	+	+	+
+	+	+	+	+	+
+	+	+	+	+	+
+	+	+	+	+	+
+	+	+	+	+	+
+	+	+	+	+	+
+	+	+	+	+	+
+	+	+	+	+	+
+	+	+	+	+	+
+	+	+	+	+	+
+	+	+	+	+	+
+	+	+	+	+	+
+	+	+	+	+	+
+	+	+	+	+	+
+	+	+	+	+	+

(+) Denotes text that was intentionally made illegible in the original agreement.

* Both approved by an officer of Symantec as an exception to the * requirement.

Page 1

CONFIDENTIAL TREATMENT REQUESTED

EXHIBIT G

DISTRIBUTION AGREEMENT

This Distribution Agreement is entered into on              (“Effective Date”) by and between Brightmail Incorporated, a California corporation (“BMI” or “Brightmail”) with principal offices at 301 Howard Street, Suite 1800, San Francisco, CA 94105 and             , a              corporation (“Distributor” or “            ”), with principal offices at             . BMI and              will collectively be referred to as the “Parties” and each of them will be a “Party”.

WHEREAS, BMI develops and licenses client/server software, and hosts software related services, including but not limited to, software and services that reduce or eliminate Spam;

WHEREAS,              wishes to obtain from BMI the non-exclusive right to market and distribute certain BMI products and services to its customers directly and indirectly through resellers of Distributor, and BMI agrees to appoint              for such purposes subject to the terms and conditions of this Agreement.

NOW THEREFORE, in consideration of the mutual covenants contained herein, the Parties agree to the following terms and conditions, which set forth the rights, duties and obligations of the Parties:

19. DEFINITIONS

19.1 “Affiliate” means any entity in which              has a greater than fifty-percent (50%) equity ownership interest in or which              has voting control over, or any entity which owns a greater than fifty-percent (50%) equity ownership interest in or which has voting control over             .

19.2 “Agreement” is this Distribution Agreement entered into by the Parties, together with all and any Exhibits attached hereto and made a part hereof, and all and any amendments or modifications made hereto pursuant to mutual written agreement of the Parties.

19.3 “Application Service Provider” or “ASP” is an entity that provides application services remotely for a fee or other consideration to its Customers, none of whom are under the ASPs immediate employ or the employ of any parent, or subsidiary.

19.4 “BMI Trademarks” are the trademarks, logos and trade names of BMI which may be registered or unregistered and include, but are not limited to, those BMI Trademarks set forth at http://www.brightmail.com/trademark.html.

19.5 “Customer(s)” is the individual that subscribes to the End Users’ email services; or the total number of Mailboxes existing on the End Users’ email system and/or that have access to the Services

19.6 “Documentation” is BMI’s standard system administrator documentation that outlines the system architecture and its interfaces of the Product, including comprehensive guides on installation and operations, and on application program interfaces (“API”).

19.7 “End User (s)” is the ISP, ASP or Enterprise customer that upon executing an End User License Agreement, obtains a license for the Software and Services for its own internal use with Internet services or online application services for the benefit of its End Users.

19.8 “End User License Agreement” is the license and service agreement between an End User and              that governs the End User’s rights and restrictions in use of the Product and in receiving

Page 1

CONFIDENTIAL TREATMENT REQUESTED

the benefit of the Services, and that contains substantially the minimum terms and conditions detailed in the attached Exhibit B.

19.9 “Enterprise” individually and collectively the entities other than ISPs and ASPs that procure Services for internal use in conjunction with the entities’ internal needs for the benefit of its employees, agents, and contractors.

19.10  “IP Rights” means all and any intellectual property rights in the Software, the Documentation and BMI Trademarks, and/or which are derived or arise from the Services, including copyrights, inventions, patents, trade marks, service marks, trade names, moral rights, mask words, trade secrets, goodwill, confidential and proprietary information, compositions and formulae whether created in the United States of America or elsewhere and all applications for registration and registrations of such rights.

19.11  “Internet Service Provider” or “ISP” is an entity that provides Internet access and messaging services for a fee or other consideration to its End Users, none of whom are under its immediate employ or the employ of any parent, or subsidiary.

19.12  “Mailbox(es)” is an area in memory in a storage device where email is placed and/or stored, i.e., an email address. An individual End User may have one or many Mailboxes.

19.13  “Marketing Materials” are sales and marketing collateral including but not limited to: sales presentations, datasheets, white papers, press releases, industry articles, benchmark test reports, competitive evaluations, and customer testimonials.

19.14  “Product” or the “Brightmail^® Solution Suite” comprises the Software, including Updates and Upgrades thereto, if any, the Services and the Documentation, as more fully described in Exhibit A, attached hereto and made a part hereof.

19.15  “Rules” are explicit, conditional statements, or criteria, that are created and used by BMI to detect and filter Spam (as defined below), and are made available by BMI to             ’ or directly to End Users solely as part of the Services.

19.16  “Rule Update (s)” are modifications and revisions to the Rules made available by BMI to              or directly to End Users as part of the Services.

19.17  “Server(s)” are a combination of Software, hardware, processes and functions and that are collectively used to filter the incoming mail of End Users. Servers are set up to divert, reject, or discard Spam.

19.18  “Service(s)” are the provision by BMI of its email analysis and filtering system, which services include the creation of Rules and Rule Updates, Updates (as defined below) and Upgrades (as defined below), all of which are used to detect Spam. Services also include Server support and general Product support as more fully described in this Agreement.

19.19  “Service Provider(s)” are ASPs and ISPs, collectively.

19.20  “Software” is BMI’s email-filtering software, and is part of the Product. The Software is more fully described in Exhibit A, attached hereto. To the extent that BMI (in its sole discretion) provides              or directly to End Users with any Updates and/or Upgrades during the term of this Agreement, all references to Software will include such Updates and/or Upgrades.

19.21  “Sale” and /or “Sell” means the distribution of the Software to the End User. All Software sold to the End User will be pursuant to a End User License Agreement

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19.22  “Territory” means the territory comprising the countries described in Exhibit A attached hereto.

19.23  “Training Materials” means informational materials, including but not limited to summary Product and Service information, frequently asked questions and responses, architectural and functionality descriptions and diagrams, etc., and other information included in BMI’s training materials for its training classes.

19.24  “Updates” are minor updates of, or error corrections and bug fixes to the Software that do not add significant new functions to the Software, and that are released by BMI, in its sole discretion. Updates are designated by an increase to the Software’s release number to the right of the decimal point (e.g., Software 1.0 to Software 1.1). The term Updates specifically excludes Upgrades and excludes any software marketed and licensed by BMI as a separate product.

19.25  “Upgrade(s)”are any major revisions to the Software, which adds significant new functionality, if and when released by BMI, in its sole discretion. Upgrades are designated by an increase in the Software’s release number, located to the left of the decimal point (e.g., Product 1.x to Product 2.0). The term Upgrade specifically excludes any software marketed and licensed by BMI as a separate product.

20. APPOINTMENT; GRANT OF RIGHTS

20.1 Subject to the terms and conditions contained in this Agreement, BMI hereby appoints              as an authorized distributor of the Product and              hereby accepts such appointment. Subject to the terms and conditions of this Agreement, BMI grants to              for the duration of the Term (as defined below), a non-exclusive, revocable, royalty-bearing, license (“License”) to market and distribute the Product to End Users, specifically, ISPs, ASPs, and/or Enterprises, within the Territory and that are using the Solaris operating system. The parties understand and agree that pricing, as provided herein, is dependent on the End User type, e.g., ISP, ASP or Enterprise, and the manner in which the End User will pay for the Product, e.g., for all Customers existing on its email services or for those Customers receiving the benefit of the Services.              will report the End User type and the manner in which the End User is paying for the Product to BMI as provided in Section 6, 9, and Exhibit C, herein.              will provide the Product to End Users pursuant to an End User License Agreement.              may distribute the Product directly, or indirectly via its authorized resellers (each a “Reseller”).              may appoint one (1) or more persons to act as a Reseller, provided that              has written agreements with each such Reseller containing terms protecting BMI and its proprietary Product to the same extent as provisions              relies on to protect its own products (“Reseller Agreement”).              will take all reasonable measures to enforce such provisions in favor of BMI to the same extent that it would enforce such Reseller Agreements on its own behalf.              may only grant Resellers the right to make sales to End Users. Each Reseller Agreement will contain provisions making BMI a direct and intended third party beneficiary of such Reseller Agreement, such that BMI may enforce its proprietary and intellectual property rights against any of             ’s End Users and Resellers.

20.2 In connection with             ’s sale and distribution of the Products to End Users, BMI will be solely responsible for the delivery of the Services to End Users, directly, and BMI agrees to provide the Services in accordance with the same policies and procedures that it uses to provide the Services to its own direct customers and licensees.              will have no right or license to distribute, display or otherwise make available the Rules or Rule Updates. Brightmail may, at its sole discretion, and subject to the then-current fee, if any, and subject to certain restrictions, allow              to distribute the Rules or Rule Updates to its End Users.

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20.3 BMI will deliver to              one (1) master copy of the Software in machine executable object code format together with BMI’s labeling and Documentation artwork data files, in electronic format. Subject to the terms and conditions of this Agreement, BMI grants to              a nonexclusive, non-transferable, royalty-free right and license to copy the Software in machine executable object code format only and to copy the Documentation for incorporation in documentation for distribution to Resellers or End Users in accordance with the terms and conditions of this Section. Any use of BMI’s trademarks, trade names or logos will be in accordance with Section 8 below.

20.4 Subject to terms and conditions of this Agreement, BMI grants to              for the duration of the Term a non-exclusive, revocable, royalty-free and fully paid up, non-transferable license to install and use copies of the Software solely for internal, non-commercial use, including, by way of example, development, support, testing and customer care services (“Support License”). This Support License may be used at any of             ’s facilities where needed, and, on a royalty-free basis. BMI will provide              any Rule Updates, Updates and Upgrades as commercially made available for these Support Licenses.

20.5 BMI hereby grants to              a non-exclusive, royalty-free license, at its sole expense, to translate the Documentation, Training Materials, and Marketing Materials for distribution with the Product to non-English speaking countries. As between              and BMI,              will be solely responsible for any and all liability that results directly from the translation of the materials to any language other than English. If during the term, BMI desires to obtain a translated version, BMI will notify              of such in writing, and following reimbursement by BMI of half (¹/₂) of             ’s cost in translating the materials into the requested language,              will make the translated versions available to BMI for its unrestricted use.

20.6 With each potential End User,              may offer a one-time evaluation license to that potential End User, provided the evaluation extends for no more than sixty (60) days, unless              obtains BMI’s prior written permission. Such evaluation will be conducted at no charge to the End User, and will only be used as a lead into the attempted sale of licenses in accordance to the terms and conditions herein.

20.7 Distributor may describe itself as the authorized distributor for the Product in the Territory, but will not hold itself out as an agent, representative, partner or joint venture partner of BMI or being in any other way connected with BMI. Distributor will at all times be an independent contractor.

20.8 Each party will appoint a representative as a relationship manager who will be the primary contact for implementing and administering the terms and conditions of this Agreement (“Relationship Managers”). The Relationship Managers will be those people set forth on Exhibit A and will meet, either in person or via teleconference at least monthly and at mutually agreeable times to review and coordinate sales efforts, review             ’s marketing/sales strategies, review End Users’ response to the Services and address other topics related to the successful support of the Products.

21. RESTRICTIONS

21.1              will not use, apply or otherwise deal with the Product for any purpose other than the purpose set out in Section 2.1 of this Agreement.              will not decompile, reverse engineer, disassemble, reconstruct, tamper with or otherwise determine, or attempt to derive, reconstruct or discover the source code for the Product or any part thereof, or modify or create or attempt to create any derivative works from or based on the Product, nor will             authorize, permit, or assist any End User or anyone else to do so.              will not, and will not authorize, permit, or assist any End User to determine or attempt to determine the Rules or Rules Update(s) used by the Software under any circumstances whatsoever.

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21.2              will require that use of the Product by its End Users will be in accordance with the Documentation or any other operation or user instructions or manuals furnished by BMI or its licensors, and in accordance with any other reasonable requirements of BMI.

22. PROPRIETARY RIGHTS

22.1 Ownership of all rights (including the IP Rights), title and interest in the Product (including but not limited to copies of the Product contained in any storage media) the Marketing Materials, Training Materials and any other materials provided by BMI to              will at all times remain the absolute and exclusive property of BMI and/or its licensors, as the case may be. Except as expressly granted herein,              is granted no rights to create derivative works of the Product, or to distribute the Product to third parties. In the event that notwithstanding the above,              has or acquires any such said rights, title or interest,              will be deemed to have irrevocably assigned and transferred the same to BMI free from any requirement on the part of BMI to pay any fees. Further and if required by BMI at BMI’s cost,              will execute and deliver to BMI all relevant documents of assignment and transfer in respect of the said rights, title or interest, and the documents will be in such form as may be required by BMI.

22.2             , its officers, employees, servants and agents will not remove, alter, obscure, conceal or otherwise interfere with any BMI Trademarks, or other EP Rights in the Product, appearing on or in copies of the Product or on the Software or other materials delivered to              by BMI. In connection with the distribution of the Product,              will use those notices, legends, symbols or labels in connection with the Product in the same manner as they appear on or in the Product.

23. NO OTHER RIGHTS.

Except as expressly provided herein, no right (including the IP Rights), title or interest in any Product is granted by BMI to             , and all such right, title and interest is reserved and retained by BMI. Without limiting the foregoing, B MI reserves the right to use, distribute, sell, resell, apply, import, export, make, have made, use, copy, modify, have modified, create derivative works of, have created derivative works of, demonstrate, maintain, support or otherwise exploit the Product in any part of the world (including the Territory), and the right to license the foregoing rights.

24. SCOPE OF SERVICES; ORDERS AND DELIVERY; TRAINING

24.1              will submit a purchase order (“Order”) to BMI in writing or via email for the Services to be provided to each of its End Users pursuant to one or more End User License Agreements. The purchase order shall be issued upon execution of an End User License Agreement. The Order shall state the Order number, End User name, Service description, applicable Fee (as defined in Section 9.1), End User categorization (i.e., an ISP, ASP or Enterprise), the manner in which the End User is paying for the Product (100% opt-in or selective opt-in), the aggregate number of Customers, a distribution email address for the provision of Rules and Rule Updates, and the contract term. Unless otherwise noted, BMI shall use such Order as evidence that the End User is properly configured to receive the Services, and BMI shall commence the provision of such Services within four (4) days of receipt of the Order.              shall notify BMI promptly in writing with respect to any: (i) effective dates of evaluations and/or acceptance by any End Users; (ii) termination or expiration of a End User License Agreement; and (iii) any other relevant change in Service description.              will provide a quarterly report, verifying and updating the information contained’ in the Order for each End User, including the then current of numbers of Customers per End User (“Product Report”). The Product Report will be due within fourteen (14) calendar days of the end of the quarter for the just ended quarter; e.g., the Product Report due for January, February, and March, will be due on April 14. BMI will generate an invoice for any increases in the number of End Users provided within the Product Report at the applicable fee rate.

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24.1.1 Any evaluation licenses will be noted within an Order and will contain the same information listed above.              will indicate the beginning and end dates. For any evaluation licenses exceeding sixty (60) days without written consent for extension from BMI,              will be charged the applicable fee for that End User type and in accordance to the terms outlined in section 6.1.

24.2              and BMI mutually agree to work in good faith to reduce channel conflict.

24.3 BMI will make available the following to              in respect of the Product:

6.4.1 Documentation and other written information and data, if any, for the installation, use and application of the Product by              and/or its End Users (as applicable) in either printed or machine-readable form as BMI may in its sole discretion elect.

6.4.2 A reasonable quantity of Marketing Materials and Training Materials to the respective appropriate              contacts in the English Language in electronic or other mutually agreeable format, as available or upon material update, change or enhancement (particularly with respect to any Updates or Upgrades). It is anticipated that              will integrate the Training Materials supplied by BMI into             ’s training curriculum.

6.4.3 In connection with the commencement of this Agreement, the training of a number of suitably qualified employees of              in the marketing and promotion, and the installation, use and application of the Product, and the rendering of training and support services to End Users as described in Exhibit D of this Agreement, as may be required by Distributor. Such training (“Training”) will be undertaken by BMI at the premises of BMI unless otherwise agreed by the Parties. If the Training is at a location other than the premises of BMI,              will be responsible for all expenses that may be incurred by the employees of BMI in attending the Training, including airfare, ground travel expenses, accommodation and meals, and telecommunication expenses.

6.4.4 At the request of             , (a) after the initial execution of this Agreement and (b) thereafter per each Upgrade release, visits to             ’s premises, (but not to exceed three (3) man-days) by such number of suitably qualified personnel of BMI as BMI deems appropriate who will, within their reasonable means and capabilities, address or troubleshoot technical problems encountered by              in connection with the Product.              will be responsible for all expenses that may be incurred by the employees of BMI in providing such services, including airfare, ground travel expenses, accommodation and meals, and telecommunication expenses.

6.4.5 In connection with any Updates and/or Upgrades that may be made available by BMI to             , and on such timing as notified by BMI, the training of a mutually agreed upon number of suitably qualified employees of              at the premises of BMI (unless otherwise agreed by the Parties), and for such period as the parties deem appropriate, in the marketing, promotion, installation, use and application of the Upgrades, and the rendering of training and support services to End Users with respect to such Upgrades and as described in Section 13. Appropriate Update training will be mutually determined after discussions as to the extent and impact of the Updates. For the avoidance of doubt, BMI is not required under

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the terms of this Agreement or otherwise to disclose any source code comprised in the Product or Updates and/or Upgrades.

24.4 If              requires further and additional assistance or instructions beyond any time frame or time limit or number of personnel allocated for purposes of Section 6.4 of this Agreement or requires further and additional assistance or instructions from time to time during this Agreement on any matter relating to the Product or any Updates and/or Upgrades that are not expressly included in Section 6.4 of this Agreement, BMI may provide such assistance or instructions in such manner and by such means as BMI deems appropriate, provided that BMI has the capacity and available resources to provide such assistance or instructions, and provided further that              will pay BMI’s then-current fees for such services upon completion of the effort. BMI will provide a written quotation of the deliverable and the then-current fees and              will provide written acceptance, prior to the start of any services rendered under the scope of Section 6.5.

25. DUTIES OF             

25.1              will at all times during the Term:

25.1.1 observe and perform the terms and conditions set out in this Agreement;

25.1.2  consistent with its resource deployment strategy, devote its reasonable commercial efforts to promoting and marketing the Product in the Territory;

25.1.3  conduct its business in a responsible and ethical manner in the Territory and in accordance with all applicable laws, regulations and rules of the Territory, and not do or permit to be done anything that may bring BMI, the Product, the BMI Trademarks and/or the IP Rights into disrepute;

25.1.4  promptly bring to the attention of BMI any complaints it may receive regarding the Product;

25.1.5  not make or give any warranties, guarantees, representations or other commitments in relation to the Product or Services, other than as provided by BMI in writing (including in any Marketing Materials provided by BMI) or approved by BMI in writing;

25.1.6  promptly and diligently follow up on all End User inquiries consistent with             ’s current business model and in any event, no less than the obligations agreed to herein ;

25.1.7  consistent with its resource deployment strategy, maintain adequate staff trained in and able to fulfill the marketing, distribution and support needs as required under this Agreement;

25.1.8  promote BMI as             ’s Preferred Provider for a Spam filtering service. As a “Preferred Provider,”             agrees that: (i) when a              customer requests a provider for Spam filtering products, it will promote BMI as a              preferred Spam filtering product/service provider; and (ii)              will refer to BMI as its preferred Spam filtering product/service provider in its public announcements regarding the relationship contemplated by this Agreement.

25.1.9  make each End User aware of the importance of providing BMI with email accounts * BMI as probe accounts (“Probes”) in connection with BMI’s provision of the Services and to use reasonable commercial efforts to obtain and provide BMI with a list of the Probes for each End User prior to the first distribution of a Rule.

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26. TRADEMARK LICENSE

26.1              will require in its agreements with its End Users and Resellers that they: (a) describe and refer to the Product as the Brightmail^® Solution Suite or such other name as BMI may specify; (b) use and apply the BMI Trademarks in relation to the Product in the forms stipulated by BMI and in accordance with the guidelines (“Guidelines”) found at http://www.brightmail.com/trademark.html, as updated by BMI from time to time, (if any such Guideline update is material, BMI will supply              with adequate notice to ensure             ’s proper use of such Guideline update) and any other written directions given by BMI as to the appearance, colors, size and placing of all representations of the BMI Trademarks and their manner of use or application in relation to the Product and in any Marketing Materials and in connection with any promotional activities; (c) ensure that the BMI Trademarks are accompanied by wording to show that they are used with the permission of BMI (the content of such wording, placing and size to be as instructed by BMI or as set out in the Guidelines); and (d) save with the prior written consent of BMI, not offer the Product in any packaging other than that provided by BMI and use, affix or otherwise place such marks, logos, labels, markings or notices on the Product in the form provided by BMI.

26.2 Subject to the terms and conditions in this Agreement,              is hereby granted, throughout the Term, a non-exclusive, revocable, royalty-free and fully paid up, restricted right to use the BMI Trademarks in the manner set out in Section 8.1 of this Agreement, and solely in conjunction with the distribution of the Product in accordance with the terms of this Agreement. All representations of the BMI Trademarks that              desires to use will be exact copies of those used by BMI or will first be submitted to BMI for its approval. All right, title and interest in and to the BMI Trademarks, all derivations thereof and any other trademark or service mark adopted by BMI to identify the Product, will belong to BMI or its licensors, as the case may be.              will not acquire, directly or indirectly, any right, title or interest in or to the BMI Trademarks except as expressly set forth herein and as specified in writing by BMI to              from time to time.              will not use any BMI Trademarks in a manner inconsistent with the Guidelines and/or the terms of this Agreement. Furthermore,              will not register any BMI Trademarks in             ’s name, or permit any other third party to register any such BMI Trademarks.              acknowledges that any material breach by it of this Section 8.2 is a material breach of this Agreement that is incapable of cure, permitting BMI to terminate this Agreement upon written notice.

26.3 For the avoidance of doubt, BMI will be the sole party permitted to file or prosecute any registration or application for registration for the BMI Trademarks and/or any of the IP Rights.              will not do or permit to be done any act which may jeopardize or invalidate any registration (or pending registration) of the BMI Trademarks and/or the IP Rights, nor do any act which might assist or give rise to an application to remove any of the BMI Trademarks and/or IP Rights from all and any applicable registers.              will give to BMI any information as to its use of the BMI Trademarks and/or IP Rights that BMI may reasonably require and render any assistance, at BMI’s expense, reasonably required by BMI in maintaining the registrations of any of the BMI Trademarks and/or IP Rights.              will, if required by BMI and at BMI’s expense, do all acts reasonably necessary (including executing any necessary documents) for the recording of              as a registered user of any appropriate BMI Trademarks and/or IP Rights on all and any applicable registers, and              hereby agrees that such entry may be canceled by BMI on the expiry or termination of this Agreement and that it will reasonably assist BMI at BMI’s cost as far as may be necessary to achieve such cancellation (including executing any necessary document).

26.4 Subject to the terms and conditions of this Agreement, BMI is hereby granted a non-transferable, non-exclusive, revocable, royalty-free and fully paid up, restricted license to use             ’s trademarks, logos, service marks and trade names (collectively, “             Trademarks”) to identify that              is BMI customer on BMI’s website, literature, tradeshow signage, and press releases relating to the Product, all in

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accordance with the written directions of              (if any); provided, that BMI will use artwork and logos in the form provided by              and will obtain             ’s approval prior to making changes to such artwork or logos. BMI will clearly indicate             ’s ownership of the              Trademarks. In addition, BMI will be prohibited from registering              Trademarks and all derivations thereof in BMI’s name, or permitting any other third party to register any              Trademarks or derivations thereof. All right, title and interest in and to the              Trademarks, all derivations thereof and any other trademark or service mark adopted by              to identify its products and services, will belong to              or its licensors, as the case may be. BMI will not acquire, directly or indirectly, any right, title or interest in or to the              Trademarks except as expressly set forth herein and as specified in writing by              to BMI from time to time.

26.5 For the avoidance of doubt,              will be the sole party permitted to file or prosecute any registration or application for registration for the              Trademarks. BMI will not do or permit to be done any act which may jeopardize or invalidate any registration (or pending registration) of the              Trademarks, nor do any act which might assist or give rise to an application to remove any of the              Trademarks from all and any applicable registers. BMI will give to              any information as to its use of the              Trademarks that              may reasonably require and render any assistance, at             ’s expense, reasonably required by              in maintaining the registrations of any of the              Trademarks. BMI will, if required by              and at             ’s expense, do all acts reasonably necessary (including executing any necessary documents) for the recording of BMI as a registered user of any appropriate              Trademarks on all and any applicable registers, and BMI hereby agrees that such entry may be canceled by              on the expiry or termination of this Agreement and that it will reasonably assist              at             ’s cost as far as may be necessary to achieve such cancellation (including executing any necessary document).

26.6 From time to time during the term of this Agreement, BMI may desire to use End User’s trademarks, or obtain an End User Case Study, or other similar marketing items in connection with its promotion of the Products.              agrees to use reasonable efforts to obtain one or all of the same from the End User that would permit BMI to refer to the End User, solely in connection with that End User’s use of the Products. After proposing such marketing requests to an End User, should the End User refuse,              agrees that it will provide BMI with a contact at the End User, if such End User allows              to do so, so that BMI may contact the End User directly to obtain permission.

27. FEES AND PAYMENTS

27.1              will pay to BMI a Fee for each Customer reported under the Order or Product Report submitted by              with respect to each Product (“Fees”), as further set forth in Exhibit C. BMI will invoice              for total fees and payments after the receipt of each Order or Product Report as described in Sections 6.1 and 9.5 of this Agreement. Each invoice will be due and payable net thirty (30) days after the date of the invoice. Fees will equal at a minimum the product of the number of Customers on an End Users email system and either the selective opt-in fees or 100% opt-in annual fee as provided in Exhibit C and section 6 of this Agreement. All Orders, Product Reports and Invoices will be in US Dollars.

27.2 All payments to be made by              to BMI under this Agreement will be payable in US Dollars.

27.3 All fees owed by              to BMI under this Agreement will be paid in full within thirty (30) calendar days after the date of invoice without any deduction or withholding (whether in respect of set off, defense, deferment, counterclaim, duties, taxes including turnover tax, value added tax, goods and services tax, withholding tax, government charges or legal dues and otherwise whatsoever) unless the deduction or

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withholding is required by law in relation to tax on the net income of BMI or the employees of BMI, in which case              will: (a) notify BMI of any requirement with respect to the deduction or withholding as soon as              becomes aware of it; (b) ensure that the deduction or withholding does not exceed the minimum amount legally required; (c) pay to the relevant taxation or other authorities within the period for payment required by applicable law the full amount of the deduction or withholding; and (d) furnish to BMI within the period for payment permitted by applicable law an official receipt of the relevant taxation or other authorities in respect of all amounts deducted or withheld.

27.4 All amounts not paid when due under this Agreement will accrue interest at the lesser of one and one half percent (1.5%) per month or the maximum rate permitted under applicable law.

27.5              will maintain complete, proper, accurate and up-to-date records (`Relevant Records”) of all sales of the Services and of the details of all End Users, including contracts, accounts and support logs regarding: (a) the use of Product by End Users, and (b)             ’s compliance with the terms of this Agreement. Such reports will be submitted by              to BMI within ten days of BMI’s request of the same.              will keep all Relevant Records. BMI will have the right to audit (“Audit”) all such records no more than once per twelve (12) month period throughout the term of this Agreement, to confirm the accuracy of the number of Customers reported to BMI, and compliance with any other terms and conditions of this Agreement. The scope of such audit shall be limited to transactions occurring during the preceding 24-month period For the purposes of the Audit,              will ensure that BMI and/or its duly appointed representative will be given access to such principal place of business and to such records and will be entitled to take copies of all such records for the aforesaid purpose. This right will survive one (1) year after termination of this Agreement. Audit will take place during normal business hours and in accordance with             ’s standard security procedures. BMI must give reasonable prior written notice to audit in advance of the desired date. The audit will be conducted at BMI’s expense unless such audit reveals an underpayment to BMI in excess of ten percent (10%) for the period being audited, in which case              will bear the reasonable expenses of the audit.

27.6 Except as otherwise provided hereunder or as otherwise agreed to in writing between the Parties, each Party is responsible for their own expenses incurred in their performance hereunder. Any costs or expenses incurred by the Parties will be at that Party’s sole risk and upon that Party’s independent business judgment that such costs and expenses are appropriate. For the avoidance of doubt,              may not credit any payment of Fees due to any End Users failure to pay.

28. WARRANTIES OF             

28.1                represents and warrants to BMI that:

28.1.1                has the capacity to enter into and perform and comply with its obligations under this Agreement.

28.1.2  All actions, conditions and things required to be taken, fulfilled and done (including the obtaining of any necessary consents, approvals, permits and registration) in order (i) to enable              to lawfully enter into and perform and comply with its obligations under this Agreement, and (ii) to ensure that those obligations are valid, legally binding and enforceable.

28.1.3               ’s entry into and/or performance of or compliance with its obligations under this Agreement do not and will not violate any law to which it is subject.

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28.1.4               ’s entry into and/or performance of or compliance with its obligations under this Agreement do not and will not violate any agreement to which it is a party or which is binding on it or its assets.

28.1.5                is solvent and able to pay its dues as and when they fall due and no proceeding has commenced or any action taken or an order made or an effective resolution passed for the dissolution, winding up, reorganization, reconstruction or bankruptcy of              or, where relevant, for the appointment of a liquidator, liquidation committee, receiver, administrator, trustee or similar officer of              or of all or part of its business or its assets.

29. WARRANTIES OF BMI

29.1 BMI represents and warrants to              that:

29.1.1  BMI has the capacity to enter into and perform and comply with its obligations under this Agreement;

29.1.2  BMI’s entry into and/or performance of or compliance with its obligations under this Agreement do not and will not violate any agreement to which it is a party or which is binding on it or its assets;

29.1.3  any copies of the Product delivered to              will perform substantially in accordance with the Documentation for a period of ninety (90) days from the date of delivery to             . BMI’s sole liability and             ’s sole and exclusive remedy for any breach of this Section 11.1.3 will be repair or replacement of the Product. Any replacement Product or corrected Product will be warranted for ninety (90) days. These warranties are void if any defect is caused by abuse or misapplication of the Product, whether or not by accident, and except for the foregoing warranty, the Products are provided “AS IS” without any other warranty.

30. WARRANTY DISCLAIMERS; AND LIMITATION OF LIABILITY

30.1 THE EXPRESS WARRANTIES SET FORTH IN SECTION 11 OF THIS AGREEMENT ARE THE ONLY WARRANTIES WITH RESPECT TO THE PRODUCT AND ANY PART THEREOF. BMI AND ITS LICENSORS MAKE NO OTHER REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, AND EXPRESSLY DISCLAIM ALL OTHER WARRANTIES. INCLUDING WITHOUT LIMITATION. WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. BMI AND ITS LICENSORS DO NOT WARRANT (a) THAT THE PRODUCT OR ANY PART THEREOF WILL BE FREE FROM DEFECTS, ERRORS OR BUGS, OR (b) THAT THE OPERATION OF THE PRODUCT WILL BE SECURE OR UNINTERRUPTED, OR (c) THAT THE PRODUCT WILL BE ABLE TO PROVIDE OR ATTAIN ANY FEATURES, FACILITIES, FUNCTIONS OR CAPABILITIES, OR (d) THAT ANY RESULTS OR INFORMATION THAT MAY BE DERIVED FROM THE USE OF THE PRODUCT WILL BE ACCURATE, COMPLETE, RELIABLE AND SECURE.

30.2 For any breach of the warranties contained in Section 11.1.3 of this Agreement,             ’s exclusive remedy and BMI’s entire liability will be correction of the defect that caused the breach or the re-performance of the non-conforming Services (as the case may be) at the cost and expense of BMI as soon as reasonably practicable. This warranty is made solely to              and not to any Reseller or End User.

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30.3 IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY LOSS OF PROFITS, LOSS OF BUSINESS, LOSS OF USE OR DATA, INTERRUPTION OF BUSINESS, OR FOR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, EVEN IF SUCH PARTY RECEIVED ADVANCE NOTICE OF THE POSSIBILITY OF SUCH DAMAGES, OR FOR ANY CLAIM BY ANY THIRD PARTY, WHETHER OR NOT ANY OF THE MATTERS AFORESAID ARISES IN CONTRACT OR TORT (INCLUDING NEGLIGENCE) OR MISREPRESENTATION OR BREACH OF STATUTORY DUTY OR ANY DUTY UNDER GENERAL LAW OR ANY OTHER LEGAL THEORY. NEITHER PARTY’S ENTIRE LIABILITY TO THE OTHER UNDER THIS AGREEMENT, REGARDLESS OF WHETHER THE CLAIM FOR SUCH DAMAGES IS BASED IN CONTRACT OR TORT (INCLUDING NEGLIGENCE) OR MISREPRESENTATION OR BREACH OF STATUTORY DUTY OR ANY DUTY UNDER GENERAL LAW OR ANY OTHER LEGAL THEORY, (EXCEPT FOR BMI’S DUTY TO INDEMNIFY              AGAINST INFRINGEMENT AS PROVIDED IN SECTION 15 BELOW) WILL EXCEED THE AMOUNT OF FEES PAID TO BMI BY              DURING THE INITIAL TERM OF THIS AGREEMENT.

31. SUPPORT SERVICES

13.1 Support services shall be provided as set forth in Exhibit D.

32. INDEMNITY

32.1 BMI will defend, indemnify and hold             , together with its officers and employees, harmless from any third-party suit or action against              to the extent such suit or action is based on a claim that the Product infringes any intellectual property rights of a third party where such rights are valid and existing as of the Effective Date and are enforceable in any Berne Convention member nation; and BMI will pay any judgment, loss, cost or expense (including reasonable attorneys fees and costs) incurred in connection with the defense thereof by             . These obligations do not include any claims to the extent they are based on: (i) use of the Product in violation of this Agreement, or (ii) in combination with any other software or hardware (except as specified in the Documentation), or (iii) any modification made to the Product by anyone other than BMI. The indemnity obligations set forth in this section are subject to: (a)              giving reasonably prompt written notice to BMI of any such claim(s); (b) BMI having sole control of the defense or settlement of the claim; and (c) at BMI’s request and expense,              reasonably cooperating in the investigation and defense of such claim(s). To the maximum extent permitted by applicable law, this section states the entire indemnification obligations and liability of BMI with respect to infringement of any intellectual property rights of a third party. Upon BMI’s sole determination, should the Product become, or be likely to become, the subject of a claim of such infringement, or after the entry of any judgment or order not subject to further appeal, that the use of the Product infringes upon the intellectual property rights of any third party, and that such use of the Product must cease, BMI, at its election may, at its own cost and expense, either (a) procure for the End User the right to continue the use and/or receipt of the Product “as is”; (b) modify the Product in such a way that the use thereof does not infringe upon such intellectual property rights of the third party, provided such modification does not materially alter the functionality or performance of the Product; or if neither of the foregoing are commercially feasible, (c) terminate this Agreement by written notice to              and return any pre paid fees for Services not rendered.

32.2 Subject to the provisions of Section 14.1 of this Agreement,              will indemnify and hold BMI (together with its officers and employees) harmless from any third-party suit or action against any judgment, loss, cost, or expenses (including reasonable attorneys fees and costs) which may be suffered or incurred by BMI to the extent such suit or action is based on a claim that (i)              caused personal injury or death of a third-party, or (ii) the              Trademarks infringe the trademarks of any third-party, or (iii) any warranty claims made by End Users for warranties made by              that exceed the scope of

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the warranty expressly set forth herein, or (iv) an act or omission by              to the extent authorized by this Agreement. The indemnity obligations set forth in this section are subject to: (a) BMI giving prompt written notice to              of any such claim(s); (b)              having sole control of the defense or settlement of the claim; and (c) at             ’s request and expense, BMI cooperating in the investigation and defense of such claim(s).

33. TERM

33.1 This Agreement will come into force on the Effective Date, and will continue for a time period specified in Exhibit A attached hereto (“Initial Term”), unless earlier terminated in accordance with Section 17 of this Agreement. Thereafter, if there has been no material breach of the terms of this Agreement by             , at             ’s option and with BMI’s consent, this Agreement will renew for additional one (1) year periods (“Further terms”) until terminated in accordance with this Section 15 and Section 16 below.              will provide BMI with a six (6) month notice not to renew. In the event              fails to provide such notice, such Wind-down period will not exceed the six (6) month period following the termination date, in accordance with section 16.4. The Initial Term and Further Term(s), if any, will be referred to as the “Term”.

34. TERMINATION

34.1 If either Party defaults in the performance of any of its material obligations contained in this Agreement, the non-defaulting Party may terminate this Agreement upon at least thirty days written notice if the default is not cured during such notice period. This Agreement may be terminated by one Party immediately at any time, without notice, if any proceeding is commenced or any action taken or an order is made or an effective resolution is passed for the dissolution, winding up, or bankruptcy of the other Party or, where relevant, for the appointment of a liquidator, liquidation committee, receiver, administrator, trustee or similar officer of the other Party of all or a substantial part of its business or its assets.

34.2 Upon termination or expiration of this Agreement, the rights granted to              under this Agreement (including for the avoidance of doubt, the rights granted under Sections 2 and 8 of this Agreement) will lapse and terminate, and:

34.2.1              will immediately cease and discontinue, and/or procure the cessation and discontinuance of the use of the Product, the BMI Trademarks, the Confidential Information and the IP Rights and immediately remove from its letterhead, advertising literature and place of business all references to the Product and the BMI Trademarks and will also cease to represent itself as the authorized distributor of the Product;

34.2.2 Within thirty (30) calendar days after such said termination or expiration of this Agreement,              will deliver to BMI or destroy all copies of the Software, Documentation, BMI’s Confidential Information, and any other documents, papers, materials or property of BMI which              may have in its possession or under its control and will furnish to BMI an affidavit signed by an officer of              certifying that, to the best of its knowledge, such delivery or destruction has been fully effected; and

34.2.3              will within 30 days of such said termination or expiration of this Agreement, pay to BMI all amounts outstanding in favor of BMI, unless such sums are due earlier, then by the earlier due date.

34.3 Notwithstanding the foregoing, if this Agreement terminates for any reason, BMI may continue to provide to the applicable End Users the Rule Updates, Updates and Upgrades, as available for the original (or “initial”) term of that End User’s End User License Agreement. Upon termination, BMI will, upon notice to

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            , either: (i) terminate the End User License Agreement, or (ii) give notice to              and the End User that BMI will assume performance of all obligations under the End User License Agreement. Distributor agrees that such notice will be binding on              and              will be deemed, as of the date specified in the notice, to have assigned all its rights and benefits in and to the End User License Agreement to BMI or its agent, and the parties will work together in good faith to provide for the orderly transfer of such End Users to BMI.

34.4 Termination will be without prejudice to any accrued right or liability or to any other obligation surviving termination or to any rights or remedies of the Parties under this Agreement or at law. Upon termination or expiration of this Agreement the provisions of Sections 1, 3, 4, 5, 9, 16, 17, 18, 19.1, 19.4, 19.9, 19.12, 19.13, and all payment obligations incurred prior to the effective date of such termination or expiration will survive. All other provisions of this Agreement will terminate. In the event that this Agreement is terminated for any reason other than             ’s uncured material breach, then BMI agrees that              may continue using the Product subject to all the terms contained in this Agreement for a period not to exceed six (6) months following the termination date or until the expiration of its End User License, but in no event will such a period exceed one (1) year from the termination date (Wind-down Period). For termination due to non-renewal, the Wind-down Period will not exceed six (6) months following the termination date.             ’s obligations to BMI for the payment of Fees due will not be relieved by the effective termination of this Agreement under such circumstances. At the end of such Wind-down Period, or immediately in the case of termination due to             ’s uncured breach,              shall cause End Users to immediately cease use of the Product and either return or destroy all copies of the Product.

35. CONFIDENTIALITY.

Each Party agrees to maintain all Confidential Information of the other Party in confidence to the same extent that it protects its own similar Confidential Information (and in no event using less than a reasonable degree of care) and to use such Confidential Information only as permitted under this Agreement. The receiving Party will not provide the Confidential Information of the disclosing Party to any third party, nor may it disclose such information to any employee of the receiving Party, except for the purpose of performing this Agreement, and unless such person has entered into an agreement with the receiving Party containing confidentiality provisions covering the Confidential Information that are at least as restrictive as those set forth in this Agreement. For purposes of this Agreement “Confidential Information” will mean audio, visual, oral or physical information marked “Confidential” or could reasonably be considered of a proprietary or confidential nature, provided that for information disclosed orally, a written summary of such information is provided to the receiving Party within thirty days of initial oral disclosure; and provided that email probe addresses, information disclosed in design reviews and any pre-production releases of the Product provided by BMI will be considered Confidential Information whether or not marked as such. Each Party agrees to take all reasonable precautions to prevent any unauthorized disclosure or use of Confidential Information. The foregoing restrictions on disclosure and use will survive for three (3) years following termination of this Agreement but will not apply with respect to any Confidential Information which (i) was or becomes publicly known through no fault of the receiving Party; (ii) was rightfully known or becomes rightfully known to the receiving Party without confidential or proprietary restriction from a source other than the disclosing Party; (iii) is independently developed by the receiving Party without reference to the Confidential Information; and (iv) the receiving Party is compelled to disclose pursuant to a court order or the requirements of any stock exchange; provided that the receiving Party has given the disclosing Party reasonable notice and opportunity to contest such compulsion to disclose.

36. GENERAL PROVISIONS

19.1 Any notice or demands required or permitted by this Agreement must be in writing and must be sent personally or by facsimile, recognized commercial overnight courier, or pre-paid registered or certified mail.

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Notices will be addressed as set forth in Exhibit A attached hereto. Any Party may change its address or facsimile for the purposes hereof by written notice to the other Party. Notices will be effective (a) if delivered personally, on the date of delivery; (b) in the case of domestic mail, if transmitted by pre-paid mail, on the date falling seven (7) days after posting, provided that it will be sufficient to show that the envelope containing such notice or information was properly addressed and sent by pre-paid post and that it has not been returned to sender to prove that such notice or information has been duly sent; (c) in the case of international mail, if transmitted by prepaid registered air-mail, on the date falling fourteen (14) days after posting; provided that it will be sufficient to show that the envelope containing such notice or information was properly addressed and sent by prepaid post and that it has not been so returned to the sender to prove that such notice or information has been duly sent; and (d) if transmitted by facsimile, on the date of transmission, provided that it will be sufficient to show that the facsimile has been dispatched with the appropriate answer back code received to prove that such facsimile has been duly sent.

19.2 The waiver by either Party of a breach of or a default under any provision of this Agreement will not be construed as a waiver of any subsequent breach of the same or any other provision of this Agreement, nor will any delay or omission on the part of either Party to exercise or avail itself of any right or remedy that it has or may have hereunder operate as a waiver of any right or remedy. No amendment or modification of any provision of this Agreement will be effective unless in writing and signed by a duly authorized signatory of BMI and             .

19.3 Neither Party may assign or otherwise transfer any of its rights, obligations or licenses hereunder without the prior written consent of the other Party, which consent will not be unreasonably withheld. Any purported transfer or assignment in violation of this section will be void. Notwithstanding the foregoing, either Party may assign this Agreement without consent (i) to any entity in which the Party has a greater than 50% equity ownership interest or of which the Party has voting control, (ii) to any entity that buys 50% or more of that Party’s stock or all or substantially all of that Party’s assets, or (iii) as part of a merger, reorganization or re-incorporation; provided, however, the non-assigning party may terminate this Agreement upon thirty (30) days’ written notice within sixty (60) days following an assignment. Subject to the foregoing, the provisions of this Agreement will apply to and bind the successors and permitted assigns of the Parties.

19.4 This Agreement will be governed in all respects by the substantive laws of the State of California, United States of America (excluding conflict of laws rules) as applied to agreements entered into and to be performed entirely within the State of California between California residents, without regard to the U.N. Convention on Contracts for the International Sale of Goods. Any dispute regarding this Agreement will be subject to the non-exclusive jurisdiction of the California state courts in and for San Francisco County, California (or, if there is exclusive federal jurisdiction, the United States District Court for the Northern District of California), and the Parties agree to submit to the personal and non-exclusive jurisdiction and venue of these courts.

19.5              understands that BMI is subject to regulation by agencies of the U.S. government, including the U.S. Department of Commerce, which prohibit export or diversion of certain products and technology to certain countries. Any and all obligations of BMI to provide the Product or other materials, as well as any technical assistance, will be subject in all respects to such United States laws and regulations and will from time to time govern the license and delivery of technology and products abroad by persons subject to the jurisdiction of the United States, including the Export Administration Act of 1979, as amended, any successor legislation, and the Export Administration Regulations issued by the Department of Commerce, International Trade Administration, or Office of Export Licensing.              warrants that it will comply in all respects with any export and re-export restrictions and obtain an export license (if necessary) for the

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marketing and distribution of the Product by             . Each Party will comply with all applicable laws, rules and regulations in its performance under this Agreement.

19.6 The relationship of the Parties under this Agreement is that of independent contractors, and no agency, partnership, joint venture, or employment is created as a result of this Agreement and neither              nor its agents have any authority of any kind to bind BMI in any respect whatsoever.

19.7 The captions and section and paragraph headings used in this Agreement are inserted for convenience only and will not affect the meaning or interpretation of this Agreement.

19.8 If the application of any provision or provisions of this Agreement to any particular facts of circumstances will be held to be invalid or unenforceable by any court of competent jurisdiction, then: (a) the validity and enforceability of such provision or provisions as applied to any other particular facts or circumstances and the validity of other provisions of this Agreement will not in any way be affected or impaired thereby; and (b) such provision or provisions will be reformed without further action by the Parties, to and only to, the extent necessary to make such provision or provisions valid and enforceable when applied to such particular facts and circumstances; and, in any event, the remainder of this Agreement will remain in full force and effect.

19.9 If any exchange control or other restrictions prevent or threaten to prevent remittance to BMI of any money owed under this Agreement,              will immediately notify BMI in writing and follow BMI’s instructions in respect of the money to be paid, including if required, depositing the same with any bank or other person at such location as may be designated by BMI.

19.10 Either Party will be excused from any delay or failure in performance hereunder, except the payment of monies by              to BMI, caused by reason of any occurrence or contingency beyond its reasonable control, including but not limited to, acts of God, earthquake, labour disputes and strikes, riots, war, shortages, and governmental regulations. The obligations and rights of the Party so excused will be extended on a day-to-day basis for the period of time equal to that of the underlying cause of the delay; provided that such Party will give notice of such force majeure event to the other Party as soon as reasonably possible.

19.11 Upon the prior written approval of the Parties, the Parties will issue a joint press release announcing the relationship, and              agrees to allow BMI to use             ’s name in such release, and agrees to participate in such press release by providing favorable comments from an appropriate employee with respect to the Product. BMI agrees to allow              to use BMI’s name in such release, and agrees to participate- in such press release by providing favorable comments from an appropriate employee with respect to the Product and BMI’s relationship with             . In addition,              will be invited to participate from time to time, in its sole discretion, in any press launch event organized by BMI.

19.12 The Parties acknowledge that any breach of certain provisions of this Agreement may cause the other Party irreparable harm and significant injury to an extent that may be extremely difficult to ascertain. Accordingly, both Parties will have, in addition to any other rights and remedies available to it at law or in equity, the right to seek injunctive relief to enjoin any breach or violation of this Agreement.

19.13 The remedies under this Agreement are cumulative and not exclusive of any other rights or remedies whether provided by law or otherwise.

19.14 This Agreement, including the Exhibits attached hereto, constitutes the entire agreement between the Parties concerning the subject matter hereof and supersedes all proposals or prior agreements whether oral or written, and all communications between the Parties relating to the subject matter of this Agreement and all past courses of dealing or industry custom. The pre-printed terms and conditions on any purchase order or other written instrument submitted by either Party will have no force and effect and are hereby rejected. This

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Agreement may be executed in counterparts, each of which will be deemed an original, but all of which taken together will constitute one and the same instrument.

IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement effective as of the Effective Date.

BRIGHTMAIL, INC.
By:		By:
	Signature		Signature
Name:	Mike Irwin	Name:
Title:	VP Finance	Title:
Date:	, 2002	Date:	, 2002

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[Exhibit to Exhibit G - EXHIBIT A]

LICENSE

5. THE PRODUCT

a. Software: Anti-Spam

b. Services: Rules, Rule Updates, and support services throughout the Term of this Agreement, such Rule Updates to be automatically or, if necessary, manually provided by BMI to End Users utilizing the then in effect BMI general, tested and production grade method for rule distribution. Updates and Upgrades, if any, will be provided to             , for             ’s subsequent distribution to its End Users. If              notifies BMI, in             ’s sole discretion, that a particular End User is to be removed from Service (for non-payment or otherwise), BMI will no longer provide Rule Updates to such End User.

c. Any and all Documentation related to the Software and Services.

d. Any and all Marketing Materials and Training Materials.

6. LICENSES GRANTED TO              FOR USE ON             ’S MAIL PLATFORM.

a. Initial Term: 2 years from deployment date of the first End User License Agreement.              will provide BMI written notice of such date.

b. Territory: worldwide, except for Afghanistan, Cuba, Iran, Iraq, Libya, North Koreas, Sudan, Syria and other Embargoed countries as updated by the U.S. government, throughout the term of the Agreement.

c. Support Servers: BMI will provide              with one copy for             ’s use in accordance with Section 2.2.

d. For use on End User’s Sun Solaris operating system, only.

7. NOTICES. Below is the contact information for the Parties:

If to             : Attention: If to BMI: Attention: Daphne L. Holly 301 Howard Street, 18^th Floor San Francisco, CA 94105 Fax: 415 348-9636

Fax:

8. Relationship Managers:

For Brightmail:

415-365-

email address: @brightmail.com

For             :

email address:

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[Exhibit to Exhibit G - EXHIBIT B]

Minimum Terms and Conditions for End User License Agreements

1. Third Party Beneficiary. Brightmail, Inc. (“BMI”) shall be a direct and intended third-party beneficiary under this Agreement.

2. Intellectual Property Rights. The Software is subject to copyright laws and international copyright treaties and is the intellectual property of BMI or its licensors. End User shall not copy, reproduce, use, perform, publicly display or allow access to the Software, shall not distribute the Software, and shall not, nor shall it or permit any third party to modify, adapt, translate or prepare derivative works from the Software, or decompile, reverse engineer, disassemble or otherwise attempt to derive source code from the Software.

3. Audit.              and BMI will have the right, exercisable not more than once every twelve (12) months, to inspect upon reasonable notice and during End User’s regular business hours, End User’s relevant records to verify End User’s compliance with the terms of this Agreement and/or Distributor’s compliance with its obligations to BMI.

4. NO OTHER WARRANTIES.             , BMI, AND/OR THEIR RESPECTIVE SUPPLIERS, PROVIDE THE SOFTWARE, INCLUDING ACCOMPANYING MATERIALS, “AS IS” AND DISCLAIM ALL WARRANTIES, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AND EXPRESSLY DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE SOFTWARE, INCLUDING THE ACCOMPANYING MATERIALS.              AND BMI DO NOT WARRANT THAT THE SOFTWARE, INCLUDING ANY OF ITS DOCUMENTATION, ARE ERROR-FREE, THAT OPERATION OF THE SOFTWARE WILL BE SECURE OR UNINTERRUPTED, OR THAT THE SOFTWARE WILL MEET THE REQUIREMENTS OF END USER, AND HEREBY DISCLAIM ANY AND ALL LIABILITY ON ACCOUNT OF ANY OF THE FOREGOING. THE ABOVE LIMITATION SHALL APPLY TO THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW.

5. LIMITATION OF LIABILITY. IN NO EVENT WILL             , BMI OR THEIR RESPECTIVE LICENSORS OR SUPPLIERS BE LIABLE FOR ANY LOSS OF PROFITS, LOSS OF USE, BUSINESS INTERRUPTION, LOSS OF DATA, COST OF COVER OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND IN CONNECTION WITH OR ARISING OUT OF THE FURNISHING, PERFORMANCE OR USE OF THE SOFTWARE OR SERVICES PERFORMED HEREUNDER, WHETHER ALLEGED AS A BREACH OF CONTRACT OR TORTIOUS CONDUCT, INCLUDING NEGLIGENCE, EVEN IF             , BMI OR THEIR RESPECTIVE LICENSORS OR SUPPLIERS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN ADDITION,             , BMI AND THEIR RESPECTIVE LICENSORS AND SUPPLIERS WILL NOT BE LIABLE FOR ANY DAMAGES CAUSED BY DELAY IN DELIVERY OR FURNISHING THE SOFTWARE OR SAID SERVICES.             , BMI AND THEIR RESPECTIVE LICENSORS AND SUPPLIERS LIABILITY UNDER THIS AGREEMENT FOR DIRECT, INDIRECT, SPECIAL, INCIDENTAL AND/OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, RESTITUTION, WILL NOT, IN ANY EVENT, EXCEED THE FEE PAID BY END USER TO DISTRIBUTOR UNDER THIS AGREEMENT.

6. End User Agreements. Require, or have required, by contract, that each End User agree to terms, that are no less restrictive than the End User Agreement (“EUA”), which can be found at

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http://www.brightmail.com/end_user_agreement.html. Notwithstanding anything contained herein to the contrary, End User will indemnify, defend, and hold BMI harmless from and against any and all claims, losses and liabilities (including reasonable and incurred attorneys’ fees) arising from or otherwise due to a breach or alleged breach by End User of this Section.

7. Probes. Provide BMI, with *, all of which are found on *. The following apply to End User Probes:

i) End User agrees to provide * of all * found on * and * or *, whichever is greater, for BMI’s use in detecting content-related risks and for use in BMI’s internal research and development efforts.

ii) BMI will receive the End User Probes from End User within * of the Effective Date of the agreement between End User and             .

iii)             , End User and BMI will consider the End User Probes Confidential Information, notwithstanding anything contained herein to the contrary. The Parties’ obligations of confidentiality pertaining to the End User Probes will remain in effect for a period of * after the termination date of this Agreement. End User may not themselves, or through a third party, use the End User Probes for any purpose without the express written consent of BMI.

8. End User specifically warrants that it will not process Spam in such a way as to negatively impact the Product, as determined by BMI in its sole discretion. Specifically, End User agrees that if it chooses to delete Spam instead of offering its Customers BMI’s Gray Mail Service, End User will not send any error-type messages to the senders of the Spam, notifying them that the Spam did not reach Customer(s), or otherwise alerting the sender of Spam to the presence of the Product. In addition, End User also agrees to defend, indemnify, and hold BMI harmless from any third-party suit (including suits brought by Customers) if End User deletes Spam without giving its Customer(s) a reasonable chance to review the Spam.

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[Exhibit to Exhibit G – EXHIBIT D PRODUCT SUPPORT]

1.              shall be responsible for taking first call from End Users (“First Line Support”) and shall not refer any End User callers to Brightmail. Brightmail shall be responsible for providing back up technical support (“Second Line Support”) to             . Support/maintenance shall start upon product acceptance by the End User. Support/maintenance fees shall be payable to Brightmail if and only if the End User contracts for support from             . Brightmail’s support/maintenance fees for Second Line Support to              are set forth in Exhibit B.

2. The parties agree to use the following procedure to resolve support/maintenance problems with respect to the Product:

2.1              will first attempt to isolate the source and nature of the problem using resources reasonably at its disposal. If investigation indicates the problem may be caused by a fault in the Product,              will collect pertinent information necessary for resolution, and use commercially reasonable efforts to resolve the problem. If              can not resolve the problem, it will collect the pertinent information that may assist and expedite resolution, and then report the problem and information by telephone or in writing (email accepted) to Brightmail as set forth herein.

2.2 Brightmail and              shall reasonably and in good faith assign a priority to the problem. Brightmail shall use commercially reasonable efforts in responding to the problem with a Product workaround or patch, closing the problem with a Product update or upgrade, and reporting status, as follows:

Priority	Log Call	Response Time	Closure Time	Status Report
		(Work Around)	(Product Fix)
Critical	2 Hours	Two (2) Business Days	Ten (10) Business Days	Weekly, Daily for escalated sites
Non-Critical	24 Hours	Eight (8) Business Days	First Major or Minor At Product Release after                     ’s the next Thirty (30) request Business Days

It is recognized by              (2) Business Days that such level of effort will not always result in a problem’s resolution according to the above timetable. For the purpose of this paragraph: “Critical” shall mean use of the Product is severely impacted or stopped; “Non-Critical” shall mean use of the Product is ongoing; and “Business Day” shall mean a day during which Brightmail conducts its regularly scheduled business operations, excluding holidays observed by Brightmail.

CONFIDENTIAL TREATMENT REQUESTED

2.3. Brightmail will provide the following Product support/maintenance services to              at no additional charge to fees stated in Exhibit B:

2.3.1 Access to Brightmail’s technical support personnel for problem resolution. Said personnel shall be available for telephone contact Monday – Friday, 8 a.m. to 5 p.m. PST time, on normal business days. Brightmail shall also make available, on a twenty-four (24) hour three-hundred-sixty-five (365) days per year basis, a means of reporting errors or failures in the Product, by electronic mail, or voice mail;

2.3.2 The right to use the software for support/maintenance purposes at no charge. Brightmail shall provide one (1) copy of each Product purchased and or licensed by              and              may copy such Product, object code only, but only for the purpose of providing End User support/maintenance;

2.3.3 One (1) copy of the user manuals and/or Product documentation made generally available to other resellers or End-Users for all Product purchased and or licensed by             ,              may copy such Product documentation, but only for the purpose of providing End User support/maintenance;

2.3.4 One (1) copy of all available or released support documentation (e.g., technical bulletins and data sheets) made generally available to other resellers or End-Users for all Product purchased and or licensed by             ,              may copy such support documentation, but only for the purpose of providing End User support/maintenance;

2.3.5 Access to any electronic technical bulletin board or “web page” containing the above information;

2.3.6 One (1) copy of all Product workarounds, patches and corrections and/or access to the same through an electronic means and the right to distribute to End-Users which              has under a current support/maintenance contract;

2.3.7 One (1) copy of all updates/upgrades and/or access to same through an electronic means and the right to distribute to End-Users which              has under a current support/maintenance contract; and

2.3.8 Support of the current release/version of the Product, and support of one (1) release/version back, for a period not to exceed 12 months from the date of the release of the current release/version. For example, the current release upon signing of the Agreement is release 3.0. Brightmail’s obligation of Support will not be for any versions earlier than 2.1.

2.4 Brightmail’s obligations to provide service and resolve problems under this section shall extend only to such problems duly reported by              and which Brightmail, using reasonable efforts, is able to duplicate.

2.5 Brightmail agrees to give              one-hundred-twenty (120) days prior notice of Product discontinuance. Brightmail will support products obsoleted for a period of one (1) year after Product discontinuance.

-2-

EX-10.10.1

EXHIBIT 10.10.1

CONFIDENTIAL TREATMENT REQUESTED

AMENDMENT ONE TO

AMENDED AND RESTATED SYMANTEC SERVICE PROVIDER AGREEMENT

This Amendment One to the Amended and Restated Symantec Service Provider Agreement (the “Amendment One”), dated August 25, 2003 (the “Amendment One Effective Date”), is entered into between Brightmail Incorporation (“BMI”) and Symantec Corporation and Symantec Limited (collectively and individually “Symantec”). This Amendment One amends the Amended and Restated Symantec Service Provider Agreement (the “Amended Agreement”), with an Amended date of March 28, 2003, between the Parties (the Amended Agreement as further amended by Amendment One, the “Agreement”). All capitalized terms not defined herein shall have their respective meanings as set forth in the Agreement.

WHEREAS, the parties deem it desirable to, among other things, further expand the scope of the license to allow BMI to sublicense the Licensed Product to all Enterprises, and to modify certain contractual requirements to simplify the process under which BMI may sublicense the Licensed Product to Enterprises;

NOW THEREFORE, in accordance with Section 11 (a) of the Agreement, the parties agree to amend the Amended Agreement as follows:

1. The following defined terms shall be deleted in their entirety and the following substituted in lieu thereof:

“Affiliate(s)” shall mean any wholly owned, meaning one hundred percent (100%) stock ownership, subsidiary of an Authorized Sublicensee. Brightmail covenants that it will enforce on Symantec’s behalf, the terms of this Agreement as to all Affiliates under Existing Business agreements that Brightmail has in place on the Effective Date of this Agreement that do not meet this definition. All renewals or extensions of Existing Business agreements and all New Business must comply with this definition. For purposes of Enterprise, an Affiliate shall mean (a) any subsidiaries in which such Enterprise owns greater than fifty percent (50%) of such entity, and (b) joint ventures in which any Enterprise or an Enterprise subsidiary or affiliate holds an interest greater than fifty percent (50%) of such entity provided in all cases that the Enterprise shall have agreed under the terms of the Enterprise Agreement to guarantee the performance of the obligations of its Affiliates and enforce compliance with such obligations on Symantec’s behalf.

“Authorized Users” means and is calculated as follows: (A) for all New Business and Internal Users, each and every (i) unique consumer, (ii) home office at a residential address, (iii) each Internal User of an Authorized Sublicensee, per the license grant set forth in Section III (2)(vi), and (iv) each internal mailbox of an Enterprise, wherein in each of the foregoing, the Authorized User is either counted as an unique mailbox being scanned and protected using the Licensed Product, or as an email address, or per Authorized User or an account that is subscribing to, the Licensed Product, which is active at any time during the Term, and which is clearly indicated in the reporting to Symantec, and (B) for all Existing Business, each and every unique e-mail box being scanned and protected using the Licensed Product, or as an email address, or individually each person who is an authorized user, or an account that is subscribing to, the Licensed Product, which is active at any time during the Term or as determined by an alternative definition which was approved in writing by Symantec prior to the Effective Date and specifically detailed on Exhibit B, and (C) for Enterprise, each and every unique e-mail box being scanned and protected using the Licensed Product or individually each person who is an authorized user of the Enterprise.

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“Enterprise” means individually and collectively those legal entities which are commercial businesses, other than ISPs, ASP and wireless operators, that would use the Licensed Product for its own internal use only, in conjunction with that entity’s internal business needs, other than Sun Microsystems. The term “Enterprises” shall include their Affiliates.

“Existing Business” means (i) all Authorized Sublicensees that provide the Licensed Product to Authorized Users or (ii) all Enterprises, which were counted and defined as “Mailboxes” or “End User” under an agreement pursuant to the Prior Agreement and existing prior to the Effective Date, to receive the BMI Services.

“New Enterprise Business” means and includes (i) all Enterprises that will provide the Licensed Product to their Authorized Users under an agreement with Brightmail or Reseller that is entered into on or after the date of this Amendment One and at anytime prior to April 1, 2004 (the “New Enterprise Business Period”), provided that the New Enterprise Business Period may be extended upon mutual agreement in writing between Symantec and Brightmail (the “New Enterprise Business Amendment”) in which case the New Enterprise Business Period shall continue until such time as agreed in the New Enterprise Business Amendment (such agreement between the Enterprises and Brightmail or its Resellers, the “New Enterprise Business Agreements”), and (ii) all renewals, amendments that extend the time period of the New Enterprise Business Agreements.

2. Section III.2 of the Agreement is amended as of the Amendment One Effective Date as follows:

(a) Subsection (iv) of the first sentence in Section III.2 is hereby modified to read as follows:

“(iv) directly or through Resellers, (1) allow Authorized Sublicensees to upload the Licensed Product, in executable form only, onto its own servers to provide the Service, (2) allow Enterprises that are Existing Business to upload the Licensed Product in executable form only, onto its own servers to receive the BMI Services, and (3) allow all Enterprises and their Authorized Users that are New Enterprise Business to upload the Licensed Product, in executable form only, onto its own servers for its own internal use,”

(b) The last sentence of Section III. 2 is hereby modified and replaced in its entirety to read as follows:

“The foregoing shall only be distributed through a Reseller if the following conditions precedent are met: (i) the Reseller and Brightmail have executed a reseller agreement in a form substantially the same as the one attached hereto as Exhibit G (the “Reseller Agreement”) with Brightmail, (ii) Brightmail has contractually obligated the Reseller to comply with the terms of this Agreement through the agreed upon terms of the Reseller Agreement as they are applicable, in regards to all sales of BMI Product which incorporate the Licensed Product, (iii) Brightmail names Symantec as a third party beneficiary in the Reseller Agreement, and (iv) Brightmail hereby covenants and warrants to Symantec that it will enforce the terms of the Reseller Agreement on Symantec’s behalf as to such Reseller.

(c) The following provision shall be added to the end of Section III.2 as of the Amendment One Effective Date:

“Notwithstanding the foregoing, any Enterprise permitted to receive the BMI Services under the Agreement shall have the right to outsource the management of its information technology and provide access to the Licensed Products to a third party who will provide managed services or information technology and related services for such Enterprise (“Managed Service Provider”), so

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long as (i) such Enterprise agrees to continue to comply with the agreement between such Enterprise and Brightmail (“Enterprise Agreement”), which is substantially in the form attached hereto as Exhibit H, (ii) such Enterprise obtains the Managed Service Provider’s written and signed agreement to comply with the terms of such agreement, and (iii) the Managed Service Provider will only have the rights to use the Licensed Products on the Enterprises’ behalf, as those rights were granted to such Enterprise.”

3. Section III(4) shall be modified to apply fully to all Enterprise permitted to receive the BMI Services under the Agreement and such requirements shall be applied to the Enterprise through the Enterprise Agreement, which is substantially in the form attached hereto as Exhibit H. Further the Parties acknowledge that Brightmail only will host downloads of the Licensed Product for distribution to Authorized Sublicensees or Entities and no Reseller shall do so to any third parties without complying with the provisions concerning hosting downloads, as set forth herein. Symantec may, in its sole discretion, separately certify Resellers on Brightmail’s behalf, to host the download pursuant to a separate signed amendment.

4. Notwithstanding anything contained in the Agreement to the contrary, as of the Amendment One Effective Date:

(i) Brightmail shall require each and every Enterprise permitted to receive the BMI Services under the Agreement to comply with the terms of the Enterprise Agreement, which is substantially in the form attached hereto as Exhibit H, and shall enforce the terms thereof on Symantec’s behalf as a third party beneficiary. The Enterprise Agreement will acknowledge that Brightmail shall enforce the rights therein on behalf of its Licensors, which both Parties agree includes Symantec. The Enterprise Agreement shall require the Enterprise to agree under the terms of the Enterprise Agreement to guarantee the performance of the obligations of its Affiliates and enforce compliance with such obligations on Symantec’s behalf.

(ii) Section X(6)(d)(iv) shall apply equally to Enterprises permitted to receive the BMI Services under the Agreement and all references to Authorized Sublicensees and Resellers, provided further that (i) instead of the stated time period in this Section, the right to use by such Enterprise will continue for the entire term of the underlying Enterprise Agreement, provided that the Enterprise is in full compliance with all terms of the protective provisions of the Enterprise Agreement, and (ii) the conditions set forth in subsections (i) and (ii) of the current Agreement shall not be applicable to such Enterprises, and (iii) Brightmail has reported to Symantec the remaining Enterprise Agreements in place, the expiration dates of Enterprise Agreements and the name of each Enterprise for Symantec’s tracking and reconciliation purposes, and (iv) Brightmail shall not renew or extend the term of the Enterprise Agreements with respect to the Licensed Product under the terms of this Agreement. Brightmail agrees that it will not distribute the substituted anti-virus product described in the Enterprise Agreement to Enterprise during the Term of this Agreement.

(iii) All licenses and authorizations to Enterprises provided by Brightmail under the terms of the Agreement may be obtained pursuant to a click-through agreement so long as the Enterprise is required to take an affirmative act of consent to the terms of such click-through agreement by clicking a button to initiate installation only after an opportunity to view the applicable terms and conditions, which are substantially in the form of the attached Enterprise Agreement and which Brightmail is required to track in order to enforce and to report to Symantec, which entities have valid agreements in place with Brightmail. Brightmail shall enforce those foregoing agreements on Symantec’s behalf as a third party beneficiary.

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(iv) With respect to Enterprises permitted to receive the BMI Services under the Agreement, Brightmail shall be obligated to update and incorporate in each quarterly report required to be submitted pursuant to the Agreement, including, without limitation, the Enterprise’s corporate name and all the required information set forth in Section V.2, such Authorized Users and other information as reported by Enterprises in accordance with the applicable Enterprise Agreement for each new Enterprise Agreement entered into by Brightmail in such quarter, as well as any increases in the number of Authorized Users for each Enterprise during the term of such applicable Enterprise Agreement as reported by such Enterprise in accordance with the applicable Enterprise Agreement.

5. The pricing set forth in Section 1.2. of Exhibit A shall not apply to Enterprises that are New Enterprise Business. The Price for each Enterprise that is part of the New Enterprise Business shall equal $* per Authorized User per year. The price per Enterprise that is New Enterprise Business is based on the total number of Authorized Users (also referred to as “End Users” under the Enterprise Agreement) on a per Enterprise basis. For example, if an Enterprise that is New Enterprise Business has 30,000 Authorized Users, Brightmail would pay Symantec $* per year ($*/End User per year).

6. General Provisions. Except as expressly amended by this Amendment One, this Agreement is in all respects ratified, confirmed and approved and all the terms, provisions and conditions set forth in the Amended Agreement, which are not specifically modified by Amendment One shall be and remain in full force and effect. The failure of either party to enforce at any time or for any period of time any provision of the Agreement (as amended by Amendment One) shall not be construed as a waiver of such provision or of the right of such party thereafter to enforce such provision. In the event of any conflict between the meaning of the terms and conditions of the Amended Agreement and Amendment One, the terms and conditions set forth in Amendment One shall govern.

7. Counterparts. This Amendment One may be executed in any number of counterparts, each of which when so executed will be deemed an original, and all of which together, shall constitute one and the same agreement.

WITNESS the due execution hereof by authorized representatives of the parties identified below.

BRIGHTMAIL INCORPORATED
By:	/s/ Enrique T. Salem
Name:	Enrique T. Salem
Title:	Enrique T. Salem
Date:	August 26, 2003

SYMANTEC CORPORATION		SYMANTEC LIMITED
By:	/s/ Dieter Glisbrecht	By:	/s/ Dieter Glisbrecht
Name:	Dieter Glisbrecht	Name:	Dieter Glisbrecht
Title:	SVP, WW Sales & Prof Services	Title:	SVP, WW Sales & Prof Services
Date:	August 25, 2003	Date:	August 25, 2003

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EXHIBIT G

RESELLER AGREEMENT.

RESELLER AGREEMENT

This Reseller Agreement is entered into on              (“Effective Date”) by and between Brightmail Incorporated, a California corporation (“BMI” or “Brightmail”) with principal offices at 301 Howard Street, Suite 1800, San Francisco, CA 94105 and,             , a             corporation (“Reseller”), with principal offices at BMI and Reseller will collectively be referred to as the “Parties” and each of them will be a “Party”.

WHEREAS, Brightmail Incorporated (“BMI”) develops and licenses client/server software, and provides software related services, including but not limited to, software and services that reduce Spam and/or virus;

WHEREAS, Reseller wishes to obtain from BMI the non-exclusive right to market and resell certain BMI products and services to its customers directly, and BMI agrees to appoint Reseller for such purposes subject to the terms and conditions of this Agreement.

NOW THEREFORE, in consideration of the mutual covenants contained herein, the Parties agree to the following terms and conditions, which set forth the rights, duties and obligations of the Parties:

1. DEFINITIONS

1.1 “Agreement” is this Reseller Agreement entered into by the Parties, together with all and any Exhibits attached hereto and made a part hereof, and all and any amendments or modifications made hereto pursuant to mutual written and executed agreement of the Parties.

1.2 “BMI Trademarks” are the trademarks, logos and trade names of BMI or its superior licensors which may be registered or unregistered and include, but are not limited to, those BMI Trademarks set forth at http://www.brightmail.com/trademark.html.

1.3 “Corporation (s) or Enterprise (s)” is the enterprise or corporate customer, only, which upon executing a Subscription Agreement obtains a license for the Software and Services for its own internal use with Internet services or online application services for the benefit of its End Users. A Corporation or Enterprise will not include ISPs, ASPS, or other entities that procure Services for commercial use or for use for the benefit of its employees, agents, and contractors.

1.4 “Documentation” is BMI’s standard system administrator documentation that outlines the system architecture and its interfaces of the Product, including comprehensive guides on installation and operations.

1.5 “End User (s)” is the employee, contractor, sub-contractor, or other agent of Corporation that receives the benefit of the Product through the corporate email services; i.e., the total number of Mailboxes, or email addresses, accordingly, existing on the corporate email system.

1.6 “IP Rights” means all BMI and/or its superior licensors’ intellectual property rights in the Software, the Documentation, Marketing Materials, Training Materials and all other materials provided by BMI to Reseller during the Term (as defined below) and BMI Trademarks, and/or which are derived or arise from the Services, including, without limitation, copyrights, database rights, inventions, patents, trade marks, service marks, trade names, moral rights, mask words, trade secrets, goodwill, confidential and proprietary information, compositions and formula, whether created in the United States of America or elsewhere, and all applications for registration and registrations of such rights.

1.7 “Mailbox (es)” is an area in memory in a storage device where email is placed and/or stored, i.e., an email address. An individual End User may have use of one or many Mailboxes.

1.8 “Marketing Materials” are sales and marketing collateral including but not limited to: sales presentations, datasheets, white papers, press releases, industry articles, benchmark test reports, competitive evaluations, and customer testimonials.

1.9 “Product” or the “Brightmail^® Anti-Spam Solution” comprises the Software, including Updates and Upgrades thereto, if any, the Services, and the Documentation, as more fully described in Exhibit C, attached hereto and made a part hereof.

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1.10 “Product Support” means support for the Product and Services which will be made available to Corporations as set forth in Exhibit D, as such may be modified from time to time by BMI within its sole discretion.

1.11 “Resell,” “Resale” and/or “Sell” means the non-transferable, non-exclusive right to market, and sell licenses to the Software and Services and Product Support to a Corporation. All Software, Product Support and Services sold to the Corporation will be pursuant to a Subscription Agreement. No license is granted for any use for which Reseller has not paid Brightmail in accordance with Exhibit C.

1.12 “Rule(s)” are explicit, conditional statements, or criteria, that are created and used by BMI to detect and filter Spam (as defined below), and are made available by BMI directly to Corporations solely as part of the Services.

1.13 “Rule Update(s)” are modifications and revisions to the Rules made available by BMI to Corporations as part of the Services.

1.14 “Server(s)” are a combination of Software, hardware, processes and functions and that are collectively used to filter the incoming mail of End Users. Servers are set up to divert, reject, or discard Spam.

1.15 “Service(s)” are the provision by BMI of its email analysis and filtering system, which services include the creation of Rules and Rule Updates, Updates (as defined below) and Upgrades (as defined below), all of which are used to detect Spam.

1.16 “Software” is (i) BMI’s proprietary inbound email-filtering software product (a) to reduce Spam (“AS Product”) and/or (b) to reduce Virus (“AV Product”) as more fully described in Exhibit C, (ii) any third party software products which may be integrated with BMI’s email-filtering software product, (iii) Updates and Upgrades, and (iv) Documentation.

1.17 “Subscription Agreement” is the license and services agreement between the Corporation and Reseller that governs the Corporation’s rights and restrictions in use of the Product and in receiving the benefit of the Services, and that contains the terms and conditions detailed in the attached Exhibit B.

1.18 “Territory” means the United States.

1.19 “Training Materials” means informational materials, including but not limited to summary Product and Service information, frequently asked questions and responses, architectural and functionality descriptions and diagrams, etc., and other information included in BMI’s training materials for its training classes.

1.20 “Updates” are minor updates of, or error corrections and bug fixes to the Software that do not add significant new functions to the Software, and that are released by BMI, in its sole discretion. Updates are designated by an increase to the Software’s release number to the right of the decimal point (e.g., Software 1.0 to Software 1.1). The term Updates specifically excludes Upgrades and excludes any software marketed and licensed by BMI as a separate product.

1.21 “Upgrade(s)” are any major revisions to the Software, which adds significant new functionality, if and when released by BMI, in its sole discretion. Upgrades are designated by an increase in the Software’s release number, located to the left of the decimal point (e.g., Product 1.x to Product 2.0). The term Upgrade specifically excludes any software marketed and licensed by BMI as a separate product.

2. APPOINTMENT; GRANT OF RIGHTS

2.1 Subject to the terms and conditions contained in this Agreement, BMI hereby appoints Reseller as an authorized reseller of the Product and Reseller hereby accepts such appointment. Subject to the terms and conditions of this Agreement, BMI grants to Reseller for the duration of the Term (as defined below), a non-exclusive, revocable, royalty-bearing, license (“License”) to market and resell the Product and Product Support to Corporations within the Territory in accordance with the terms and conditions of this Agreement. Reseller will market and resell the Product and Product Support directly to Corporations, and not through another reseller, or other third parties. Reseller may not transfer, license or sublicense such distribution rights. Reseller represents and warrants that the Product licensed under this Agreement is licensed on its behalf as a reseller only.

2.2 Reseller shall determine the price at which it resells the Products and Product Support to Corporations at its sole and entire discretion.

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2.3 In connection with Reseller’s resell of the Products to Corporations, BMI will be solely responsible for the delivery of the Software and Services to Corporations, directly, and BMI agrees to provide the Services in accordance with the same policies and procedures that it uses to provide the Services to its own direct customers and licensees. Reseller will have no right or license to distribute, display or otherwise make available the Rules or Rule Updates.

2.4 Upon the request of Reseller, BMI will deliver to Reseller one (1) master copy of the Software in machine executable object code format together with BMI’s labeling and Documentation artwork data files, in electronic format. Subject to the terms and conditions of this Agreement, BMI grants to Reseller a non-exclusive, non-transferable, royalty-free right and license to copy the Software in machine executable object code format only and to copy the Documentation, each for Corporation’s use in a test and evaluation environment only. Reseller shall not incur any liability or assume any obligations on behalf of BMI or in any way bind BMI.

2.5 Reseller may describe itself as an authorized reseller for the Product in the Territory, but will not hold itself out as an agent, representative, partner or joint venture partner of BMI or being in any other way connected with BMI. Reseller will at all times be an independent contractor.

2.6 Each party will appoint a representative as a relationship manager who will be the primary contact for implementing and administering the terms and conditions of this Agreement (“Relationship Managers”). The Relationship Managers will be those people set forth on Exhibit A, and will meet, either in person or via teleconference at least monthly and at mutually agreeable times to review and coordinate sales efforts, review Reseller’s marketing/sales strategies, review the Corporation’s response to the Services and address other topics related to the successful support of the Products. All costs relating to such Relationship Managers and the meetings shall be borne by the party who incurred them.

3. RESTRICTIONS

3.1 Except as specifically provided for in this Agreement, Reseller will not use, apply or otherwise deal with the Product for any purpose other than the purpose set out in Section 2.1 of this Agreement. Reseller will not decompile, modify, adapt, translate, distribute, duplicate, copy, transfer possession of, loan, lease, or reverse engineer, disassemble, reconstruct, tamper with or otherwise determine, or attempt to derive, reconstruct or discover the source code for the Product or any part thereof, or modify or create or attempt to create any derivative works from or based on the Product, nor will Reseller authorize, permit, or assist any Corporation or anyone else to do so. Reseller will not, and will not authorize, permit, or assist any Corporation to determine or attempt to determine the Rules or Rules Update(s) used by the Software under any circumstances whatsoever. Reseller will not host the Software for download by any third parties,

3.2 Reseller will require that use of the Product by Corporations will be in accordance with the Documentation or any other operation or user instructions or manuals furnished by BMI or its licensors, and in accordance with any other reasonable requirements of BMI.

4. PROPRIETARY RIGHTS

4.1. Ownership of all rights, title and interest in the Product (including but not limited to copies of the Product contained in any storage media) the Marketing Materials, Training Materials and any other materials provided by BMI to Reseller including, without limitation, the IP Rights, will at all times remain the absolute and exclusive property of BMI and/or its superior licensors, as the case may be. Except as expressly granted herein, Reseller is granted no rights to create derivative works of the Product, or to distribute the Product to third parties. In the event that notwithstanding the above, Reseller has or acquires any such said rights, title or interest, Reseller will be deemed to have irrevocably assigned and transferred the same to BMI or its superior licensors as applicable free from any requirement on the part of BMI or its superior licensors to pay any fees. Further and if required by BMI or its superior licensors at BMI’s or its superior licensor’s cost, Reseller will execute and deliver to BMI or its superior licensors as applicable all relevant documents of assignment and transfer in respect of the said rights, title or interest, and the documents will be in such form as may be required by BMI or its superior licensors.

4.2 Reseller, its officers, employees, servants and agents will not remove, alter, obscure, conceal or otherwise interfere with any BMI Trademarks, or other IP Rights in the Product, appearing on or in copies of the Product or on the Software or other materials delivered to Reseller by BMI. In connection with the resale of the Product, Reseller will use those notices, legends, symbols or labels in connection with the Product in the same manner as they appear on or in the Product.

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5. NO OTHER RIGHTS. Except as expressly provided herein, no right (including the IP Rights), title or interest in any Product is granted by BMI or its superior licensors to Reseller, and all such right, title and interest is reserved and retained by BMI and its superior licensors. Without limiting the foregoing, BMI and its superior licensors reserve the right to use, distribute, sell, resell, apply, import, export, make, have made, use, copy, modify, have modified, create derivative works of, have created derivative works of, demonstrate, maintain, support or otherwise exploit the Product in any part of the world (including the Territory), and the right to license the foregoing rights.

6. SCOPE OF SERVICES; ORDERS AND DELIVERY; TRAINING

6.1 All licenses for the Product and sale of Product Support services between Reseller and the Corporation must be pursuant a formal agreement, that complies with the terms and conditions of a subscription agreement in the form no less protective of BMI than the subscription agreement attached hereto as Exhibit B (“Subscription Agreement”), as modified from time to time by BMI within its sole discretion, and which shall provide that BMI is a third party beneficiary of the Subscription Agreement with full rights to enforce such Subscription Agreement as if BMI were a party to such Subscription Agreement (such terms and conditions, “Minimum Terms”). Each Corporation must agree in writing to all the Minimum Terms in a Subscription Agreement or through a shrink-wrap agreement containing the Minimum Terms so long as the Corporation is required to take an affirmative act of consent to the terms of such shrink-wrap agreement by clicking a button to initiate installation only after an opportunity to view the applicable terms and conditions. Reseller agrees to provide BMI with a copy of any such Subscription Agreement used in the distribution of the Product, Product Support and Services. Reseller shall diligently enforce such Subscription Agreement and use its best efforts to ensure that Corporations abide by the terms of the applicable Subscription Agreement. Reseller shall promptly notify BMI of any violations by a Corporation of its Subscription Agreement of which Reseller is aware and shall further notify BMI with respect to the steps Reseller has taken and is planning to take to stop such violations. Reseller will submit a purchase order (“Order”), together with the purchase order submitted by a Corporation to Reseller for the Product or Product Support as well as the applicable Subscription Agreement (“Corporation Order”), to BMI in writing or via email for the Software and Product Support to be provided to each Corporation pursuant to one or more Subscription Agreements. The Order shall be issued upon execution of a Subscription Agreement. All Orders and Corporation Orders shall contain the items listed in Exhibit E of this Agreement.

Unless otherwise noted, BMI shall use such Order as evidence that the Corporation is properly configured, and BMI shall deliver the Software and commence the provision of Services as promptly as commercially reasonable after the receipt of the Order. Reseller shall notify BMI promptly in writing with respect to any: (i) termination or expiration of a Subscription Agreement; and (ii) any other relevant change in Service description.

6.2 Reseller will provide an annual report, verifying and updating the information contained in the Order for each Corporation, including the then current numbers of End Users per Corporation as of each anniversary of the Effective Date, and the current location of the Software, and Reseller will provide a report detailing the foregoing information within five (5) days after the end of any quarter in which there is an increase in the number of End Users as reported by each Corporation in accordance with the Subscription Agreement (“Product Report”). The Product Report will be due within five (5) calendar days of each anniversary of the Effective Date. BMI will generate an invoice for any increases in the number of End Users provided within the Product Report at the applicable fee rate.

6.3 Reseller and BMI mutually agree to work in good faith to reduce channel conflict.

6.4 BMI will make available the following to Reseller in respect of the Product:

6.4.1 Documentation and other written information and data, if any, for the installation, use and application of the Product by Reseller and/or Corporations (as applicable) in either printed or machine-readable form as BMI may in its sole discretion elect.

6.4.2 A reasonable quantity of Marketing Materials and Training Materials to the respective appropriate Reseller contacts in the English Language in electronic or other mutually agreeable format, as available or upon material update, change or enhancement (particularly with respect to any Updates or Upgrades). It is anticipated that Reseller will integrate the Training Materials supplied by BMI into Reseller’s training curriculum. Reseller may not modify any Marketing Materials or Training Materials without BMI’s prior written consent.

6.4.3 In connection with the commencement of this Agreement, the one-time training of a number of suitably qualified employees of Reseller in the marketing and promotion, and the installation, use and application of the Product, and the rendering of training and support services to Corporations as described in Exhibit D of this

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Agreement, as may be required by Reseller. Such training (“Training”) will be undertaken by BMI at the premises of BMI unless otherwise agreed by the Parties. If the Training is at a location other than the premises of BMI, Reseller will be responsible for all expenses that may be incurred by the employees of BMI in attending the Training, including airfare, ground travel expenses, accommodation and meals, and telecommunication expenses.

6.5 If Reseller requires further and additional assistance or instructions beyond any time frame or time limit or number of personnel allocated for purposes of Section 6 of this Agreement, or requires further and additional assistance or instructions from time to time during this Agreement on any matter relating to the Product that are not expressly included in Section 6.4 of this Agreement, BMI may provide such assistance or instructions in such manner and by such means as BMI deems appropriate, provided that BMI has the capacity and available resources to provide such assistance or instructions, and provided further that Reseller will pay BMI’s then-current fees for such services upon completion of the effort. BMI will provide a written quotation of the deliverable and the then-current fees and Reseller will provide written acceptance, prior to the start of any services rendered under the scope of Section 6.5.

7. DUTIES OF RESELLER

7.1 Reseller will at all times during the Term observe and perform the terms and conditions set out in this Agreement;

7.1.1 devote its reasonable commercial efforts to promoting and marketing the Product in the Territory;

7.1.2 conduct its business in a responsible and ethical manner in the Territory and in accordance with all applicable laws, regulations and rules of the Territory, and not do or permit to be done anything that may bring BMI, the Product, the BMI Trademarks and/or the IP Rights into disrepute;

7.1.3 promptly bring to the attention of BMI any complaints it may receive regarding the Product;

7.1.4 not make or give any warranties, guarantees, representations or other commitments in relation to the Product or Services, other than as provided by BMI in writing (including in any Marketing Materials provided by BMI and specified in the Documentation) or approved by BMI in writing;

7.1.5. promptly and diligently follow up on all Corporations’ inquiries referred to it by BMI;

7.1.6 maintain adequate staff trained in and able to fulfill the marketing, Reseller and support needs as required under this Agreement;

7.1.7 promote BMI as Reseller’s Preferred Provider for a Spam filtering service. As a “Preferred Provider,” Reseller agrees that: (i) when a Reseller customer requests a provider for Spam filtering products, it will promote BMI as a Reseller preferred Spam filtering product/service provider; and (ii) Reseller will refer to BMI as its preferred Spam filtering product/service provider in its public announcements regarding the relationship contemplated by this Agreement,

7.1.8 make each Corporation aware of the importance of providing BMI with email accounts * by BMI as probe accounts (“Probes”) in connection with BMI’s provision of the Services and to use reasonable commercial efforts to obtain and provide BMI with a list of the Probes for each Corporation prior to the first distribution of a Rule.

7.1.9 be responsible for providing all first-line technical support directly to Corporations and End Users with respect to the Product, including on-going technical support, training, upgrades, maintenance, consultations and other support services and assistance relating to the Product. Any direct request to BMI for support services by any Corporations or End Users will be referred to Reseller.

8. FEES AND PAYMENTS

8.1 Reseller will pay to BMI the fees referred to in Exhibit C for the Product and if applicable, Product Support for each Corporation reported under the Order or Product Report submitted by Reseller with respect to each Product and if applicable, Product Support (collectively, “Fees”) as more fully described in Exhibit C. All Fees are exclusive of all taxes, duties or levies, however they are designated or computed. Reseller shall be responsible for, and pay all taxes based on payments due under this Agreement including, but not limited to, sales, use, or value-added taxes, duties, withholding taxes and other assessments now or hereafter imposed. Price changes for the Product and Product Support (collectively, the “Price”) shall be effective immediately and applicable to all Orders submitted prior to its acceptance by BMI. Reseller understands and agrees that the Price shall be the price in effect at the time of shipment of Products to the Corporation.

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The Discount as described in Exhibit C shall be Reseller’s sole remuneration from BMI for the distribution and sale of Products and Product Support. BMI will invoice Reseller for total Fees and payments after the receipt of each Order or Product Report as described in Sections 6.1 and 8.5 of this Agreement. All Fees for the Product and Product Support, if applicable, are non-refundable. Fees will equal at a minimum the product of (i) the total number of End Users and (ii) the annual fee per End User for each Corporation, all in accordance with Exhibit C and section 6 of this Agreement.

8.2 All invoice, Orders, Product Reports and payments to be made by Reseller to BMI under this Agreement will be payable in US Dollars.

8.3 All amounts owed by Reseller to BMI under this Agreement will be paid in full within thirty (30) calendar days after the date of invoice without any deduction or withholding (whether in respect of set off, defense, deferment, counterclaim, duties, taxes including turnover tax, value added tax, goods and services tax, withholding tax, government charges or legal dues and otherwise whatsoever).

8.4 All amounts not paid when due under this Agreement will accrue interest at the lesser of one and one half percent (1.5%) per month or the maximum rate permitted under applicable law.

8.5 Reseller will maintain complete, proper, accurate and up-to-date records (“Relevant Records”) of all sales of the Product and of the details of all Corporations, including contracts, accounts and support logs regarding: (a) the use of Product by Corporations, by month, and (b) Reseller’s compliance with the terms of this Agreement. Reseller will keep all Relevant Records. BMI will have the right to audit (“Audit”) all such records no more than once per twelve (12) month period throughout the term of this Agreement, to confirm the accuracy of the number of End Users reported to BMI, and compliance with any other terms and conditions of this Agreement. The scope of such audit shall be limited to transactions occurring during the preceding 24-month period. For the purposes of the Audit, Reseller will ensure that BMI and/or its duly appointed representative will be given access to such principal place of business and to such records and will be entitled to take copies of all such records for the aforesaid purpose. This right will survive one (1) year after termination of this Agreement. Audit will take place during normal business hours and in accordance with Reseller’s standard security procedures. BMI must give reasonable prior written notice to audit in advance of the desired date. The Audit will be conducted at BMI’s expense unless such audit reveals an underpayment to BMI in excess of five percent (5%) for the period being audited, in which case Reseller will bear the reasonable expenses of the Audit.

8.6 Except as otherwise provided hereunder or as otherwise agreed to in writing between the Parties, each Party is responsible for their own expenses incurred in their performance hereunder. Any costs or expenses incurred by the Parties will be at that Party’s sole risk and upon that Party’s independent business judgment that such costs and expenses are appropriate. For the avoidance of doubt, Reseller shall not be excused from payment of any Fees due to BMI arising out of or in connection with any failure or delay in the payment of any sums due from Corporations to Reseller from time to time.

9. WARRANTIES OF RESELLER

9.1 Reseller represents and warrants to BMI that:

9.2 Reseller has the capacity to enter into and perform and comply with its obligations under this Agreement.

9.3 All actions, conditions and things required to be taken, fulfilled and done (including the obtaining of any necessary consents, approvals, permits and registration) in order (i) to enable Reseller to lawfully enter into and perform and comply with its obligations under this Agreement, and (ii) to ensure that those obligations are valid, legally binding and enforceable.

9.4 Reseller’s entry into and/or performance of or compliance with its obligations under this Agreement do not and will not violate any law to which it is subject.

9.5 Reseller’s entry into and/or performance of or compliance with its obligations under this Agreement do not and will not violate any agreement to which it is a party or which is binding on it or its assets.

9.6 Reseller is solvent and able to pay its dues as and when they fall due and no proceeding has commenced or any action taken or an order made or an effective resolution passed for the dissolution, winding-up, reorganization, reconstruction or bankruptcy of Reseller or, where relevant, for the appointment of a liquidator, liquidation committee. receiver, administrator, trustee or similar officer of Reseller or of all or part of its business or its assets.

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9.7 Reseller will comply with all applicable laws of each jurisdiction applicable to Reseller’s activities under this Agreement.

9.8 Reseller has fully read and understood the terms and conditions of this Agreement and agrees not to abuse the licensing terms, including without limitation, unauthorized copying and/or distribution of the Software. Company agrees to enforce the foregoing on behalf of Brightmail and its superior licensors.

10. WARRANTIES OF BMI

10.1 BMI represents and warrants to Reseller that:

10.1.1 BMI has the capacity to enter into and perform and comply with its obligations under this Agreement;

10.1.2 BMI’s entry into and/or performance of or compliance with its obligations under this Agreement do not and will not violate any agreement to which it is a party or which is binding on it or its assets;

10.2 The Products are provided “AS IS” without any other warranty.

11. WARRANTY DISCLAIMERS; AND LIMITATION OF LIABILITY

11.1 THE EXPRESS WARRANTIES SET FORTH IN SECTION 11 OF THIS AGREEMENT ARE THE ONLY WARRANTIES WITH RESPECT TO THE PRODUCT AND ANY PART THEREOF. BMI AND ITS LICENSORS MAKE NO OTHER REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, AND EXPRESSLY DISCLAIM ALL OTHER WARRANTIES, INCLUDING WITHOUT LIMITATION, WARRANTIES OF NON-INFRINGMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. BMI AND ITS LICENSORS DO NOT WARRANT (a) THAT THE PRODUCT OR ANY PART THEREOF WILL BE FREE FROM DEFECTS, ERRORS OR BUGS, OR (b) THAT THE OPERATION OF THE PRODUCT WILL BE SECURE OR UNINTERRUPTED, OR (c) THAT THE PRODUCT WILL BE ABLE TO PROVIDE OR ATTAIN ANY FEATURES, FACILITIES, FUNCTIONS OR CAPABILITIES, OR (d) THAT ANY RESULTS OR INFORMATION THAT MAY BE DERIVED FROM THE USE OF THE PRODUCT WILL BE ACCURATE, COMPLETE, RELIABLE AND SECURE.

11.2 IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY LOSS OF PROFITS, LOSS OF BUSINESS, LOSS OF USE OR DATA, INTERRUPTION OF BUSINESS, OR FOR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, EVEN IF SUCH PARTY RECEIVED ADVANCE NOTICE OF THE POSSIBILITY OF SUCH DAMAGES, OR FOR ANY CLAIM BY ANY THIRD PARTY, WHETHER OR NOT ANY OF THE MATTERS AFORESAID ARISES IN CONTRACT OR TORT (INCLUDING NEGLIGENCE) OR MISREPRESENTATION OR BREACH OF STATUTORY DUTY OR ANY DUTY UNDER GENERAL LAW OR ANY OTHER LEGAL THEORY. NEITHER PARTY’S ENTIRE LIABILITY TO THE OTHER UNDER THIS AGREEMENT, REGARDLESS OF WHETHER THE CLAIM FOR SUCH DAMAGES IS BASED IN CONTRACT OR TORT (INCLUDING NEGLIGENCE) OR MISREPRESENTATION OR BREACH OF STATUTORY DUTY OR ANY DUTY UNDER GENERAL LAW OR ANY OTHER LEGAL THEORY, (EXCEPT FOR BMI’S DUTY TO INDEMNIFY RESELLER AGAINST INFRINGEMENT AS PROVIDED IN SECTION 15 BELOW) WILL EXCEED THE AMOUNT OF FEES PAID TO BMI BY RESELLER DURING THE INITIAL TERM OF THIS AGREEMENT.

12. INDEMNITY

12.1 BMI will defend, indemnify and hold Reseller, together with its officers and employees, harmless from any third-party suit or action against Reseller to the extent such suit or action is based on a claim that the Software infringes any U.S. intellectual property rights of a third party where such rights are valid and existing as of the Effective Date and are enforceable in any Berne Convention member nation; and BMI will pay any judgment, loss, cost or expense (including reasonable attorneys fees and costs) incurred in connection with the defense thereof by Reseller. These obligations do not include any claims to the extent they are based on: (i) use of the Product in violation of this Agreement, or (ii) in combination with any other software or hardware (except as specified in the Documentation), or (iii) any modification made to the Product by anyone other than BMI, or (iv) any revisions of the Software for which any Updates, fixes or revisions have been made available by BMI to Company if such claims would have been avoided by the installation or use of such Updates, fixes or revisions. The indemnity obligations set forth in this section are subject to: (a) Reseller giving reasonably prompt written notice to BMI of any such claim(s); (b) BMI having sole control of the defense or settlement of the claim; and (c) at BMI’s request and expense, Reseller reasonably cooperating in the investigation and defense of such claim(s). To the maximum extent permitted by applicable law, this section states the entire indemnification obligations

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and liability of BMI with respect to infringement of any intellectual property rights of a third party. Upon BMI’s sole determination, should the Product become, or be likely to become, the subject of a claim of such infringement, or after the entry of any judgment or order not subject to further appeal, that the use of the Product infringes upon the intellectual property rights of any third party, and that such use of the Product must cease, BMI, at its election may, at its own cost and expense, either (a) procure for the Corporation the right to continue the use and/or receipt of the Product “as is”; (b) modify the Product in such a way that the use thereof does not infringe upon such intellectual property rights of the third party, provided such modification does not materially alter the functionality or performance of the Product; or if neither of the foregoing are commercially feasible, (c) terminate this Agreement by written notice to Reseller .

12.2 Reseller will indemnify and hold BMI and its superior licensors (together with their respective officers and employees) harmless from any third-party suit or action against any judgment, loss, cost, or expenses (including reasonable attorneys fees and costs) which may be suffered or incurred by BMI to the extent such suit or action is based on a claim that (i) Reseller caused personal injury or death of a third-party, or (ii) the Reseller’s Trademarks infringe the trademarks of any third-party, or (iii) any warranty claims made by Corporations for warranties made by Reseller, or (iv) an act or omission by Reseller to the extent authorized by this Agreement. The indemnity obligations set forth in this section are subject to: (a) BMI giving prompt written notice to Reseller of any such clams); (b) Reseller having sole control of the defense or settlement of the claim; and (c) at Reseller’s request and expense, BMI cooperating in the investigation and defense of such claim(s).

13. TERM

13.1 This Agreement will come into force on the Effective Date, and will continue for one year (“Initial Term”), unless earlier terminated in accordance with Section 16 of this Agreement. Thereafter, if there has been no material breach of the terms of this Agreement by Reseller, this Agreement will renew for additional one (1) year periods (“Further terms”) until terminated in accordance with this Section 15 and Section 16 below. The Initial Term and Further Term(s), if any, will be referred to as the “Term”.

14. TERMINATION

14.1 If either Party defaults in the performance of any of its material obligations contained in this Agreement, the non-defaulting Party may terminate this Agreement upon at least thirty days written notice if the default is not cured during such notice period. This Agreement may be terminated by one Party immediately at any time, without notice, if any proceeding is commenced or any action taken or an order is made or an effective resolution is passed for the dissolution, winding up, or bankruptcy of the other Party or, where relevant, for the appointment of a liquidator, liquidation committee, receiver, administrator, trustee or similar officer of the other Party of all or a substantial part of its business or its assets. BMI may terminate this Agreement for any reason upon giving Reseller sixty (60) days prior written notice.

14.2 Upon termination or expiration of this Agreement, the rights granted to Reseller under this Agreement (including for the avoidance of doubt, the rights granted under Sections 2 of this Agreement) will lapse and terminate, and:

14.2.1 Reseller will immediately cease and discontinue, and/or procure the cessation and discontinuance of the use of the Product, the BMI Trademarks, the Confidential Information and the IP Rights and immediately remove from its letterhead, advertising literature and place of business all references to the Product and the BMI Trademarks and will also cease to represent itself as the authorized Reseller of the Product;

14.2.2 Within thirty (30) calendar days after such said termination or expiration of this Agreement, Reseller will deliver to BMI or destroy all copies of the Software, Documentation, BMI’s and its superior licensors Confidential Information, and any other documents, papers, materials or property of BMI and/or its superior licensors which Reseller may have in its possession or under its control and will furnish to BMI an affidavit signed by an officer of Reseller certifying that, to the best of its knowledge, such delivery or destruction has been fully effected; and

14.2.3. Reseller will within 30 days of such said termination or expiration of this Agreement pay to BMI all amounts outstanding in favor of BMI, unless such sums are due earlier, then by the earlier due date.

14.3 Notwithstanding the foregoing, if this Agreement terminates for any reason, BMI may continue to provide to the applicable Corporation the Rule Updates, Updates and Upgrades, as available for the original (or “initial”) term of that Corporation’s Subscription Agreement. Upon termination, BMI will, upon notice to Reseller, do any of the following at its discretion: (i) require Reseller to terminate all Subscription Agreements, or (ii) give notice to Reseller and the

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Corporation that BMI will assume the performance of all of Reseller’s obligations under the Subscription Agreements. Reseller agrees that such notice will be binding on Reseller and Reseller will be deemed, as of the date specified in the notice, to have assigned all its rights and benefits in and to the Subscription Agreement to BMI or its agent, and the parties will work together in good faith to provide for the orderly transfer of such arrangements with Corporations to BMI. The Reseller shall indemnify and keep BMI, indemnified against any and all losses, claims, damages, demands, liabilities, costs and expenses (including without limitation, legal costs and expenses) arising out of or in connection with each Subscription Agreement prior to the assignment of each Subscription Agreement to BMI, whether or not such losses, claims, damages, demands, liabilities, costs and expenses (including, without limitation, legal costs and expenses) have arisen or are known at the time of such assignment.

14.4 Termination will be without prejudice to any accrued right or liability or to any other obligation surviving termination or to any rights or remedies of the Parties under this Agreement or at law. Upon termination or expiration of this Agreement the provisions of Sections 1, 3, 4, 5, 8.5, 11, 12, 14, 15 and 16, and all payment obligations incurred prior to the effective date of such termination or expiration will survive. All other provisions of this Agreement will terminate.

15. CONFIDENTIALITY. Each Party agrees to maintain all Confidential Information of the other Party in confidence to the same extent that it protects its own similar Confidential Information (and in no event using less than a reasonable degree of care) and to use such Confidential Information only as permitted under this Agreement. The receiving Party will not provide the Confidential Information of the disclosing Party to any third party, nor may it disclose such information to any employee of the receiving Party, except for the purpose of performing this Agreement, and unless such person has entered into an agreement with the receiving Party containing confidentiality provisions covering the Confidential Information that are at least as restrictive as those set forth in this Agreement (“Third Party NDA”). In the event of a disclosure of Confidential Information permitted hereunder by the receiving party, the receiving party shall diligently enforce such Third Party NDA and use its best efforts to ensure its enforcement. Reseller shall promptly notify BMI of any violations of any Third Party NDA of which Reseller is aware and assist BMI in the enforcement of such Third Party NDA. For purposes of this Agreement “Confidential Information” will mean audio, visual, oral or physical information marked “Confidential” or could reasonably be considered of a proprietary or confidential nature, provided that for information disclosed orally, a written summary of such information is provided to the receiving Party within thirty days of initial oral disclosure; and provided that email probe addresses, information disclosed in design reviews and any pre-production releases of the Product provided by BMI will be considered Confidential Information whether or not marked as such. Each Party agrees to take all reasonable precautions to prevent any unauthorized disclosure or use of Confidential Information. The foregoing restrictions on disclosure and use will survive for three (3) years following termination of this Agreement but will not apply with respect to any Confidential Information which (i) was or becomes publicly known through no fault of the receiving Party; (ii) was rightfully known or becomes rightfully known to the receiving Party without confidential or proprietary restriction from a source other than the disclosing Party; (iii) is independently developed by the receiving Party without reference to the Confidential Information; and (iv) the receiving Party is compelled to disclose pursuant to a court order or the requirements of any stock exchange; provided that the receiving Party has given the disclosing Party reasonable notice and opportunity to contest such compulsion to disclose. The term ‘Party” for purposes of this Section 15 shall include such Party’s superior licensors.

16. GENERAL PROVISIONS

16.1 Any notice or demands required or permitted by this Agreement must be in writing and must be sent personally or by facsimile, recognized commercial overnight courier, or pre-paid registered or certified mail. Notices will be addressed as set forth in Exhibit A attached hereto. Any Party may change its address or facsimile for the purposes hereof by written notice to the other Party. Notices will be effective (a) if delivered personally, on the date of delivery; (b) in the case of domestic mail, if transmitted by pre-paid mail, on the date falling seven (7) days after posting, provided that it will be sufficient to show that the envelope containing such notice or information was properly addressed and sent by pre-paid post and that it has not been returned to sender to prove that such notice or information has been duly sent; (c) in the case of international mail, if transmitted by prepaid registered air-mail, on the date falling fourteen (14) days after posting; provided that it will be sufficient to show that the envelope containing such notice or information was properly addressed and sent by prepaid post and that it has not been so returned to the sender to prove that such notice or information has been duly sent; and (d) if transmitted by facsimile, on the date of transmission, provided that it will be sufficient to show that the facsimile has been dispatched with the appropriate answer back code received to prove that such facsimile has been duly sent.

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16.2 The waiver by either Party of a breach of or a default under any provision of this Agreement will not be construed as a waiver of any subsequent breach of the same or any other provision of this Agreement, nor will any delay or omission on the part of either Party to exercise or avail itself of any right or remedy that it has or may have hereunder operate as a waiver of any right or remedy. No amendment or modification of any provision of this Agreement will be effective unless in writing and signed by a duly authorized signatory of BMI and Reseller.

16.3 Neither Party may assign or otherwise transfer any of its rights, obligations or licenses hereunder without the prior written consent of the other Party, which consent will not be unreasonably withheld. Any purported transfer or assignment in violation of this section will be void. Notwithstanding the foregoing, either Party may assign this Agreement without consent (i) to any entity in which the Party has a greater than 50% equity ownership interest or of which the Party has voting control, (ii) to any entity that buys 50% or more of that Party’s stock or all or substantially all of that Party’s assets, or (iii) as part of a merger, reorganization or re-incorporation; provided, however, the assigning party must give prompt notice of the assignment to the non-assigning party and the non-assigning party may terminate this Agreement upon thirty (30) days’ written notice within sixty (60) days following an assignment. Subject to the foregoing, the provisions of this Agreement will apply to and bind the successors and permitted assigns of the Parties.

16.4 This Agreement will be governed in all respects by the substantive laws of the State of California, United States of America (excluding conflict of laws rules) as applied to agreements entered into and to be performed entirely within the State of California between California residents, without regard to the U.N. Convention on Contracts for the International Sale of Goods. Any dispute regarding this Agreement will be subject to the non-exclusive jurisdiction of the California state courts in and for San Francisco County, California (or, if there is exclusive federal jurisdiction, the United States District Court for the Northern District of California), and the Parties agree to submit to the personal and non-exclusive jurisdiction and venue of these courts.

16.5 Reseller understands that BMI is subject to regulation by agencies of the U.S. government, including the U.S. Department of Commerce, which prohibits export or diversion of certain products and technology to certain countries. Any and all obligations of BMI to provide the Product or other materials, as well as any technical assistance, will be subject in all respects to such United States laws and regulations and will from time to time govern the license and delivery of technology and products abroad by persons subject to the jurisdiction of the United States, including the Export Administration Act of 1979, as amended, any successor legislation, and the Export Administration Regulations issued by the Department of Commerce, International Trade Administration, or Office of Export Licensing. Reseller warrants that it will comply in all respects with any export and re-export restrictions and obtain an export license (if necessary) for the marketing and Reseller of the Product by Reseller. Each Party will comply with all applicable laws, rules and regulations in its performance under this Agreement.

16.6. The relationship of the Parties under this Agreement is that of independent contractors, and no agency, partnership, joint venture, or employment is created as a result of this Agreement and neither Reseller nor its agents have any authority of any kind to bind BMI in any respect whatsoever.

16.7 The captions and section and paragraph headings used in this Agreement are inserted for convenience only and will not affect the meaning or interpretation of this Agreement.

16.8 If the application of any provision or provisions of this Agreement to any particular facts of circumstances will be held to be invalid or unenforceable by any court of competent jurisdiction, then: (a) the validity and enforceability of such provision or provisions as applied to any other particular facts or circumstances and the validity of other provisions of this Agreement will not in any way be affected or impaired thereby; and (b) such provision or provisions will be reformed without further action by the Parties, to and only to, the extent necessary to make such provision or provisions valid and enforceable when applied to such particular facts and circumstances; and, in any event, the remainder of this Agreement will remain in full force and effect.

16.9 If any exchange control or other restrictions prevent or threaten to prevent remittance to BMI of any money owed under this Agreement, Reseller will immediately notify BMI in writing and follow BMI’s instructions in respect of the money to be paid, including if required, depositing the same with any bank or other person at such location as may be designated by BMI.

16.10 Either Party will be excused from any delay or failure in performance hereunder, except the payment of monies by Reseller to BMI, caused by reason of any occurrence or contingency beyond its reasonable control, including but not limited to, acts of God, earthquake, labor disputes and strikes, riots, war, shortages, and governmental regulations (“Force

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Majeure event”). The obligations and rights of the Party so excused will be extended on a day-to-day basis for the period of time equal to that of the underlying cause of the delay; provided that such Party will give notice of such Force Majeure event to the other Party as soon as reasonably possible.

16.11 Upon the prior written approval of the Parties, the Parties will issue a joint press release announcing the relationship, and Reseller agrees to allow BMI to use Reseller’s name in such release, and agrees to participate in such press release by providing favorable comments from an appropriate employee with respect to the Product. BMI agrees to allow Reseller to use BMI’s name in such release, and agrees to participate in such press release by providing favorable comments from an appropriate employee with respect to the Product and BMI’s relationship with Reseller. In addition, Reseller will be invited to participate from time to time, in its sole discretion, in any press launch event organized by BMI.

16.12 The Parties acknowledge that any breach of certain provisions of this Agreement may cause the other Party irreparable harm and significant injury to an extent that may be extremely difficult to ascertain. Accordingly, both Parties will have, in addition to any other rights and remedies available to it at law or in equity, the right to seek injunctive relief to enjoin any breach or violation of this Agreement.

16.13 Except as provided herein, the remedies under this Agreement are cumulative and not exclusive of any other rights or remedies whether provided by law or otherwise.

16.14 This Agreement, including the Exhibits attached hereto, constitutes the entire agreement between the Parties concerning the subject matter hereof and supersedes all proposals or prior agreements whether oral or written, and all communications between the Parties relating to the subject matter of this Agreement and all past courses of dealing or industry custom. The pre-printed terms and conditions on any purchase order or other written instrument submitted by either Party will have no force and effect and are hereby rejected. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which taken together will constitute one and the same instrument.

16.15 Third Party Beneficiary. The vendor of third party products that are integrated a part of the Software shall be deemed a third party beneficiary to this Agreement.

16.16 U.S. Government Restricted Rights. RESTRICTED RIGHTS LEGEND. All BMI products and documentation are commercial in nature. The software and software documentation are “Commercial Items”, as that term is defined in 48 C.F.R. section 2.101, consisting of “Commercial Computer Software” and “Commercial Computer Software Documentation”, as such terms are defined in 48 C.F.R. section 252.227-7014(a)(5) and 48 C.F.R. section 252.227-7014(a)(1), and used in 48 C.F.R. section 12.212 and 48 C.F.R. section 227.7202, as applicable. Consistent with 48 C.F.R. section 12.212, 48 C.F.R. section 252.227-7015, 48 C.F.R. section 227.7202 through 227.7202-4, 48 C.F.R. section 52.227-14 and other relevant sections of the Code of Federal Regulations, as applicable, BMI’s computer software and computer software documentation are licensed to United States Government end users with only those rights as granted to all other end users, according to the terms and conditions contained in this Agreement. Manufacturer is Brightmail Incorporation, 301 Howard Street, Suite 1800, San Francisco, CA.

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IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement effective as of the Effective Date.

BRIGHTMAIL INCORPORATED		RESELLER
By:		By:
Name:	Michael Irwin	Name:
Title:	Chief Financial Officer	Title:
Date:		Date:

EXHIBIT A

1. NOTICES. Below is the contact information for the Parties:

RESELLER	BMI
Attention:	Attention:	Legal Counsel
Address:	Address:	301 Howard Street, Suite 1800 San Francisco, CA 94105
Fax Number:	Fax Number:  415 348-9636
RELATIONSHIP MANAGER RESELLER	RELATIONSHIP MANAGER BMI
Name:	Name:
Address:	Address:	301 Howard Street, Suite 1800 San Francisco, CA 94105
Phone Number:	Phone Number:
Fax Number:	Fax Number:
Email Address:	Email Address:

EXHIBIT B

Minimum Terms and Conditions for Subscription Agreements

LICENSE AND SERVICES AGREEMENT

This Master License and Services Agreement (“Agreement”) is made this              day of             , 200   (“Effective Date”) by and between                 , a                  Corporation, located at                 ,

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(“Reseller”) and                     , a                  corporation located at (“Company”), stating the terms under which Reseller or its superior licensors shall provide to Company the software and services between the parties from time to time pursuant to the terms and conditions set forth in this Agreement.

This Agreement and the specifications regarding the Software, license type (i.e. Enterprise license), price, term, the minimum number of End Users required per License type (“Minimum Commitment”), and payment terms constitute the entire agreement between Company and Reseller and supercede any prior and contemporaneous agreement, representation, or understanding regarding the subject matter of this Agreement.

WHEREAS, Brightmail Incorporated (“BMI”) develops and licenses software which filters unwanted or unsolicited email messages and/or virus and has licensed this Software to Reseller for sublicensing to Reseller’s customers;

WHEREAS, Company desires to sublicense BMI’s software from Reseller and Reseller desires to grant and render the same.

NOW THEREFORE, the parties agree as follows:

1. DEFINITIONS

1.1 “Company Email Service” as it relates to an enterprise or corporate entity’s use of the Software for the benefit of its employees only (“Enterprise License”), means the Company’s email services provided to End Users for the purposes of conducting Company’s internal business and which are enabled via Company’s mail transfer agent (“MTA”) as described on an invoice You receive from Brightmail, or its authorized reseller, Your sales receipt, invoice or purchase order, or on BMI’s website only as a Evaluation License download, as applicable (“Order”).

1.2 “End User” as it relates to an Enterprise License, is the employee, contractor, or other agent authorized by Company as a user of an email mailbox account or an email address (“Email Account”) hosted by the Company Email Service.

1.3 “Documentation” is BMI’s standard system guide documentation that outlines the system architecture and its interfaces. It includes comprehensive guides on installation and operations.

1.4 “Email Address” is a name that identifies an electronic post office box on a network where an email can be sent. Every End User has a unique email address, but such End User may not have a Mailbox.

1.5 “Mailbox (es)” is an area, in memory or on a storage device, where email may be sent, placed, or received by an End User at a designated Email Account. An End User may hold or have authorized use of one or more Mailboxes.

1.6 “Rules” are explicit, conditional statements, or criteria, that are used and created by BMI to detect and filter Spam.

1.6 “Rule Update(s)” are current adaptations to explicit conditional statements, or criteria, that is used and created by BMI to detect and filter spam.

1.7 “Server (s)” means the Company’s hardware at Company’s facility(ies) which will, in conjunction with the Software, filter incoming End User email and divert, reject, or discard messages.

1.8 “Service(s)” is (i) the provision of the Software functionality, including Updates, and Upgrades, (ii) the creation of Rules and Rules Updates, and (iii) the provision of second line support. Services referenced under this Section 1.8 exclude any professional or consulting services.

1.9 “Software” is (i) BMI’s proprietary inbound email-filtering software product, the Brightmail^® Anti-Spam (“AS Product”) and/or Anti-Virus Solution (“AV Product”), that is designed to reduce Spam and/or Virus from reaching the End User as described in the Order, (ii) any third party software products which may be integrated with the Brightmail Anti-Spam Solution, (iii) Updates and Upgrades, and (iv) BMI’s standard system documentation. Any Rules, Rule Updates, Updates, and Upgrades that BMI releases become part of the software.

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1.10 “Spam” is the mass electronic distribution of unsolicited, bulk email to individual email accounts or email lists. Also referred to as “junk email” or “bulk email”.

1.11 “Updates” are minor updates, error corrections and bug fixes that do not add significant new functions to the Software, and that are released by BMI or its third party licensors. Updates are designated by an increase to the Software’s release number to the right of the decimal point (e.g., Software 1.0 to Software 1.1). The term Updates specifically excludes Upgrades or new software versions marketed and licensed by BMI as a separate product.

1.12 “Upgrade(s)” are revisions to the Software, which add new enhancements to existing functionality, if and when it is released by BMI or its third party licensors, in their sole discretion. Upgrades are designated by an increase in the Software’s release number, located to the left of the decimal point (e.g., Software 1.x to Software 2.0). In no event shall Upgrades include any new versions of the Software marketed and licensed by BMI or its third party licensors as a separate product.

1.13 “Virus(es)” is program or code that inserts, replicates, and infects another program, boot sector, partition sector or document that supports macroes. Viruses may be “worms” and “trojan horses”.

2. LICENSE GRANT AND SERVICES

2.1 License Grant. If the Order relates to the licensing of the Software and Services in consideration for the Fees (as defined in Section 6), Reseller grants to Company a non-exclusive, non-sublicensable, non-transferable and royalty-bearing license during the Term to use the Software on Servers, solely in connection with the provision of Email Accounts to End Users as part of the Company Email Service (“License”), BMI will provide Services in conjunction with this License. The duration (and territory, if outside of the United States) of this license is further defined on any Order. The license and Services are co-terminus. Except as expressly provided herein, no right, title or interest in any Software and Documentation is granted by BMI to Company. This License is conditioned upon your compliance with the terms of the Agreement.

2.2 Evaluation License. If the License type on an Order is for an Evaluation License or if Company makes a request to Brightmail or its authorized reseller to evaluate the Software, Brightmail grants to Company a temporary, nontransferable, nonexclusive right and license to the Software only for purposes of evaluation and testing purposes, provided that (i) the Software is solely installed and used on Servers owned or maintained by Company and only in connection with the use of Company’s internal email accounts in a test environment. Company may evaluate the Software for the purposes of entering into a final and definitive license and services agreement for the Software (“Evaluation License”). Nothing in this Agreement obligates Company to enter into a definitive license and services agreement. All Evaluation Licenses are thirty (30) days or less, unless otherwise agreed to by the parties as evidenced by an executed writing (i.e. any Order or agreement). Only Sections 1, 2.2, 3, 5, 7, 8, 9, 10 and 11 of this Agreement shall apply to an Evaluation License. Company agrees not to disclose, lease, sell or otherwise provide in any way the Software, Documentation or other materials provided by Reseller or its superior licensors to any third party without Reseller’s superior licensor’s prior written consent.

2.3 Telephone/Email/Website Support. (a) BMI will provide at no additional cost such Standard Service Support (“Standard Support”) as detailed in BMI’s website at http://www.brigbtmail.com/support offerings.html. BMI will provide such Premium Support as provided in the purchase order submitted by Company, which Premium Support is detailed in BMI’s website at http://www.brightmail.com/support offerings.html. Company may contact BMI support at *, or call US Toll Free at *, or Company can go to our support site at https://support.brightmail.com. In connection with provision of Standard Support, BMI will provide telephone support Monday through Friday (a) 6:00 am to 6:00pm PST if Company is located in the United States or Canada, and (b) 9:00am to 5:00pm GMT if Company is located outside of the United States and Canada,

2.4 Software Support: BMI will provide technical support for the current Software and one version prior to the currently supported version (e.g., A version is characterized by an “n.n’ format) for a period of twelve (12) months. For example, if 5.0 is the current Software version number, then versions 5.n and 4.n are supported. Support for version 4.n will be stepped down twelve (12) months following the release of 5.0.

2.5 Obsolescence: BMI will provide technical support for the then current production version of the Software (the “Current Version”) and the version immediately prior to the Current Version (the “Prior Release”) (e.g., A version is characterized by an “n.n” format), provided however, that BMI’s obligation to support the Prior Release shall terminate

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twelve months after the first commercial release of the Current Version. For example, if 5.0 is the Current Version, then versions 5.n and 4.n are supported. Support for version 4.n will be stepped down 12 months following the release of 5.0.

2.6 Required Upgrade: Throughout the term of the Agreement, Company must upgrade to a supported version of the Software in order to assure compatibility with the latest version of the Software and proper product functionality. Upgrades are included in the Services for no additional Fee (i.e. The Fee for Upgrades are inclusive).

3. PROPRIETARY RIGHTS. Title to and ownership of the Software, Services, and other materials and all associated intellectual property right related to the foregoing provided by Reseller or its superior licensors to Company will remain the exclusive property of Reseller’s superior licensors. Company and its employees and agents will not remove or alter any trademarks, or other proprietary notices, legends, symbols, or labels appearing on or in copies of the Software or other materials delivered to Company by Reseller or its superior licensors.

4. DELIVERY AND ACCEPTANCE. Company will have thirty (30) days from the date the Software is delivered to Company, to reject the Software. “Delivery Date” means the date on which Company receives the Software. Company may only reject the Software due to major nonconformity of the Software to the Documentation. Company’s rejection must be in writing and the writing must include the nature of such nonconformity and reasons for Company’s rejection. Company’s exclusive remedy and BMI’s entire liability in the event of a rejection will be prompt correction of such nonconformity.

5. OWNERSHIP. Unless otherwise agreed in writing, any programs, inventions, concepts, documentation. specifications or other written or graphical materials and media created or developed by Reseller or its superior licensors during the course of its performance of this Agreement, or any related consulting or professional service agreements, including all copyrights, database rights, patents, trade secrets, trademark, moral rights, or other intellectual property rights (“Intellectual Property Right(s)”) associated with the performance of such work shall belong exclusively to Reseller or its superior licensors and shall, in no way be considered a work made for hire for Company within the meaning of Title 17 of the United States Code (Copyright Act of 1976).

6. FEES AND PAYMENTS

6.1 Fees / Late Payments. Company will pay to Reseller the License and Services fees (“Fees”) in accordance with what is provided on any Order, including any minimum commitments as provided thereunder. All Fees are non-refundable. All amounts not paid when due under this Agreement will accrue interest at the lesser of (1) (i) in the case this Agreement is governed by laws of the state of California, USA, one and one-half percent (1.5%) per month, or (ii) in the case this Agreement is governed by English laws, 3% per annum above the base rate of Barclays Bank plc for US Dollars from time to time, such interest provided for in this Section 6.1(1)(1) through (ii) above shall be compounded daily from the due date until payment in full is made or (2) the maximum rate permitted under applicable law. BMI may terminate Services immediately after Company’s failure to remit Fees when due. In the event it is necessary to allocate the Fees for each of the AV Product and AS Product, fifty percent of the per End User price shall be allocated to the AV Product and the remaining fifty percent shall be allocated to the AS Product.

6.2 Taxes. All prices are exclusive of all taxes (including value added tax), duties or levies, however they are designated or computed, Company will be responsible for, and pay all taxes based on payments due under this Agreement including, but not limited to, sales, use, or value-added taxes, duties, withholding taxes and other assessments now or hereafter imposed, exclusive of taxes based upon BMI’s net income.

6.3 Company’s Reports of Use / Audit of Use. Company will report and certify to Reseller the total number of End Users (i) within 5 days following the anniversary of the effective date of the applicable Order of an Enterprise License, and (ii) within 5 days following any quarter in which the number of End Users exceeds the number of End Users which has been invoiced by Reseller. Company will maintain records to track the number of End Users. BMI will have the right to audit (during normal business hours) no more than once per twelve (12) month period throughout the term of the Agreement, to confirm the accuracy of the number of End Users reported to BMI, and compliance with any other terms of the Agreement. This right will survive one (1) year after termination of the Agreement. Reseller must give prior written notice to audit five (5) business days in advance of the desired date. The audit will be conducted at Reseller’s expense unless such audit reveals an underpayment to Reseller in excess of 5% for the period being audited, in which case Company will bear the expenses of the audit.

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7. LIMITED WARRANTY AND WARRANTY DISCLAIMERS

7.1 WARRANTY DISCLAIMER. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, RESELLER OR ITS SUPERIOR LICENSORS LICENSE THE SOFTWARE AND SERVICES HEREUNDER ON AN “AS IS” BASIS. RESELLER AND/OR ITS THIRD PARTY LICENSORS MAKE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, WHETHER EXPRESS, IMPLIED, OR STATUTORY (EITHER IN FACT OR BY OPERATION OF LAW), AND EXPRESSLY DISCLAIM ALL OTHER WARRANTIES, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. NEITHER RESELLER NOR ITS THIRD PARTY LICENSORS WARRANT THAT THE SOFTWARE, SERVICES, OR OTHER MATERIALS PROVIDED BY RESELLER OR ITS SUPERIOR LICENSORS TO COMPANY (1) IS FREE FROM DEFECTS, ERRORS OR BUGS, (2) THAT OPERATION OF THE SOFTWARE WILL BE UNINTERRUPTED, OR (3) THAT ANY RESULTS OR INFORMATION THAT MAY BE DERIVED FROM THE USE OF THE SOFTWARE WILL BE ACCURATE, COMPLETE, RELIABLE AND SECURE.

7.2 Company Warranty. Company specifically warrants that it will not process Spam in such a way as to negatively impact the Software or Services, as determined by Reseller or its superior licensors in its sole discretion. Specifically, Company agrees that it will not alert the sender of Spam to the presence of the Software or Services.

8. LIMITATION OF LIABILITY. (a) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT WILL EITHER PARTY (INCLUDING RESELLER’S SUPERIOR LICENSORS) BE LIABLE TO THE OTHER FOR ANY LOSS OF PROFITS, COSTS OF PROCUREMENT OF SUBSTITUTE GOADS OR SERVICES, LOSS OF BUSINESS, LOSS OF USE OR DATA, INTERRUPTION OF BUSINESS, OR FOR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, EVEN IF SUCH PARTY RECEIVED ADVANCE NOTICE OF THE POSSIBILITY OF SUCH DAMAGES, PROVIDED, HOWEVER, THAT LIMITATIONS SET FORTH IN THIS SECTION SHALL OT APPLY TO ANY BREACH BY COMPANY OF SECTIONS 2, 3 AND 11. IN NO EVENT SHALL RESELLER’S AND ITS SUPERIOR LICENSORS AGGREGATE LIABILITY ARISING UNDER ANY PROVISION OF THIS AGREEMENT, REGARDLESS OF WHETHER THE CLAIM FOR SUCH DAMAGES IS BASED IN CONTRACT, TORT, OR OTHER LEGAL THEORY, EXCEED THE TOTAL AMOUNT PAID TO BMI PURSUANT TO THIS AGREEMENT DURING THE TWELVE (12) MONTHS PRIOR TO THE EVENT GIVING RISE TO SUCH LIABILITY. THE PARTIES AGREE THAT THIS SECTION 8 REPRESENTS A REASONABLE ALLOCATION OF RISK. SOME STATES AND COUNTRIES, INCLUDING MEMBER COUNTRIES OF THE EUROPEAN UNION, DO NOT ALLOW LIMITATION OR EXCLUSION OF LIABILITY OR LIMITATION OR EXCLUSION OF LIABILITY UNDER CERTAIN CIRCUMSTANCES, IN SUCH CASE THE ABOVE LIMITATION OR EXCLUSION MAY NOT APPLY TO YOU.

9. TERM AND TERMINATION

9.1 Term. Unless terminated as set forth herein, this Agreement will continue for the term specified on the applicable Order commencing from the date of such Order (the “Initial Term”), except with respect to an Evaluation License, this Agreement shall continue for a period of 30 days and upon Company’s written request and Reseller’s and its superior licensors written consent, the evaluation period may extend the term of this Agreement for only one additional 30 day period. Except with respect to an Evaluation Licenses, after the Initial Term, this Agreement will automatically be renewed for one-year periods unless either party gives notice of its intent not to renew, at least 60 days prior to the expiration of the Initial Term, or any one-year renewal thereof.

9.2 Termination. If the Parties default in the performance of any material provision of this Agreement, then the other party may terminate the Agreement upon thirty (30) days written notice if the default is not cured during such thirty (30) day period. Company’s failure to pay any Fees when due will constitute a default in the performance of a material provision of this Agreement and Reseller and its superior licensor may terminate the license granted hereunder and Services for such nonpayment. This Agreement may be terminated by one Party immediately at any time, without notice, upon (i) the institution by or against the other Party of insolvency, administration, receivership, administrative receivership or bankruptcy proceedings or any other proceedings for the settlement of such Party’s debts whether compulsorily or voluntarily (other than for purposes of amalgamation or reconstruction, if Company is located in the European Union, Ireland, Norway or Switzerland), (ii) such other Party making a general assignment for the benefit of creditors, (iii) such other Party’s dissolution, (iv) an encumbrancer takes possession of, or a receiver is appointed to, any of the property or assets of a party, (v) such Party ceases, or threatens to cease, to carry on business or a substantial part of its business; (vi) similar events as those referred to in subsection (i) through (v) above in any jurisdiction occur relating to such Party. In the case of an Evaluation License; either party may terminate this Agreement at any time upon written notice to the other party

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9.3 Effect of Termination or Expiration: Return of Materials. The license granted in Section 2 will immediately terminate upon this Agreement’s termination or expiration. Within thirty (30) calendar days after termination or expiration of this Agreement, Company will: (i) deliver to Reseller or its superior licensors or destroy all copies of the Software or other materials provided by Reseller or its superior licensor to Company; (ii) certify in writing (through an officer of Company) that such delivery or destruction has been fully effected and (iii) immediately pay to Reseller all amounts due and outstanding as of the date of such termination or expiration. Sections 1, 3, 4, 5, 7, 8, 9, 10, and 11 shall expressly survive any termination or expiration of this Agreement.

9.4 Alteration to the Software. Reseller’s superior licensor shall have the right to make any modifications and Upgrades to the Software including, without limitation, substituting the Virus Engine of its existing licensor (the “Combined BMI/Symantec Product”), Symantec Corporation, that is incorporated in the AV Product with anti-virus products of other third parties (the “AV Upgrade”). Reseller or its superior licensor shall made available such AV Upgrade to Company and in connection with the AV Upgrade, Company shall install the AV Upgrade and de-install the Combined BMI/Symantec Product and destroy all copies of such product and furnish to Reseller a certification signed by an officer of Company verifying that such delivery or destruction has been fully affected. Upon installation of the AV Upgrade, the license regarding the Combined BMI/Symantec Product will be terminated and the AV Upgrade will be substituted in its place as the AV Product.

10. CONFIDENTIALITY

10.1 Reseller, its superior licensors and Company will, from time to time, in connection with the performance of this Agreement, disclose Confidential Information to each other. Each Party agrees to hold in confidence such Confidential Information of the other Party to the same extent that it protects its own similar Confidential Information (and in no event using less than a reasonable degree of care) and to use such Confidential Information only as permitted under this Agreement. The receiving Party will not provide the Confidential Information of the disclosing Party to any third party. For purposes of this Agreement “Confidential Information” means information of a party or its superior licensors marked “Confidential” or information reasonably considered by the disclosing party to be of a proprietary or confidential nature; provided that the Software, any documentation, email probe addresses, information disclosed in design reviews and any pre-production releases of the Software provided by Reseller or its superior licensors will be expressly designated Confidential Information whether or not marked as such, Each Party agrees to take all reasonable precautions to prevent any unauthorized disclosure or use of Confidential Information.

10.2 Exceptions. The foregoing restrictions will not apply with respect to any Confidential Information which (i) was or becomes publicly known through no fault of the receiving Party; (ii) was rightfully known or becomes rightfully known to the receiving Party without confidential or proprietary restriction from a source other than the disclosing Party; (iii) is independently developed by the receiving Party without reference to the Confidential Information; (iv) is approved by the disclosing Party for disclosure without restriction in a written document which is signed by a duly authorized officer of such disclosing Party; and (v) the receiving Party is legally compelled to disclose; provided that the receiving Party has given the disclosing Party reasonable notice and opportunity to contest such compulsion to disclose.

10.3 Restrictions. Company will not modify, transfer, resell for profit, distribute, copy, enhance, adapt, translate, decompile, reverse engineer, disassemble, or otherwise determine, or attempt to derive source code for any Software or any internal data files generated by the Software or to create any derivative works based on the Software or the Documentation, and agrees not to permit or authorize anyone else to do so. Company will not authorize or enable third parties to determine or attempt to determine the filtering rules used by the Software, under any circumstances. Company shall not host the Software for download by third parties.

11. GENERAL PROVISIONS

11.1 Assignment. The Parties may not assign or otherwise transfer any of its rights, obligations or licenses hereunder, whether by law or otherwise, without the prior written consent of the other Party. This Agreement will be binding upon and will inure to the benefit of the parties and their permitted successors and assigns.

11.2 Governing Law / Jurisdiction. This Agreement will be governed in all respects by the laws of the State of California, U.S.A. (excluding conflict of laws rules), without regard to the U.N. Convention on Contracts for the International Sale of Goods if the Software is shipped to any jurisdiction outside of the European Union, Iceland, Norway or Switzerland. This Agreement will be governed in all respects by the English laws if the Software is shipped to the European Union, Iceland, Norway or Switzerland. When the laws of the State of California U.S.A. apply, any dispute

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regarding this Agreement will be subject to the exclusive jurisdiction of the federal and state courts located in San Francisco County, California, U.S.A. and the Parties agree to submit to the personal and exclusive jurisdiction and venue of these courts. When the laws of the United Kingdom apply, any dispute regarding this Agreement will be subject to the exclusive jurisdiction of the English courts.

11.3 Relationship of the Parties. The relationship of the Parties under this Agreement is that of independent contractors, and no agency, partnership, joint venture, or employment is created as a result of this Agreement. The Parties acknowledge that Reseller is an independent contractor of its superior licensors and as such has no authority to bind its superior licensors.

11.4 Severability. If any provision of this Agreement or portion thereof is found to be invalid or unenforceable under applicable law, it shall be changed and interpreted so as to best accomplish the objectives of the original provision to the fullest extent allow by law without invalidating the remainder of such provision or the remaining provisions of this Agreement and such remaining provisions shall remain in full force and effect.

11.5 Force Majeure. Either party will be excused from any delay or failure in performance hereunder, except the payment of monies by Company to BMI, caused by reason of any occurrence or contingency beyond its reasonable control, including but not limited to, acts of God, earthquake, labor disputes and strikes, riots, war, novelty of product manufacture or other unanticipated product development problems, and governmental requirements.

11.6 Entire Agreement. (i) This Agreement, and (ii) the click-through agreement in case of electronic delivery or shrink-wrap agreement in case of physical delivery between BMI and Company (the “BMI License Agreement”), constitute the entire agreement between the Parties concerning the subject matter hereof and supersedes all proposals or prior agreements whether oral or written, and all communications between the Parties relating to the subject matter of this Agreement and all past courses of dealing or industry custom. Except where this Agreement references an Order, the terms and conditions of this Agreement will prevail, notwithstanding any variance with any purchase order or other written instrument submitted by a Party, whether formally rejected by the other Party or not. Unless expressly agreed to in writing by Reseller, the preprinted terms of any Company purchase order issued hereunder will be deemed stricken and of no force or effect. The BMI License Agreement shall govern and take precedence over any provisions in this Agreement that are in conflict with the BMI License Agreement.

11.7 Injunctive Relief. Company acknowledges that any breach of the provisions of Section 2, 3, 5 or 10 may cause Reseller or its superior licensors irreparable harm and significant injury to an extent that may be extremely difficult to ascertain. Accordingly, Company agrees that Reseller and its superior licensors will have, in addition to any other right remedies available to it at law or in equity, the right to seek injunctive relief to enjoin any breach or violation of such sections.

11.8 U.S. Government Restricted Rights. RESTRICTED RIGHTS LEGEND. All BMI products and documentation are commercial in nature. The software and software documentation are “Commercial Items”, as that term is defined in 48 C.F.R. section 2.101, consisting of “Commercial Computer Software” and “Commercial Computer Software Documentation”. as such terms are defined in 48 C.F.R. section 252.227-7014(a)(5) and 48 C.F.R. section 252.227-7014(a)(1), and used in 48 C.F.R. section 12.212 and 48 C.F.R. section 227.7202, as applicable. Consistent with 48 C.F.R. section 12.212, 48 C.F.R. section 252.227-7015, 48 C.F.R. section 227.7202 through 227.7202-4, 48 C.F.R. section 52.227-14 and other relevant sections of the Code of Federal Regulations, as applicable, BMI’s computer software and computer software documentation are licensed to United States Government end users with only those rights as granted to all other end users, according to the terms and conditions contained in this Agreement. Manufacturer is Brightmail Incorporation, 301 Howard Street, Suite 1800, San Francisco, CA and the manufacturer for the anti-virus software that is integrated with Brightmail’s software product, Symantec Corporation, 20330 Stevens Creek Blvd., Cupertino, CA 95014.

11.9 Third Party Beneficiary. In the event any third party products are incorporated in the Software such as the AV Product, Reseller will enforce the rights of its superior licensors regarding any provisions that are for such superior licensor’s benefit.

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IN WITNESS WHEREOF, the duly authorized representatives of the parties have executed this Agreement as of the Effective Date.

RESELLER	COMPANY
BY:	BY:
NAME:	NAME:
TITLE:	TITLE:

EXHIBIT C

FEES AND PRODUCT DISCOUNT

1. Product: Brightmail Anti-Spam Solution and any subsequent Updates and Upgrades.

2. Product Discount to Reseller: the amount (the “Discount”) representing              % of the then current BMI subscription list price per user per year of the Product, as such may be modified within BMI’s sole discretion from time to time (the per End User price after giving effect to the Discount, the “Discounted Price”).

3. The Fees payable by the Reseller for each Order (the “Initial Fee”) shall equal (A) (1) the total number of End Users multiplied by (2) the Discounted Price, plus (B) the fees for any premium Product Support purchased by the Corporation. Initial Fees will be due and payable upon the effective date of the applicable Subscription Agreement or delivery of the Product, whichever is earlier.

4. The Fees payable by the Reseller for any increase in the number of End User as reported in the Product Report shall equal (A) the product of (i) any such increase in the number of End User and (ii) the Discounted Price.

5. For any renewal, BMI will invoice Reseller within 30 days after (i) BMI has received Reseller’s notice of a Corporation’s renewal, or (ii) a Corporation’s failure to provide notice of its intention to terminate, whichever is earlier.

EXHIBIT D

PRODUCT SUPPORT

BMI offers several support offerings that meet the different needs of our customers. All BMI customers are enrolled in the Standard Service support plan. Customers that require additional services is required to purchase one of the Premium Support offerings. The details of the Brightmail support programs can be founded at http://www.brightmail.com/suppport offerings.html.

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EXHIBIT E

ORDER

Items to include in Reseller’s Purchase Order:

• The Order number,

• Reseller billing information, contact name, address, phone number and email address

• Corporation name, address, phone number, and contact name and email address

• Technical contact name, title, address, and phone number,

• Full Product Description,

• Net Price to BMI and Applicable Minimum Commitments (minimum fee/number of End User per year),

• Subscription Agreement term, include beginning date and end date,

• Corporation’s distribution email address for the provision of Rules and Rule Updates,

• Territory/Location of Software, city and state,

• Method of Payment, and

• MTA and OS.

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EXHIBIT H

ENTERPRISE AGREEMENT.

LICENSE AND SERVICES

ENTERPRISE AGREEMENT

This License and Services Agreement (“Agreement”) is entered into                      (“Effective Date”) by and between Brightmail Incorporated, a California corporation (“BMI”) with principal offices at 301 Howard Street, Suite 1800, San Francisco, CA 94105 and                     , and a                      corporation and its Affiliates (“Company”), with principal offices at                      (collectively referred to as the “Parties”.).

WHEREAS, BMI develops and licenses client-server software, and renders accompanying services, which enable Enterprises to reduce or eliminate unsolicited email messages from their email systems;

WHEREAS, Company, a [Type of business], provides Internet access and electronic mail services to its employees, contractors, and agents;

WHEREAS, Company desires to license BMI’s software and subscribe to its services and BMI desires to grant and render the same; and

NOW THEREFORE, in consideration of the mutual covenants contained herein, the Parties agree to the following terms and conditions, which set forth the rights, duties and obligations of the Parties:

1 DEFINITIONS

1.1 “Affiliates” means (a) any subsidiaries in which Company owns greater than fifty percent (50%) of such entity, and (b) joint ventures in which Company or Company subsidiary or affiliate holds an interest greater than fifty percent (50%) of such entity, provided in all cases that Company shall guarantee the performance of the obligations of its Affiliates and enforce compliance with such obligations on BMI’s and its superior licensor’s behalf.

1.2 “Email Service” means the Company’s email services provided to End Users for the purposes of conducting Company’s internal business and which are enabled via Company’s mail transfer agent (“MTA”) as described in Exhibit A.

1.3 “End Use” is the individual holder, or authorized user of an email Mailbox account or an address (“Email Account”) hosted by Company’s email service to Company’s employees, contractors, and other Company agents.

1.4 “Documentation” is BMI’s standard system guide documentation that outlines the system architecture and its interfaces. It includes comprehensive guides on installation and operations.

1.5 “Email Address” is a name that identifies an electronic post office box on a network where an email can be sent. Every End User has a unique email address, but such End User may not have a Mailbox.

1.6 “IP Rights” means all intellectual property rights in the Software, the Documentation, BMI Trademarks, and trademarks of BMI’s superior licensors, and/or which are derived or arise from the Services, including copyrights, inventions, patents, trade marks, service marks, trade names, moral rights, mask words, trade secrets, goodwill, confidential and proprietary information, compositions and formula, whether created in the United States of America or elsewhere, and all applications for registration and registrations of such rights anywhere in the World.

1.7 “Mailbox (es)” is an area, in memory or on a storage device, where email may be sent, placed, or received by an End User at a designated Email Account. An End User may hold or have authorized use of one or more Mailboxes.

1.8 “Rule(s)” are explicit, conditional statements, or criteria, that is used and created by BMI to detect and filter spam.

1.9 “Rule Update(s)” are current adaptations to explicit conditional statements, or criteria, that is used and created by BMI to detect and filter spam.

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1.10 “Server(s)” Company’s hardware functioning in conjunction with the Software to filter, divert, reject, or discard incoming End User email which is suspected to be spam.

1.11 “Service(s)” is (i) the provision of the Software functionality, including Updates and Upgrades, (ii) the creation of Rules and Rules Updates, and (iii) the provision of “second line” support as described in Exhibit B attached hereto. Services referenced under this Section 1.11 exclude any professional or consulting services.

1.12 “Software” is (i) BMI’s proprietary inbound email-filtering Software to reduce Spam (“AS Product”) and/or Virus (“AV Product”) as set forth in Exhibit A, (ii) any third party software products which may be integrated with BMI’s email-filtering software product, (iii) Updates and Upgrades, and (iv) Documentation. Any Rules. Rule Updates, Updates, and Upgrades that BMI releases become part of the software. The Software is more fully described in Exhibit A.

1.13 “Spam” is the mass electronic distribution of unsolicited, bulk email to individual email accounts or email lists Also referred to as “junk email” or “bulk email”.

1.14 “Updates” are minor updates, error corrections and bug fixes that do not add significant new functionality to the Software, and that are released by BMI or its third party licensors. Updates are designated by an increase to the Software’s release number to the right of the decimal point (e.g., Software 1.0 to Software 1.1). The term Updates specifically excludes Upgrades or new software versions marketed and licensed by BMI as a separate product.

1.15 “Upgrade(s)” are versions to the Software, which add new enhancements to existing functionality or new functionality, if and when it is released by BMI or its third party licensors, in their sole discretion. Upgrades are designated by an increase in the Software’s release number, located to the left of the decimal point (e.g., Software 1.x to Software 2.0). In no event shall Upgrades include any new versions of the Software marketed and licensed by BMI or its third party licensors as a separate product.

1.16 “Virus (es)” is program or code that inserts, replicates, and infects another program, boot sector, partition sector or document that supports macroes. Viruses may be “worms” and “trojan horses”.

2. ENTERPRISE LICENSE GRANT.

BMI grants to Company a non-exclusive, non-sublicensable and non-transferable license during the Term of this Agreement to use the Software and Documentation on Servers, solely in connection with the provision of Email Accounts to End Users as part of the Email Service. The duration and scope of this license is further defined in Exhibit A. Company shall receive the provision of Services along with this license. The license and Services are co-terminus.

3. PROPRIETARY RIGHTS

3.1 Proprietary Rights. Title to and ownership of the Software, Documentation, and other materials and all associated IP Rights related to the foregoing provided by BMI to Company will remain the exclusive property of BMI and/or its third party licensors.

3.2 Proprietary Notices. Company and its employees and agents will not remove or alter any BMI trademarks, trademarks of BMI’s superior licensors or other proprietary notices, legends, symbols, or labels appearing on or in copies of the Software and Documentation or other materials delivered to Company by BMI.

4. NO OTHER RIGHTS.

4.1 Except as expressly provided herein, no right, title or interest in any Software and Documentation is granted by BMI to Company.

5. DELIVERY

5.1 BMI will electronically deliver one copy of the Software and the Documentation to Company. Company will have a maximum of thirty (30) days from the date Company receives the Software to reject for any major nonconformity of the Software to the specifications contained in the Documentation. Any rejection must be in writing stating the reasons for rejection. Company’s exclusive remedy and BMI’s entire liability in the event of a rejection will be prompt correction of such nonconformity.

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6. OWNERSHIP

6.1 Unless otherwise agreed in writing, any programs, inventions, concepts, documentation, specifications or other written or graphical materials and media created or developed by BMI or its. superior licensors during the course of its performance of this Agreement, or any related consulting or professional service agreements, including all copyrights, patents, trade secrets, trademark, moral rights, or other intellectual property rights (“Intellectual Property Right(s)”) associated with the performance of such work shall belong exclusively to BMI or its superior licensors and shall, in no way be considered a work made for hire for Company within the meaning of Title 17 of the United States Code (Copyright Act of 1976).

7. TRADEMARKS

7.1 Grant of Rights. Upon Company’s request and BMI’s consent, Company is hereby granted, throughout the term, a limited non-exclusive, nontransferable license to use those BMI trademarks, trademarks of its superior licensors, logos, service marks, and trade names (collectively called “BMI Trademarks”) in the form provided by BMI in connection with its obligations under this Section 7, and in accordance with the BMI Trademark guidelines or third party licensor trademark guidelines (“Guidelines”) found or referenced at http://www.brightmail.com/trademark.html as updated from time to time. Company agrees that it will not use any BMI Trademarks or third party licensor trademarks in a manner inconsistent with the Guidelines, or register any BMI Trademarks or third party licensor trademarks in Company’s name, or permit any other third party to register any such trademarks.

8 FEES AND PAYMENTS

8.1 Fees. Company will pay to BMI the License and Service fees (“Fees”) in accordance with the provisions of Exhibit A. All Fees are non-refundable.

8.2 Late Payments. All amounts not paid when due under this Agreement will accrue interest at the lesser of one and one-half percent (1.5%) per month or the maximum rate permitted under applicable law. BMI may terminate Services immediately upon Company’s failure to pay the Fees.

8.3 Taxes. All prices are exclusive of all taxes, duties or levies, however they are designated or computed. Company will be responsible for, and pay all taxes based on payments due under this Agreement including, but not limited to, sales, use, or value-added taxes, duties, withholding taxes and other assessments now or hereafter imposed, exclusive of taxes based upon BMI’s net income.

8.4 Company’s Reports of Use. Company shall make such report and certification to BMI as required by Exhibit A attached hereto and in sufficient detail to permit the proper calculation of all Fees owed to BMI. BMI may invoice Company based on previously reported numbers due to Company’s failure to report timely and calculate late fees on any true-ups or late payments due to Company’s failure to report timely. This does not waive Company’s obligation to report annually.

8.6 Audit of Use. Company will maintain records to track the number of End Users. BMI will have the right to audit no more than once per twelve (12) month period throughout the term of the Agreement, to confirm the accuracy of the number of End Users reported to BMI, and compliance with any other terms and conditions of the Agreement. This right will survive one (1) year after termination of the Agreement. Audit will take place during normal business hours and in accordance with Company’s standard security procedures. BMI must give a prior written notice to audit five (5) business days in advance of the desired date. The audit will be conducted at BMI’s expense unless such audit reveals an underpayment to BMI in excess of 5% for the period being audited, in which case Company will bear the expenses of the audit.

9 LIMITED WARRANTY

9.1 Limited Warranties. BMI WARRANTS TO COMPANY THAT THE SOFTWARE, WHEN PROPERLY INSTALLED AND PROPERLY USED, WILL SUBSTANTIALLY CONFORM TO THE SPECIFICATIONS IN THE DOCUMENTATION FOR A PERIOD OF NINETY (90) DAYS FROM THE EFFECTIVE DATE (“WARRANTY PERIOD”). FOR ANY BREACH OF THE WARRANTY CONTAINED IN THIS SECTION 9.1, COMPANY’S EXCLUSIVE REMEDY AND BMI’S ENTIRE LIABILITY, WILL BE PROMPT CORRECTION OF ANY ERROR OR NONCONFORMITY, PROVIDED THAT THE NONCONFORMITY HAS BEEN REPORTED TO BMI BY COMPANY WITHIN THE WARRANTY PERIOD. IN THE EVENT

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BMI FAILURE TO REMEDY ANY ERRORS OR NONCONFORMITIES WITH RESPECT TO EITHER THE AV PRODUCT OR AS PRODUCT, COMPANY MAY TERMINATE THE LICENSE ONLY WITH RESPECT TO THE PRODUCT THAT ARE THE SUBJECT OF THE PARTIAL FAILURE AND RECEIVE A PRO-RATA REFUND FOR SERVICES NOT RENDERED WITH RESPECT TO SUCH AV PRODUCT OR AS PRODUCT DUE TO A BREACH OF THIS WARRANTY. THIS WARRANTY IS MADE SOLELY TO COMPANY AND IS NOT TRANSFERRABLE TO ANY END USER OR OTHER THIRD PARTY.

9.2 WARRANTY DISCLAIMER. BMI LICENSES THE SOFTWARE TO COMPANY ON AN “AS IS” BASIS. THE EXPRESS WARRANTIES SET FORTH IN SECTION 9.1 OF THIS AGREEMENT CONSTITUTE THE ONLY PERFORMANCE WARRANTIES WITH RESPECT TO THE SOFTWARE AND DOCUMENTATION. BMI AND/OR ITS THIRD PARTY LICENSORS MAKE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, WHETHER EXPRESS, IMPLIED OR STATUTORY (EITHER IN FACT OR BY OPERATION OF LAW), AND EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. NEITHER BMI NOR ITS THIRD PARTY LICENSORS WARRANT THAT THE SOFTWARE AND DOCUMENTATION IS ERROR-FREE OR THAT OPERATION OF THE SOFTWARE WILL BE UNINTERRUPTED.

9.3 Company Warranty. Company specifically warrants that it will not process Spam in such a way as to negatively impact the Software and Services, as determined by BMI in its sole Discretion. Specifically, Company agrees that it will not alert the sender of Spam to the presence of the Software and Services.

10 MAINTENANCE AND SUPPORT SERVICES

10.1 BMI and Company agree to provide the respective First Line Support and Second Line Support obligations as defined in Exhibit B.

11 INDEMNITY

11.1 Indemnification by BMI. BMI will defend, indemnify and hold Company harmless from any third-party suit or action against Company to the extent such suit or action is based on a claim that the Software infringes any U.S. patent, copyright, trademark or trade secret or other intellectual property right held by such third party; and BMI will pay those damages finally awarded against Company in any monetary settlement of such suit or action. These obligations do not include any claims that arise from the use of the Software in violation of this Agreement or in combination with third party software or hardware not supplied by BMI, or any modification made to the Software by anyone other than BMI, or any revisions of the Software for which any Updates, fixes or revisions have been made available by BMI to Company if such claims would have been avoided by the installation or use of such Updates, fixes or revisions. The indemnity obligations set forth in this section are contingent upon: (a) Company giving prompt written notice to BMI of any such claim(s); (b) BMI having sole control of the defense or settlement of the claim; and (c) at BMI’s request and expense, Company cooperating in the investigation and defense of such claim(s). In the event that the continued use of the Software is enjoined by a court of competent jurisdiction (the date of such injunction, the “Injunction Date”), BMI, at its election will, at its own cost and expense, either (a) procure for Company the right to continue the use of the Software; (b) modify or replace the Software in such a way that the use thereof does not infringe; or as a last resort in the neither of the foregoing alternatives is reasonably feasible, (c) terminate this Agreement by notice to Company and refund to Company on a pro rata basis Fees paid to BMI for the Software commencing from the Injunction Date.

11.2 Indemnification by Company. Company will defend, indemnify and hold BMI harmless from any third-party claim or suit brought against BMI or its superior licensors, including a claim or suit initiated by an End User, to the extent such suit or action is based on a claim arising from (i) Company’s use of the Software with any hardware or software that infringes the Intellectual Property Right of a third party in the case where the Software alone would not have infringed in the absence of the combination, (ii) any use of the Software by Company which deviates from the provisions of this Agreement, and (iii) a negligent act or omission of Company. Company will pay those damages finally awarded against BMI in any monetary settlement of such suit or action and all associated costs that are specifically attributable to such claim. The indemnity obligations set forth in this section are contingent upon (a) BMI giving prompt written notice to Company of any such claim(s); (b) Company having sole control of the defense or settlement of the claim; and (c) at Company’s request and expense, BMI cooperating in the investigation and defense of such claim(s). To the maximum extent permitted by applicable

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law, this section states the entire indemnification obligations and liability of Company with respect to claims subject to this section.

12 TERM AND TERMINATION

12.1 Term. Unless terminated as set forth herein, this Agreement will commence on the Effective Date, and will continue for the length of time specified in Exhibit A (“Initial Term”). Thereafter, this Agreement will automatically renew on the Effective Date anniversary for additional one (1) year periods unless either Party gives notice of its intent not to renew, at least sixty (60) days prior to the expiration of the Initial Term, or any one (1) year renewal thereof. The Initial Term and any renewals will collectively be referred to as “Term”.

12.2 Termination. If either Party defaults in the performance of any material provision of this Agreement, then the non-defaulting Party may terminate the Agreement upon thirty (30) days written notice if the default is not cured during such thirty (30) day period. Company’s failure to pay Fees when due will constitute a default in the performance of a material provision of this Agreement and BMI may terminate Services for such nonpayment. This Agreement may be terminated by one Party immediately at any time, without notice, upon (i) the institution by or against the other Party of insolvency, receivership or bankruptcy proceedings or any other proceedings for the settlement of such Party’s debts, (ii) such other Party making a general assignment for the benefit of creditors, or (iii) such other Party’s dissolution.

12.3 Effect of Termination or Expiration: Return of Materials. The license granted in Section 2 and Services will immediately terminate upon the effective date of the termination or expiration. Within thirty (30) calendar days after termination or expiration of this Agreement, Company will deliver to BMI or destroy all copies of the Software and furnish to BMI a certification signed by an officer of Company verifying that such delivery or destruction has been fully affected.

12.4 Alteration to the Software. BMI shall have the right to make any modifications and Upgrades to the Software including, without limitation, substituting the Virus Engine of its existing licensor (the “Combined BMI/Symantec Product”), Symantec Corporation, that is incorporated in the AV Product with anti-virus products of other third parties (the “AV Upgrade”). BMI shall make available such AV Upgrade to Company and in connection with the AV Upgrade, Company shall install the AV Upgrade and de-install the Combined BMI/Symantec Product and destroy all copies of such product and furnish to BMI a certification signed by an officer of Company verifying that such delivery or destruction has been fully affected. Upon installation of the AV Upgrade, the license regarding the Combined BMI/Symantec Product will be terminated and the AV Upgrade will be substituted in its place as the AV Product.

13 CONFIDENTIALITY

13.1 Non-Disclosure. BMI and Company will, from time to time, in connection with the performance of this Agreement, disclose Confidential Information to each other. Each Party agrees to hold in confidence such Confidential Information of the other Party to the same extent that it protects its own similar Confidential Information (and in no event using less than a reasonable degree of care) and to use such Confidential Information only as permitted under this Agreement. The receiving Party will not provide the Confidential Information of the disclosing Party to any third party. For purposes of this Agreement “Confidential Information” means information of a party marked “Confidential” reasonably considered by the disclosing party to be of a proprietary or confidential nature; provided that the Software, Services and Documentation, email probe addresses, information disclosed in design reviews and any pre-production releases of the Software provided by BMI will be expressly designated Confidential Information whether or not marked as such. Each Party agrees to take all reasonable precautions to prevent any unauthorized disclosure or use of Confidential Information.

13.2 Exceptions. The foregoing restrictions will not apply with respect to any Confidential Information which (i) was or becomes publicly known through no fault of the receiving Party; (ii) was rightfully known or becomes rightfully known to the receiving Party without confidential or proprietary restriction from a source other than the disclosing Party; (iii) is independently developed by the receiving Party without reference to the Confidential Information; (iv) is approved by the disclosing Party for disclosure without restriction in a written document which is signed by a duly authorized officer of such disclosing Party; and (v) the receiving Party is legally compelled to disclose; provided that the receiving Party has given the disclosing Party reasonable notice and opportunity to contest such compulsion to disclose.

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13.3 Restrictions. Except as specifically provided for in this Agreement, Company will not (i) modify, transfer, resell for profit, distribute, copy, enhance, adapt, translate, decompile, reverse engineer, disassemble, decrypt or otherwise determine, or attempt to derive source code for any Software or any internal data files generated by the Software or to create any derivative works based on the Software and Documentation or Documentation, and agrees not to permit or authorize anyone else to do so, or (ii) host the Software for download by any third parties. Company will not authorize or enable third parties to determine or attempt to determine the filtering rules used by the Software, under any circumstances.

14 GENERAL PROVISIONS

14.1 Notices. Any notice required or permitted by this Agreement must be in writing and must be sent by facsimile, recognized commercial overnight courier, or United States registered or certified mail, and must be evidenced by a delivery confirmation receipt, however sent. Notices will be addressed as set forth in Exhibit B.

14.2 Waivers and Amendment. The waiver by either Party of a breach of or a default under any provision of this Agreement will not be construed as a waiver of any subsequent breach of the same or any other provision of the Agreement, nor will any delay or omission on the part of either Party to exercise or avail itself of any right or remedy that it has or may have hereunder operate as a waiver of any right or remedy. No amendment or modification of any provision of this Agreement will be effective unless in writing and signed by a duly authorized signatory of BMI and Company.

14.3 Assignment; No Conflict of Interest. The Parties may not assign or otherwise transfer any of its rights, obligations or licenses hereunder, whether by law or otherwise, without the prior written consent of the other Party. Notwithstanding the foregoing, BMI may assign this Agreement in connection with a sale of all or substantially all of its assets, merger or consolidation. Any assignment contrary to this provision shall be void and of no effect. Subject to the foregoing, this Agreement will be binding upon and will inure to the benefit of the parties and their permitted successors and assigns.

14.4 Representations. Each Party represents that it has full power and authority to undertake the obligations as forth in this Agreement, and that each Party’s performance under this Agreement does not and will not violate any third-party agreements, or understandings.

14.5 LIMITATION OF LIABILITY. IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY LOSS OF PROFITS, LOSS OF BUSINESS, COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, LOSS OF USE OR DATA, INTERRUPTION OF BUSINESS, OR FOR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, EVEN IF SUCH PARTY RECEIVED ADVANCE NOTICE OF THE POSSIBILITY OF SUCH DAMAGES, PROVIDED, HOWEVER, THAT LIMITATIONS SET FORTH IN THIS SECTION SHALL NOT APPLY TO ANY BREACH BY COMPANY OF SECTIONS 3, 7 OR 13 HEREUNDER. IN NO EVENT SHALL BMI’S AGGREGATE LIABILITY ARISING UNDER ANY PROVISION OF THIS AGREEMENT, REGARDLESS OF WHETHER THE CLAIM FOR SUCH DAMAGES IS BASED IN CONTRACT, TORT, OR OTHER LEGAL THEORY, EXCEED THE TOTAL AMOUNT PAID TO BMI PURSUANT TO THIS AGREEMENT DURING THE TWELVE (12) MONTHS PRIOR TO THE EVENT GIVING RISE TO SUCH LIABILITY. THE PARTIES AGREE THAT THIS SECTION 14.5 REPRESENTS A REASONABLE ALLOCATION OF RISK.

14.6 Governing Law. This Agreement will be governed in all respects by the substantive laws of the State of California, United States of America (excluding conflict of laws rules) as applied to agreements entered into and to be performed entirely within the State of California between California residents, without regard to the U.N. Convention on Contracts for the International Sale of Goods. Any dispute regarding this Agreement will be subject to the exclusive jurisdiction of the California state courts in and for San Francisco County, California (or, if there is exclusive federal jurisdiction, the United States District Court for the Northern District of California), and the Parties agree to submit to the personal and exclusive jurisdiction and venue of these courts.

14.7 Export Controls. Company understands and acknowledges that the Software is subject to regulation and licensing requirement imposed by agencies of the U.S. government, including the U.S. Department of Commerce, which prohibit export, reexport or diversion of certain products and technology to certain countries and for particular end use applications without government approval.

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14.8 Relationship of the Parties. The relationship of the Parties under this Agreement is that of independent contractors, and no agency, partnership, joint venture, or employment is created as a result of this Agreement and neither Company nor its agents have any authority of any kind to bind BMI in any respect whatsoever.

14.9 Injunctive Relief. Company acknowledges that any breach of the provisions of Section 2 or 13 may cause BMI irreparable harm and significant injury to an extent that may be extremely difficult to ascertain. Accordingly, Company agrees that BMI will have, in addition to any other right remedies available to it at law or in equity, the right to seek injunctive relief to enjoin any breach or violation of such sections.

14.10  Headings. The captions and section and paragraph headings used in this Agreement are inserted for convenience only and will not affect the meaning or interpretation of this Agreement.

14.11  Severability. If the application of any provision or provisions of this Agreement to any particular facts of circumstances will be held to be invalid or unenforceable by any court of competent jurisdiction, then: (a) the validity and enforceability of such provision or provisions as applied to any other particular facts or circumstances and the validity of other provisions of this Agreement will not in any way be affected or impaired thereby; and (b) such provision or provisions will be reformed without further action by the Parties, to and only to, the extent necessary to make such provision or provisions valid and enforceable when applied to such particular facts and circumstances; and, in any event, the remainder of this Agreement will remain in full force and effect.

14.12  Force Majeure. Either Party will be excused from any delay or failure in performance hereunder, except the payment of monies by Company to BMI, caused by reason of any occurrence or contingency beyond its reasonable control, including but not limited to, acts of God, earthquake, labor disputes and strikes, riots, war, novelty of product manufacture or other unanticipated product development problems, and governmental requirements. The obligations and rights of the Party so excused will be extended on a day-to-day basis for the period of time equal to that of the underlying cause of the delay; provided that such Party will give notice of such force majeure event to the other Party as soon as reasonably possible.

14.13  Identification. BMI will have the right to use Company’s name in connection with BMI’s customer reference list for the sole purposes of identifying Company as a customer of BMI.

14.14  Entire Agreement. The parties acknowledge that it has read this Agreement and all Exhibits, understands them, and agrees to be bound by their terms. This Agreement, including the Exhibits hereto, constitutes the entire agreement between the Parties concerning the subject matter hereof and supersedes all proposals or prior agreements whether oral or written, and all communications between the Parties relating to the subject matter of this Agreement and all past courses of dealing or industry custom. The terms and conditions of this Agreement will prevail, notwithstanding any variance with any purchase order or other written instrument submitted by a Party, whether formally rejected by the other Party or not. The preprinted terms of any Company purchase order issued hereunder will be deemed stricken and of no force or effect. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which taken together will constitute one and the same instrument.

14.15  U.S. Government Restricted Rights. RESTRICTED RIGHTS LEGEND. All BMI products and documentation are commercial in nature. The software and software documentation are “Commercial Items”, as that term is defined in 48 C.F.R. section 2.101, consisting of “Commercial Computer Software” and “Commercial Computer Software Documentation”, as such terms are defined in 48 C.F.R. section 252.227-7014(a)(5) and 48 C.F.R. section 252.227-7014(a)(1), and used in 48 C.F.R. section 12.212 and 48 C.F.R. section 227.7202, as applicable. Consistent with 48-C.F.R. section 12.212, 48 C.F.R. section 252.227-7015, 48 C.F.R. section 227.7202 through 227.7202-4,48 C.F.R. section 52.227-14 and other relevant sections of the Code of Federal Regulations, as applicable, BMI’s computer software and computer software documentation are licensed to United States Government end users with only those rights as granted to all other end users, according to the terms and conditions contained in this Agreement. Manufacturer is Brightmail Incorporation, 301 Howard Street, Suite 1800, San Francisco, CA.

14.16  Third Party Beneficiary. In the event any third party products are incorporated in the Software such as the AV Product, BMI will enforce the rights of its superior licensor regarding any provisions that are for such superior licensor’s benefit.

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14.17  Survival. The respective rights and obligations of BMI and Company under the provisions of sections 1, 3, 4, 6, 8, 9.2, 12.3, 13, and 14 shall expressly survive any termination or expiration of this Agreement.

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IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement effective as of the Effective Date.

Attachments: Exhibit A. License, and Exhibit B. Services

BRIGHTMAIL INCORPORATED	COMPANY
By:	By:
Name:	Name:
Title:	Title:
Date:	Date:

COMPANY PURCHASE ORDER NUMBER:

EXHIBIT A

LICENSE

1. DEFINITIONS. Capitalized terms used in this Exhibit A but not otherwise defined herein shall have the meanings given in the Agreement.

2. COMPANY WILL RECEIVE THE FOLLOWING:

a. The Software:

(i) Software: Anti-Spam Solution, release 4.x or higher.

(ii) Documentation: Installation and Operations Guide and Security White Papers

(iii) Services

3. LICENSES GRANTED TO COMPANY FOR USE ON COMPANY’S MAIL PLATFORM.

a. Initial Term:              Years from the Effective Date.

b. Territory: United States

c. The licenses granted by BMI to Company may only be used on the following:

(i) Company’s MTA:             

(ii) Company’s Operating System (“OS”):              Solaris

4. FEES

a. Minimum Commitment:              End Users per year or $             of Annual License Fee.

b. Price per End Users: US $            , exceeding the Minimum Commitment will be used to calculate Adjustments (as defined below).

In the event it is necessary to allocate the Fees for each of the AV Product and AS Product, * of the per End User price shall be allocated to the AV Product and the remaining * shall be allocated to the AS Product.

5. REPORT OF USE

a. On or before the Effective Date, Company will report to BMI the total number of End Users existing on its Email Services.

b. Within five (5) days of each anniversary of the Effective Date, Company will submit an annual report specifying the total number of End Users existing on the Company’s Email Services on the applicable anniversary (“Annual Report”) and shall within five (5) days after the end of any given calendar quarter, submit a report if the number of End Users exceeds the number of End Users for which Company has

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been invoiced,. Company agrees that it shall not reduce or eliminate the number of End Users for the purpose of avoiding or reducing its payment obligations to BMI under the Agreement.

6. PAYMENT TERMS

a. Fees for the Initial Term will be due and payable upon the Effective Date. Such Fee will be based on the greater of the total number of End Users reported on or before the Effective Date or the Minimum Commitment.

b. For any renewal, BMI will invoice Company within thirty (30) days of Company’s notice to renew or its failure to provide notice if its termination, whichever is earlier.

c. If the number of End Users reported in the Annual Report exceeds the number of End Users for which Company has already paid a Fee (the “Additional End Users”), or if during any quarter, the number of End Users exceeds the number of End Users for which has been invoiced by BMI, Company will report such number to BMI in accordance with the terms and conditions of this Agreement and BMI shall invoice Company for the difference (“Adjustments”). Adjustments will be calculated by multiplying the number of Additional End Users by the Annual fee per End User. BMI will invoice Company for such Adjustments to the Fees within thirty (30) days of Company’s report to BMI.

d. Company shall pay all invoices within thirty (30) days from date of invoice.

e. All payments will be made in U.S. Dollars.

7. NOTICES. Below is the contact information for the Parties:

BMI NOTICE INFORMATION		COMPANY NOTICE INFORMATION
Contract Contact:		Contract Contact:
Business Contact:		Business Contact:
Technical Contact:		Technical Contact:
Billing Contact:	*	Billing Contact:	[Name]
	*		[Phone]
	*		[Email]
			[Address, if different]
Address:	301 Howard Street, Suite 1800 San Francisco, CA 94105	Address:
Main Phone Number:	*	Main Phone Number:
Billing Phone Number:	*	Billing Phone Number:
Fax Phone Number:	*	Fax Phone Number:

EXHIBIT B

SERVICES

1. DEFINITIONS. Capitalized terms used in this Exhibit B but not otherwise defined herein shall have the meanings given in the Agreement.

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2. SECOND LINE SUPPORT.

A. Support Hours; Designated Contact. BMI will provide up to twenty-five (25) Support Incidents (as defined in Section 2(C) below) to Company’s designated technical personnel “Second Line” telephone support Monday through Friday 6:00am to 6:00pm PST and such other standard support which description can be found at http://www.brightmail.com/support offerings.html. Company shall designate only one technical personnel and only such named personnel shall be entitled to receive technical support from BMI. Company may contact BMI support at *, or call US Toll Free at *, or go to our support site at *.

B. Support. Second Line support consists of the following:

a. Prepare and make Rules, Rule Updates, Updates and Upgrades available to a Company for download.

b. Respond to Company’s requests for escalation as it relates to the Service or Software.

c. Acknowledge and respond accordingly to Company’s notification of any scheduled MTA maintenance and Architecture changes.

d. Resend Rule and Rule Updates upon Company’s request.

e. Work with Company to isolate and determine any issues related to network transmission errors.

f. Take appropriate corrective action or provide workarounds on any identified Software Errors, where reasonably available to BMI. Error classification is determined by BMI, taking into consideration the input and suggestions of Company. An “Error” is an error in the Software about which Company can provide BMI with enough information to reproduce the error.

Company shall and shall cause its personnel to, reasonably cooperate with BMI in BMI’s efforts to provide technical support hereunder,

C. Scope. Company shall be entitled to up to twenty-five (25) incidents of BMI support (“Support Incidents”). A Support Incident is a technical support issue that requires BMI technical personnel to resolve and includes all follow-up until the incident is resolved. A support incident does not include any Errors.

D. Escalation.

The parties agree to use the following procedure to resolve support/maintenance problems with respect to the Software:

(i) Company will first attempt to isolate the source and nature of the problem using resources reasonably at its disposal. If investigation indicates the problem may be caused by an Error in the Software, Company will collect pertinent information necessary for resolution, and use reasonable efforts to resolve the problem. Company will make available to BMI all requested information to enable BMI to resolve the issue. If Company can not resolve the problem, it will collect the pertinent information that may assist and expedite resolution, and then report the problem and information by telephone or in writing (email accepted) to BMI as set forth herein.

(ii) BMI and Company shall reasonably and in good faith assign a priority to the Error. BMI shall use reasonable efforts in responding to the Error with a Software workaround or patch, closing the problem with a Software Update or Upgrade, and reporting status, as follows:

Priority	Response Time	Work Around	Closure Time (Software Fix)	Status Report
Critical	One Hour	Twenty-four (24) Hours	Ten (10) Business Days	Weekly
Non-Critical	Next Business Days	Eight (8) Business Days	First Major or Minor Software Release after the next ninety (90) Business Days	At Company’s request

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(iii) It is recognized by Company that such level of effort will not always result in a problem’s resolution according to the above timetable. For the purpose of this paragraph: “Critical” shall mean use of the Software is severely impacted or stopped; “Non-Critical” shall mean use of the Software is ongoing; and “Business Day” shall mean a day during which BMI conducts its regularly scheduled business operations, excluding holidays observed by BMI.

(iv) Response time is the time in which BMI provides acknowledgement of Company’s request. Such time period begins upon the time logged for Company’s initial contact to BMI and provides BMI with the information necessary to assist and expedite resolution.

(v) Work Around Time is the time in which BMI provides at least a temporary remedy (“Work Around”). Such time period begins upon the beginning of the Response Time, whether or not BMI has contacted Company.

(vi) Closure time is the time in which BMI provides a permanent remedy to an Error. Such time period begins upon the beginning of the Response Time, whether or not BMI has contacted Company.

If at any time throughout the escalation process, Company has a question concerning the escalation process Company may contact the Director of Customer Support at *.

3. FIRST LINE SUPPORT. Company agrees to provide full “First Line” customer support to End Users and acknowledges that BMI will not be responsible for providing any such services. Company will ensure that a sufficient number of its employees are trained to provide competent First Line End User support, as follows:

a. Maintain Servers.

b. Monitor and respond to alarms associated with the Software.

c. Notify BMI of suspected Software bugs

d. Provide seventy-two (72) hour notification to BMI of any scheduled mail center maintenance that may impact Service.

e. Notify BMI of any fundamental changes in Company’s Architecture that may impact the Software and Service.

f. Provide BMI with the information that is needed by BMI at its reasonable request, in order to provide Company with any technical and customer support services herein.

g. Provide BMI with remote access to Company’s Network for support purposes.

4. ERROR CORRECTIONS. BMI shall have no obligation to correct all errors in the Software. Upon identification of any error, Company shall notify BMI of such error and shall provide BMI with enough information to reproduce the error.

5. OBSOLESCENCE. BMI will provide technical support for the then current production version of the Software (the “Current Version”) and the version immediately prior to the Current Version (the “Prior Release”) (e.g., A version is characterized by an “n.n” format), provided however, that BMI’s obligation to support the Prior Release shall terminate twelve (12) months after the first commercial release of the Current Version. For example, if 5.0 is the Current Version, then versions 5.n and 4.n are supported. Support for version 4.n will be stepped down twelve (12) months following the release of 5.0.

6. EXCLUSIONS. BMI shall not be responsible for correcting any errors not reproducible by BMI on the unmodified Software or Errors caused by: (i) Company’s failure to implement all Updates or Upgrades made available to Company by BMI, (ii) changes to the operating system or environment which adversely affect the Software, (iii) any alterations of or additions to the Software made by parties other than BMI, (iv) use of the Software in a manner for which it was not designed, (v) accident, negligence, or misuse of the Software, or (vi) other software products not supplied by BMI.

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EX-10.10.2

EXHIBIT 10.10.2

AMENDMENT TWO TO

AMENDED AND RESTATED SYMANTEC SERVICE PROVIDER AGREEMENT

This Amendment Two to the Amended and Restated Symantec Service Provider Agreement (the “Amendment Two”), dated March 22, 2004 (the “Amendment Two Effective Date”), is entered into between Brightmail Incorporation (“Brightmail”) and Symantec Corporation and Symantec Limited (collectively and individually “Symantec”). This Amendment Two amends the Amended and Restated Symantec Service Provider Agreement, with an Amended Date of March 28, 2003, between the Parties (the “Agreement”). All capitalized terms not defined herein shall have their respective meanings as set forth in the Agreement.

NOW THEREFORE, in accordance with Section 11(a) of the Agreement, the parties agree to amend the Amended Agreement as follows:

1. Extension of Enterprise License. Brightmail and Symantec agree that the following provision shall replace all provisions in the Agreement, as amended, relating to the licensing of the Licensed Product to Enterprises, regardless of whether such Enterprise may be considered an Existing Business or a New Enterprise Business. Symantec hereby approves the extension for a period of one (1) year from the Amendment Two Effective Date, of Brightmail’s right to distribute the Licensed Product, as part of a fully integrated product with the BMI Product, to Enterprises, whether classified as Existing Business or New Enterprise Business, with the sole purpose of providing the BMI Service. Any further extensions of the foregoing right must be by written amendment signed by both Parties. Any Enterprises that express an interest in purchasing the Licensed Product as a separate product will be referred to Symantec immediately as solely a Symantec business opportunity, without further interaction on such subject by Brightmail.

2. Current Version. Pursuant to Section X.1(e), the Licensed Product shall be SAV Sean Engine version 4.3 within the next twelve (12) months.

3. General Provisions. Except as expressly amended by this Amendment Two, this Agreement is in all respects ratified, confirmed and approved and all the terms, provisions and conditions set forth in the Amended Agreement, which are not specifically modified by Amendment Two shall be and remain in full force and effect. The failure of either party to enforce at any time or for any period of time any provision of the Agreement (as amended by Amendment Two) shall not be construed as a waiver of such provision or of the right of such party thereafter to enforce such provision. In the event of any conflict between the meaning of the terms and conditions of the Amended Agreement and Amendment Two, the terms and conditions set forth in Amendment Two shall govern.

4. Counterparts. This Amendment Two may be executed in any number of counterparts, each of which when so executed will be deemed an original, and all of which together, shall constitute one and the same agreement.

WITNESS the date execution hereof by authorized representatives of the parties identified below.

SYMANTEC CORPORATION		SYMANTEC LIMITED
By:	/s/ Allan Peters	By:	/s/ Art Courville
Name:	Allan Peters	Name:	Art Courville
Title:	V.P. Enterprise Sales	Title:	Sr. VP General Counsel
Date:	March 22, 2004	Date:	March 22, 2004

BRIGHTMAIL INCORPORATED
By:	/s/ Michael Irwin
Name:	Michael Irwin
Title:	CFO
Date:	3/25/04

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EX-10.11

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EXHIBIT 10.11

CONTRACT NO             

SOFTWARE DEVELOPMENT AND LICENSE AND SERVICES AGREEMENT

This Software Development and License and Services Agreement (the “Agreement”) is made effective as of June 20, 2002 (the “Effective Date”), by and between MICROSOFT CORPORATION, a Washington corporation, with its principal offices at One Microsoft Way, Redmond, WA 98052 (“Microsoft” or “MS”), and BRIGHTMAIL, INC., a California corporation, with its principal offices at 301 Howard Street, Suite 1800, San Francisco, CA 94105 (“BI”) (each a “Party” and collectively, the “Parties”).

RECITALS

WHEREAS, Microsoft owns and operates (i) a public email service currently known as “Hotmail,” with a home page currently located at http://www.hotmail.com, (ii) other Consumer Email Services that as of the Effective Date operate on the same system of email servers as Hotmail; and (iii) other Consumer Email Services that after the Effective Date, Microsoft may migrate to and/or integrate with the Hotmail system of email servers (referred to collectively, the “Microsoft Email Services”, and individually, a “Microsoft Email Service”);

WHEREAS, Microsoft desires to have the right to use, implement, offer, provide and/or make available to users of Microsoft Email Services (collectively, “Hotmail Users”) software and services that can be used to monitor, manage and filter Spam;

WHEREAS, BI is in the business of providing software (including Rules and Rules Updates) and services, which are capable of monitoring, managing and filtering Spam on web-based properties and services in a timely and efficient manner;

WHEREAS, BI has the necessary technical capability and expertise to provide Microsoft with versions of such software and services capable of monitoring, managing and filtering Spam on Hotmail, MSNIA and other Microsoft Email Services; and

WHEREAS, the Parties desire to enter into an agreement whereby BI shall develop for Microsoft and license to Microsoft such software (including Rules and Rule Updates) and provide to Microsoft such services in accordance with the terms and conditions set forth in this Agreement.

MICROSOFT CONFIDENTIAL

CONFIDENTIAL TREATMENT REQUESTED

NOW THEREFORE, in consideration of the premises, the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged and accepted, BI and Microsoft hereby agree as follows:

AGREEMENT

1. DEFINITIONS

1.1 Defined Terms. The capitalized terms contained and used in this Agreement has the meanings ascribed to them hereunder, including in the text and in Exhibits A and B.

1.2 Rules of Construction. The words “hereby,” “herein,” “hereunder” and words of similar import refer to this Agreement as a whole (including any Appendices, Attachments, Exhibits and Schedules hereto) and not merely to the specific Section, paragraph or clause in which such word appears.

2. DEVELOPMENT, DELIVERY, ACCEPTANCE

2.1 Development and Delivery. In consideration of the payment of the non-recurring engineering fees payable by Microsoft pursuant to section I of Exhibit D, BI shall develop for Microsoft the Initial Software in accordance with the specifications set forth in Exhibit B (the “Specifications”) and on or before the associated dates set forth in Exhibit B or such other dates as the Parties may agree upon in writing.

2.2 Custom Work.

(a) Specification for Custom Work. BI shall develop for Microsoft the Custom Work in accordance with the Specifications, and deliver the Custom Work on or before the associated date set forth in Exhibit B or such other dates as the Parties may agree upon in writing.

(b) Acceptance. Each Delivery of Custom Work shall be subject to the evaluation and acceptance procedures set forth in Section 2.5.

2.3 Installation Services. Upon each delivery of Software, BI shall install and integrate the Software with the MS Servers. BI shall provide all reasonably necessary testing, debugging, initial integration, and any required fixes of the Software until functionality and scalability of the Software is demonstrated to Microsoft’s satisfaction (collectively, the “Installation Services”). BI shall provide such Installation Services through the Launch Date or until such earlier date as Microsoft may notify BI in writing that the Installation Services have been completed to Microsoft’s satisfaction. Without limitation to the foregoing, BI shall provide Microsoft with sufficient professional service assistance to test and verify that all Software functions in accordance with the Specifications.

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2.4 Enhancements.

(a) BI shall promptly notify Microsoft of the availability and purpose of each Enhancement associated with the Software, or with any substantially similar anti-Spam product or service that BI distributes, offers for sale, sells, licenses, markets, promotes, displays, transmits, or otherwise makes available for commercial use. Microsoft has the right to request a copy of each such Enhancement at any time after its receipt of notice of the availability and purpose of such Enhancement. Within ten (10) days of BI’s receipt of such request from Microsoft, BI shall deliver such Enhancement to Microsoft, and Microsoft has the right to test such Enhancement and request that BI make any necessary modifications thereto to cause such Enhancement to conform to the Specifications.

(b) In addition to BI’s obligations under Section 2.4(a), upon Microsoft’s request, BI shall develop, in accordance with such request, other Enhancements for the Software to address or otherwise accommodate any additions, deletions, modifications, updates, upgrades or changes necessary to remain current with the Windows 2000 Operating System, NET Server, or any future Microsoft operating system, used with Hotmail, MSNIA or other Microsoft Email Services. Microsoft shall reasonably support BI’s performance of its obligations under this Section 2.4(b) by providing beta versions of any of the foregoing promptly upon BI’s request after Microsoft makes such beta versions generally available. Unless otherwise agreed by the Parties in writing, BI shall deliver each such Enhancement to Microsoft no later than thirty (30) days following Microsoft’s request for such Enhancement. Upon each such delivery Microsoft has the right to evaluate such Enhancement in accordance with Section 2.5.

(c) Unless otherwise specified in writing by Microsoft, all Enhancements shall be delivered by BI to Microsoft via a secure File Transfer Protocol.

2.5 Evaluation and Acceptance.

(a) Acceptance. Upon each delivery of Software (including the Initial Software, Custom Work and each Enhancement, and any fix or work-around relating to any of the foregoing required by the following provisions of this Section 2.5, but excluding Rules and Rule Updates) and/or completion of Installation Services, Microsoft shall evaluate such Software and notify BI if Microsoft determines that such Software contains one or more Errors.

(b) Failure to Deliver or Fix Initial Software. If Microsoft notifies BI of any Error in any of the Initial Software BI shall deliver fixed Software or a

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workaround to Microsoft within fifteen (15) days of its receipt of such notice. Microsoft shall evaluate such fixed Software or work-around and notify BI if Microsoft determines that such fixed Software or work-around contains one or more Errors.

(c) Failure to Fix Enhancements. If at any time during the Term Microsoft finds any Major Error in an Enhancement provided by BI, then BI shall have a period of fifteen (15) days to provide a corrected Enhancement or a work-around, and Microsoft may * the * in accordance with * provides a corrected Enhancement or a work-around. If Microsoft finds any Minor Error in an Enhancement provided by BI, then BI shall have a period of thirty (30) days to provide a corrected Enhancement or a work-around, and Microsoft may * in accordance with * provides a corrected Enhancement or a work-around. Upon correction of a Major or Minor Error, within the applicable correction period, Microsoft shall *. If BI does not provides a corrected Enhancement or a work-around within the applicable correction period, then Microsoft shall * to * and BI shall * to *.

2.6 Design Review & Specifications Changes. The Parties may mutually agree in writing upon additions, deletions and other changes to the Software which may affect the Specifications at any time during the Term; provided, however, such additions, deletions and other changes to the Software shall be provided by BI to Microsoft * to Microsoft, unless otherwise agreed to in writing by the Parties.

2.7 User Interface. Microsoft has the right, but not the obligation, to develop and use a user interface for the Software to facilitate access and use of the Software and Filtering Functionality by Hotmail Users (a “User Interface”). Microsoft shall determine, in its sole discretion, the design, development, features and functionality of such User Interface and has sole control over all decisions relating to such User Interface, including all decisions relating to the desirability or need for such User Interface. Nothing herein obligates BI to create or provide to Microsoft any User Interface.

2.8 Reporting Requirement. At each Quarterly Steering Meeting, BI shall provide written reports to Microsoft describing in reasonable detail all Enhancements that have been developed by or on behalf of BI during the quarter. BI shall also notify Microsoft of any new Enhancement within fifteen (15) days after BI makes such Enhancement available for commercial use.

3. LAUNCH AND INTEGRATION WITH MSNIA

3.1 Launch of Hotmail Services. At Microsoft’s sole option and discretion, Microsoft may use the Software to make Filtering Functionality generally available to any

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Hotmail Users. The Launch Date shall be the first day on which Microsoft, in its sole discretion, first uses the Software to make Filtering Functionality generally available to Hotmail Users. Provided that, if the Launch Date does not occur by the deadline of *, Microsoft may * upon * to BI and upon * BI shall * Microsoft *. And further provided that:

(a) Microsoft has given BI notice of the completion (conforms to Specifications with no Major Errors) of the of Installation Services as provided in Section 2.3; and

(b) deployment of the Software and/or Filtering Functionality is * by * attributable to

(i) the Software and/or Filtering Functionality;

(ii) the deployment of the Software and/or Filtering Functionality thereof on the MS Servers; and/or

(iii) or the servers on which the Software and/or Filtering Functionality is deployed (e.g., * in * to the required *);

then * days after the Effective Date, the * service fees set forth in part II of Exhibit D shall become payable beginning on, and thereafter be counted from, such *.

3.2 Integration of MSNIA and/or Other Consumer Email Services. At Microsoft’s sole option and at is discretion, Microsoft may transfer the email accounts of users of MSNIA (“MSNIA Users”) and/or other Consumer Email Services to migrate such accounts to and/or integrate them with the Microsoft Email Services. Thereafter, such accounts may receive services under this Agreement. Such transfer shall * the * to BI pursuant to Section 6. Microsoft agrees that if the integration contemplated in this Section 3.2 is not completed prior to the scheduled expiration of the MSNIA Agreement, Microsoft hereby waives its right under Section 13.1 of the MSNIA Agreement to extend the MSNIA Agreement for a Renewal Term.

3.3 Termination of MSNIA Agreement. As of the Launch Date the fees payable under the MSNIA Agreement between MSN, LLC and Brightmail, entered on September 30, 2000 (the “MSNIA Agreement”) shall cease to accrue and shall no longer payable, and upon completion of the transfer of MSNIA Users to services provided under this Agreement, each party agrees that the MSNIA Agreement shall terminate on the date the transfer is completed by Microsoft. Such transfer is to be completed within one (1) year after the Effective Date. As of the Launch Date the “Letter of Permission” by which Microsoft granted BI certain rights to use certain

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Microsoft logos in connection with the MSNIA Agreement will automatically terminate.

3.4 Microsoft Acquisition of Other Services. If Microsoft acquires a Person that is a customer of BI, and Microsoft does not transfer those users to the MS Servers, thereby requiring BI to maintain the support and service of that other Person’s system, then those users would not be provided service under this Agreement. If Microsoft transfers those users to the MS Servers, then BI shall support such additional users under this Agreement * to Microsoft. Notwithstanding the foregoing, nothing in this Section 3.4 is to be interpreted to mean that Microsoft or the acquired Person may not terminate or cancel any such agreement in accordance with its terms.

3.5 Integration of Packaged MSN Email Service. At Microsoft’s sole option and discretion, Microsoft may transfer to and/or integrate with the Microsoft Email Services one or more Packaged MSN Email Services. Thereafter, such mailboxes may receive services under this Agreement, * to the * to BI pursuant to Section 6. “Packaged MSN Email Services” means consumer email services that are:

(a) offered by a third party under such third party’s own domain (e.g., name@thirdparty.com or foo@*.com);

(b) operated by Microsoft for such third party using the MS Servers as part of a larger business arrangement between Microsoft and the third party; and

(c) such business relationship is associated with a Hotmail or MSN brand, trademark or servicemark.

By way of example and not limitation, Packaged MSN Email Service would include operation on the MS Servers of mailboxes for a * where Microsoft also provides * accessible via such *, or for a * in conjunction with an agreement for that * to distribute the * to its users through its * (e.g., *). Additionally, personal domains (e.g., foo@yourname.com) that Microsoft makes available to Hotmail Users shall be considered a Packaged MSN Email Service.

3.6 Integration of Private Label Email Services. Microsoft may also, at its sole option and discretion, transfer to and/or integrate with the Microsoft Email Services one or more Private Label Email Services. Thereafter, such mailboxes may receive services under this Agreement, and Microsoft shall pay an additional service fee to BI in the amount * for each Private Label Email Service mailbox. “Private Label Email Services” means consumer email services that are:

(a) offered by a third party under such third party’s own domain (e.g., name@thirdparty.com);

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(b) operated by Microsoft for such third party using the MS Servers as a stand-alone service not connected with any other Microsoft product or service; and

(c) not associated with any Hotmail or MSN brand, trademark or servicemark.

By way of example and not limitation, Private Label Email Service would include operation on the MS Servers of mailboxes for a * where Microsoft provides only the mailboxes and does not provide any content or other Microsoft services and products (e.g., *).

4. RULES AND RULE UPDATES

4.1 Rules and Rule Updates. BI acknowledges and agrees that (a) the Software cannot provide Filtering Functionality to Microsoft or Hotmail Users unless BI develops Rules and Rule Updates for use in conjunction with the Software and promptly makes such Rules and Rule Updates available to Microsoft via the designated http server; (b) a positive customer experience by Hotmail Users is essential for the effective functioning of the Microsoft Email Services and the Filtering Functionality; and (c) Microsoft has the right, in its sole discretion, to monitor and measure the level of satisfaction of Hotmail Users with respect to the Software and the Filtering Functionality. Microsoft shall have sole control over all aspects of such surveys.

4.2 Delivery of Rules and Rule Updates. On the Effective Date, BI shall deliver all Rules and Rules Updates that exist as of the Effective Date to Microsoft, in a format acceptable to Microsoft. In addition, BI shall make all other Rules and Rule Updates available to Microsoft via the designated http server as soon as such Rules and Rule Updates are available for commercial use. BI shall cause each Rule and Rule Update to include a verification mechanism, which verification mechanism shall verify immediately for BI whether Microsoft has downloaded such Rule or Rule Update. In the event BI does not receive such verification, BI immediately shall notify Microsoft of the availability of such Rule or Rule Update and shall deliver an additional copy of such Rule or Rule Update to the designated http server. BI shall provide such Rules, Rule Updates and services to Microsoft in accordance with Exhibit C.

4.3 Probe Accounts.

(a) Probe Account Set Up. Microsoft shall * of * accounts to which BI shall have access for use for the purposes of this Agreement (“Probe Accounts”), so that BI may * and create Rules and Rules Updates from the information obtained from such Probe Accounts. Probe Accounts shall *. The Filtering Functionality shall be *. Microsoft shall also *. The Filtering Functionality *. Microsoft shall work with BI to ensure that * so that it is, *. Neither Party

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shall publicly expose * in a manner that would compromise their use as contemplated in this Agreement.

(b) Performance Standards. The performance of the * shall be measured by the *.

5. LICENSE GRANTS.

5.1 BI License Grant. Subject to the terms and conditions of this Agreement, BI hereby grants to Microsoft during the Term and the Wind-Down Period, if any, the worldwide, non-exclusive and irrevocable (except has a result of the expiration or termination of this Agreement according to its terms) right and license to:

(a) make, use, reproduce, perform, display, import, broadcast, transmit, install, host, execute, and store one or more copies of the Software in object code form on any and all MS Servers;

(b) make, use, reproduce, perform, display, import, broadcast, transmit, install, host, execute, and store one or more copies of the Software in object code form on any and all MS Servers for the purpose of testing the Software and Filtering Functionality and otherwise using the foregoing for Microsoft’s internal purposes and operations relating to the use, implementation, offering and/or provision of the Filtering Functionality to Hotmail Users;

(c) promote, perform, execute, transmit, display, use and provide access to the Software for the purposes of providing the Filtering Functionality to Hotmail Users;

(d) store, transmit and display the Software’s instructions or data in, through, and on, Devices and other servers and computers which are operated with or otherwise access or use the MS Servers;

(e) copy and store the Software for the purposes of maintaining up to two (2) back-up copies of the Software;

(f) copy, transmit, publicly perform or display, adapt and distribute all via any and all means and media to Hotmail Users, those portions of the Documentation that include instructions necessary for use of the Filtering Functionality via the Microsoft Email Services; and

(g) sublicense the rights and licenses set forth in this Section 5.1, in whole or in part, to one or more Microsoft Affiliates, or to a service provider that provides hosting or server functions for Microsoft. Microsoft shall be responsible to BI

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for direct damages suffered by BI as a result of any breach by shall any such sub-licensee of the terms and conditions of the license granted under this Section 5.1 solely and to the extent that BI is unable to seek or recover such damages directly from such sub-licensee.

5.2 Reservation of Rights. All rights not explicitly granted by BI under Sections 5.1 and 5.2 are expressly reserved by BI; provided, however, to the extent that BI IP is incorporated in the Software or Filtering Functionality, BI grants to Microsoft the right to use such BI IP solely for the purposes of effectuating the licenses granted herein for the duration of this Agreement, and the Wind-Down Period, if any.

5.3 No Obligation to Exercise. For the avoidance of any doubt, Microsoft is not required to exercise the rights and licenses granted in this Section 5 with respect to the Software or otherwise use the Software in accordance with this Agreement for the purposes of providing the Filtering Functionality to Hotmail Users.

6. FEES

6.1 Fees. Except as expressly set forth in this Agreement, Microsoft shall make fee payments in the amounts and in accordance with the schedule set forth in Exhibit D.

6.2 Additional Services. For any Additional Services requested in writing by Microsoft under Section 7.4, Microsoft shall pay any fees previously agreed to by Microsoft in writing within * (*) days of receipt of an undisputed invoice.

7. BI SUPPORT SERVICES

7.1 Routine Maintenance and Quality Fix Engineering Support. During the Term, and the Wind-Down Period, if any, BI shall be solely responsible for the maintenance and support of the Filtering Functionality and the Software including (i) fixing any Errors that are related to the Filtering Functionality, the Software or its interaction or interoperability with the MS Servers; (ii) ensuring that the Software conforms in all material respects to the Specifications; (iii) providing Filtering Functionality and Software support for the identification and resolution of any Errors; (iv) providing technical assistance from the BI’s support organization; and (v) generally providing other quality control and engineering support. Without limitation to the foregoing, BI shall provide maintenance and support services in accordance with the Service Level Agreement and response times set forth in Exhibit C (the “Service Level Agreement” or “SLA”).

7.2 First Line Customer Support. Microsoft shall provide initial customer support to Hotmail Users who are receiving the Filtering Functionality in conjunction with a Microsoft Email Service, in a manner determined in Microsoft’s sole discretion.

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7.3 Second Line Technical Support. BI shall provide second line support to Microsoft, in a time frame and manner specified by Microsoft, for the Software and the Filtering Functionality, which second line support shall include information, technical support and other assistance relating to the Software and the Filtering Functionality. Notwithstanding anything contained herein to the contrary, BI shall not have any contact or communication with any Hotmail Users without Microsoft’s prior written consent.

7.4 Onsite Requirements. In the event that BI employees or designees are located at the premises of Microsoft for the purpose of providing Installation Services, Additional Services, or fulfilling other support obligations hereunder, including those described in Sections 7.1, 7.3 or 7.4, or for any other reason, BI is not authorized to use, and agrees that it shall not use its location on such premises, or its access to Microsoft employees or facilities, to obtain information or materials from sources at Microsoft other than as expressly authorized by Microsoft. For example, although a BI employee or designee may be given security card access to select facilities at Microsoft, it is Microsoft’s intent to grant access to only the office space allocated to BI and such other spaces as may be designated by Microsoft from time to time. It is not Microsoft’s intent to grant BI employees or designees full access to all areas of the Microsoft premises accessible by security card or to other floors of such premises. BI shall direct its employees and designees not to access areas of the premises other than those specifically designated by Microsoft. BI’s employees and designees shall abide by all of the rules, regulations, and security measures adopted by Microsoft while present at its premises, provided that in the event of any inconsistency between such rules, regulations and security measures and this Agreement, this Agreement shall prevail with respect to confidentiality and ownership of and rights in and to MS IP.

8. COMMUNICATION

8.1 Quarterly Steering Meetings. The Parties shall meet at the Microsoft premises located in Mountainview, California, on a day to be mutually agreed upon by the Parties in the months of September, December, March, and June of each year during the Term to evaluate the relationship of the Parties (the “Quarterly Steering Meetings”). The Parties shall be represented by authorized personnel directly responsible for performance hereunder, and shall bear their own expenses with respect to such Quarterly Steering Meetings. The agenda for each Quarterly Steering Meeting shall include an evaluation of the quality of the Filtering Functionality and Software, and the need for technical updates and upgrades to the Software, including Enhancements, Rules and Rule Updates, technical issues, and overall customer experience.

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9. INTELLECTUAL PROPERTY

9.1 Proprietary Rights.

(a) Software. Except as set forth in this Section 9, nothing in this Agreement, and no use of the Software by Microsoft pursuant to this Agreement shall vest in Microsoft or be construed to vest in Microsoft any right of ownership in or to the Software, other than the rights and licenses to use the Software in accordance with the terms and conditions of this Agreement.

(b) *. BI agrees that for a period of * after the Launch Date, BI shall not: (i) sell, license or otherwise distribute any of the * or otherwise permit any third party to use any of the * any purpose; nor (ii) itself use any of the * any purpose other than its performance of its obligations under this Agreement.

(c) User Interface and MS IP. Nothing herein obligates BI to create or provide to Microsoft any User Interface. However, BI acknowledges and agrees that any User Interface developed by Microsoft, by BI or by the Parties in accordance with this Agreement shall not be considered Software, Derivative Technology of the Software, or BI IP, but shall be and remain MS IP and the exclusive property of Microsoft, and BI has no rights, title or interest in or to any MS IP. To the extent that BI develops or modifies any User Interface when providing services under this Agreement, such work product shall be deemed a work made for hire and all right and title of such work shall be owned by Microsoft.

(d) Joint Developments. For the avoidance of doubt, the Parties acknowledge and agree that BI shall develop the Software, provide the services, and perform its other obligations under this Agreement without any assistance, cooperation or Confidential Information (other than the Proprietary Bit Range) from Microsoft and without engaging in any joint development activities or other collaborations with Microsoft (collectively, “Microsoft Assistance”). Notwithstanding the foregoing, if Microsoft desires, in its sole discretion, to provide Microsoft Assistance to BI, then the Parties shall enter into a written agreement, prior to Microsoft’s providing any such Microsoft Assistance, to determine each Party’s respective rights, title and interests in and to the software, other know-how, inventions, works, materials, information and other outputs developed directly or indirectly by Microsoft, BI or the Parties based upon such Microsoft Assistance, and each Party’s respective rights, title and interest in and to the intellectual property and proprietary rights associated with the foregoing, (including any rights, title and interests in and to any domestic or foreign patents, copyrights, trade marks, service marks, trade secrets, and applications and registrations therefor or related to the foregoing) (collectively “Joint Developments”). In the event BI, Microsoft or the Parties

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* with respect to such Joint Developments, such Joint Developments shall be *.

9.2 Cooperation. BI shall assign to Microsoft all right, title and interests in and to the User Interface and other MS IP (*), to the extent BI acquires or retains such rights, title and interests by operation of law or otherwise. From time to time upon Microsoft’s request, BI shall confirm such assignments by the execution and delivery of such assignments, confirmations, or other written instruments as Microsoft may request. Without limitation to the foregoing, Microsoft has the right to perfect and protect in its own name all rights, title and interests in and to the User Interface and other MS IP (including the *, if any, to the extent Microsoft has any rights, title or interest therein or thereto in accordance with Section 9.1(c)).

10. CONFIDENTIALITY; PRESS RELEASES

10.1 NDA. The Parties acknowledge and agree that the terms and conditions of the Microsoft Corporation Non-Disclosure Agreement (the “NDA”) entered into by the Parties, on February 16, 2000 are incorporated into this Agreement and shall be effective for the Term. In the event that any of the incorporated terms of the NDA are inconsistent with or conflict with this Agreement, then the terms of this Agreement shall control.

10.2 Injunctive and Equitable Relief. Each Party acknowledges that monetary damages may not be a sufficient remedy for unauthorized disclosure or use of Confidential Information and that each Party may seek, without waiving any other rights or remedies, such injunctive or equitable relief as may be deemed proper by a court of competent jurisdiction.

10.3 Press Releases. Subject to compliance with the rules and regulations of the United States Securities and Exchange Commission and any applicable stock exchanges, neither Party shall issue any press release or make any similar public announcement(s) or disclosure(s) relating in any way whatsoever to this Agreement or the relationship established by this Agreement without the express prior written consent of the other Party. However, BI may mention Microsoft in BI’s customer lists provided that BI: (i) identifies Microsoft only by textual reference to the name “Microsoft” or “MSN”; (ii) does not use any Microsoft trademark or logo, or any other names such as “Hotmail”; and (iii) mentions Microsoft only as part of a list including other BI customers and does not mention Microsoft alone.

11. REPRESENTATIONS, WARRANTIES AND ADDITIONAL COVENANTS

11.1 Representations and Warranties. Each Party individually represents and warrants to the other that: (i) it is a corporation duly organized, validly existing, and in good

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standing under the laws of its jurisdiction of formation; (ii) it has full corporate power and authority and has taken all corporate action necessary to enter into and perform all of its obligations under this Agreement; (iii) the execution and delivery of this Agreement and the transactions contemplated herein do not and shall not violate, conflict with, or constitute a default under its charter or similar organization document, its bylaws or the terms or provisions of any material agreement or other instrument to which it is a party or by which it is bound, or any order, award, judgment or decree to which it is a party or by which it is bound; (iv) this Agreement is its legal, valid and binding obligation, enforceable in accordance with the terms and conditions hereof; and (v) information, reports and status reports provided by such Party to the other Party pursuant to this Agreement shall be accurate and complete in all material respects.

11.2 BI Additional Representations, Warranties and Covenants. BI represents, warrants and covenants to Microsoft that:

(a) (i) BI has full and sufficient rights to assign and grant the rights and licenses described herein to Microsoft pursuant to this Agreement; (ii) to the best of BI’s Knowledge as of the Effective Date, the Software and the Filtering Functionality do not infringe, violate or misappropriate any domestic or foreign copyrights, trademarks, service marks, patents, trade secrets or other intellectual property rights of any third party; nor is there any claim of such infringement, violation or misappropriation threatened or pending against BI; (iii) to the best of BI’s Knowledge as of the Effective Date, Microsoft’s and its Affiliates’, Hotmail Users’, customers’ and sublicensees’ use of the Software and the Filtering Functionality does not infringe, violate or misappropriate any domestic or foreign copyrights, trademarks, service marks, patents, trade secrets or other intellectual property rights of any third party;

(b) BI has facilities, personnel, experience and expertise sufficient in quality and quantity to perform all of its obligations hereunder (including without limitation providing the services, and Rules and Rule Updates) in a commercially reasonable manner, and BI shall perform all such obligations (including without limitation the provision of services in accordance with the SLA, and, Rules and Rule Updates) in a timely and professional manner, commensurate with the highest professional standards in the industry, and in compliance with all applicable laws. Without limitation of the foregoing, BI shall cause each Rule and Rules Update to be (i) appropriately tailored to its purposes according to the Specifications and Documentation and the purposes presented to Hotmail Users relating to the monitoring, managing and filtering of Spam; and (ii) up-to-date, complete, and accurately described to Hotmail Users.

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(c) BI shall not intentionally impair the operation of Hotmail, MSN, MSNIA or any other Microsoft Email Service that uses the Software;

(d) Neither the Software nor the Filtering Functionality shall contain any: (i) computer virus, worm or other similar malicious code that could be prevented and/or detected and removed through industry standard security practices; (ii) any feature that prevents or interrupts the use of the Software, the Filtering Functionality, any Microsoft Email Service, any MS Server or any Device used by a Microsoft User, including without limitation any lock, drop-dead device, Trojan-horse routine, trap door, time bomb; or (iii) any other code or instruction that is intended to be used to access, modify, delete, damage, or disable the functionality of Hotmail, MSN, MSNIA or any other Microsoft Email Service, or prevent or impede the access or use thereof by Hotmail Users;

(e) The Software is (i) free from Major Errors not cured in accordance with the SLA, and shall operate in conformity with the Documentation and Specifications; (ii) capable of providing the Filtering Functionality to an unlimited number of Hotmail Users; and (iii) in compliance with all United States laws applicable to the Software and its intended use as provided herein.

11.3 Disclaimer of Warranties. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS SECTION 11, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER TO THE OTHER PARTY OR ANY OTHER ENTITY. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EACH PARTY EXPRESSLY DISCLAIMS TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW ANY AND ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WITHOUT LIMITATION (I) WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, (II) WARRANTIES AGAINST INFRINGEMENT OF ANY THIRD PARTY INTELLECTUAL PROPERTY OR PROPRIETARY RIGHTS, (III) WARRANTIES RELATING TO DELAYS, INTERRUPTIONS, ERRORS, OR OMISSIONS, AND (IV) WARRANTIES OTHERWISE RELATING TO PERFORMANCE, NONPERFORMANCE, OR OTHER ACTS OR OMISSIONS BY SUCH PARTY OR ANY AFFILIATE OR OTHER THIRD PARTY.

11.4 No Warranties to End User. Microsoft acknowledges that BI does not, and Microsoft agrees that it shall not, make any representation or warranty to Hotmail Users regarding the performance of the Software or the Filtering Functionality.

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12. LIMITATION OF LIABILITY

12.1 Limitation, Exclusion of Consequential Damages. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY OTHER PERSON FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE, OR INDIRECT DAMAGES ARISING UNDER OR IN ANY WAY RELATED TO THIS AGREEMENT (INCLUDING LOST PROFITS, LOSS OF BUSINESS OR DATA, BUSINESS INTERRUPTION AND DAMAGES THAT RESULT FROM INACCURACY OF THE INFORMATION OR INCONVENIENCE, DELAY OR LOSS) EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR LOSSES. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, IN NO EVENT SHALL THE LIABILITY OF EITHER PARTY FOR DAMAGES OR ALLEGED DAMAGES HEREUNDER, WHETHER IN CONTRACT OR TORT OR ANY OTHER LEGAL THEORY, EXCEED *; PROVIDED, HOWEVER, THIS SECTION 12.1 SHALL NOT APPLY TO THE (A) THE INDEMNIFICATION OBLIGATIONS OF BI UNDER SECTION 14, (B) ANY BREACH OF SECTION 10.1 OR (C) THE ABILITY OF A PARTY TO OBTAIN INJUNCTIVE RELIEF.

12.2 Allocation of Risks. Each Party acknowledges and agrees that (i) this Agreement represents the complete allocation of risks between the Parties, (ii) it has voluntarily accepted all risks assigned to it herein, and (iii) the disclaimer of warranties and limitation of remedies herein form an essential basis of the bargain.

13. TERM AND TERMINATION

13.1 Term and Renewal Terms. Subject to the other provisions of this Section 13, the Agreement shall commence on the Effective Date and has an initial term expiring on the date occurring three (3) years after the Launch Date (the “Term”).

13.2 Termination.

(a) Termination Without Cause. Either party may terminate this Agreement by providing not lees than ninety (90) days written notice to the other party; provided however, that no such notice may be given prior to the date fifteen (15) months after the Launch Date.

(b) Microsoft Additional Rights.

(i) In addition to any other rights or remedies of Microsoft, all of which are expressly reserved, Microsoft may terminate this Agreement, at any time during the Term, upon thirty (30) days’ prior written notice to BI in the event an Additional Indemnified Claim has arisen, and

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Microsoft may terminate this Agreement, at any time during the Term, upon ninety (90) days’ prior written notice to BI in the event a BI Claim has arisen and BI has not implemented a Cure for such BI Claim within thirty (30) days of Microsoft’s request therefor pursuant to Section 14.4.

(ii) Microsoft may terminate this Agreement immediately upon delivery of written notice to BI: (i) within one hundred eighty (180) days following Microsoft’s receipt of any Transfer Notice; (ii) as provided in 2.5(b); or (iii) if BI is in breach of Section 2, Section 4, or Section 7.

(c) Insolvency and Termination for Cause. In addition to any other rights or remedies that a Party may have under the circumstances, all of which are expressly reserved, a Party may terminate this Agreement at any time if

(i) the other Party becomes insolvent or makes any assignment for the benefit of creditors or similar transfer evidencing insolvency; or suffers or permits the commencement of any form of insolvency or receivership proceeding; or has any petition under any bankruptcy law filed against it, which termination pursuant to this Section 132(c)(i) shall be effective immediately upon written notice or as otherwise specified herein;

(ii) the other Party is in material breach of any warranty, representation, term, condition or covenant, and fails to cure such material breach within thirty (30) days after written notice thereof, such termination to become effective immediately upon the expiration of such thirty (30) day period; or

(iii) the other Party is in breach of the NDA, such termination to become effective upon the delivery of notice of such breach from the non-breaching Party.

13.3 Wind-Down Period.

(a) In the event that this Agreement is terminated in any fashion prior to the end of the Term, Microsoft has the right, but not the obligation, subject to the payment of applicable Wind-Down Fees, to continue using the Software during the Wind-Down Period, to provide the Filtering Functionality to Hotmail Users (in accordance with the rights and licenses granted hereunder). The “Wind-Down Period” shall commence on the effective date of early termination of this Agreement and terminate on the earlier of

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(i) the date that Microsoft indicates at its sole discretion, that it no longer wants to use the Software,

(ii) the date occurring six (6) months after the effective date of termination of this Agreement, or

(iii) the date on which this Agreement would have expired by its terms.

(b) The “Wind-Down Fees” shall be calculated as *; provided, however, such Wind-Down Fees * if this Agreement is terminated by Microsoft pursuant to Section 13.2(c). The Wind-Down Fees shall be payable within * days of Microsoft’s receipt of an invoice from BI.

(c) Without limitation to Section 13.5, during the Wind-Down Period, BI shall continue to provide Microsoft with Enhancements in accordance with Section 2.4, the Rules and Rule Updates in accordance with Section 4 and support services in accordance with Section 7 hereof.

(d) During the Wind Down Period, BI shall maintain the service availability and quality as high as that provided during the Term.

(e) At the conclusion of the Wind-Down Period, if any, Microsoft shall discontinue use of the Software, and shall remove the Software and any portion thereof from the MS Servers and Microsoft shall return or destroy, as requested by BI, all copies of the Software in Microsoft’s possession.

13.4 Release; Events on Termination.

(a) Except as expressly set forth in this Agreement, the termination or expiration of this Agreement shall not release any Party from any obligations (including payment obligations under Section 6.1 or Exhibit D) that have previously accrued or are expressly required to survive the termination of this Agreement hereunder.

(b) Upon termination or expiration of this Agreement, each Party shall, at the other Party’s direction, return or certify as to the destruction of Confidential Information of such other Party. Except as expressly set forth herein, no Party shall be liable to the other for damages of any sort resulting solely from terminating this Agreement in accordance with its terms.

13.5 Survival. Exhibits A and B and the following Sections shall survive the termination and expiration of this Agreement: 2.5(b) (with respect to BI’s refund obligations), 9, 5.1(g), 10, 11, 12, 13.3, 13.4, 13.5, 14, 15, 16 and 17. In addition, Sections 2.4,

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2.5(a), 2.5(c) 4, 5, 6, 7 and 8 shall survive the termination and expiration of the Agreement for the duration of the Wind-Down Period.

14. Indemnification

14.1 Claims. A Party (the “Indemnifying Party”) shall, at its sole expense and the request of the other Party, defend any third-party claim (a “Claim”) brought against such other Party or such other Party’s Affiliates, directors, officers, employees, licensees or independent contractors (each, an “Indemnified Party”) to the extent that such Claim, if true, would constitute a breach of a warranty, representation or covenant of the Indemnifying Party set forth in this Agreement (collectively, the “Indemnified Claims”).

14.2 Additional Indemnification. Without limitation to Section 14.1 hereof, BI (as the Indemnifying Party) shall, at its sole expense, indemnify, defend and hold Microsoft and its Affiliates, directors, officers, employees, licensees, and independent contractors (as Indemnified Parties) harmless from any Claim brought against Microsoft or such other Indemnified Parties at any time to the extent such Claim arises from any Claim that the Filtering Functionality or the Software infringes upon or violates or misappropriates any domestic or foreign patents, copyrights, trade secrets, trademarks, service marks or other intellectual property rights of any third party or contains material which is otherwise in violation of applicable United States law) (any Claim described in this Section 14.2 shall be referred to as an “Additional Indemnified Claim”).

14.3 Claims Procedure. The Indemnified Party shall promptly notify the Indemnifying Party in writing of any Indemnified Claim or Additional Indemnified Claim, specifying the nature of the action and the total monetary amount sought or other such relief as is. sought therein. The Indemnified Party shall cooperate with the Indemnifying Party at the Indemnifying Party’s expense in all reasonable respects in connection with the defense of any such Indemnified Claim or Additional Indemnified Claim. The Indemnifying Party may upon written notice to the Indemnified Party undertake to control and conduct all proceedings or negotiations in connection therewith, assume and control the defense of such Indemnified Claims or Additional Indemnified Claims, and if it so undertakes, it shall also undertake all other required steps or proceedings to settle or defend any such Indemnified Claim or Additional Indemnified Claim, including the employment of counsel which shall be reasonably satisfactory to the Indemnified Party, and payment of all reasonably incurred expenses. Notwithstanding the foregoing, the Indemnified Party has the right to employ separate counsel to provide input to the defense, at the Indemnified Party’s own cost. The Indemnifying Party shall reimburse the Indemnified Party upon demand for any payments made or loss suffered by it at any time after the date of tender, based upon the judgment of any court of competent jurisdiction or pursuant to

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a bona fide compromise or settlement of Indemnified Claims or Additional Indemnified Claims. The Indemnifying Party shall not settle any Indemnified Claim or Additional Indemnified Claim under this Section 14.3 on the Indemnified Party’s behalf without first obtaining the Indemnified Party’s written permission, which permission shall not be unreasonably withheld, and the Indemnifying Party shall indemnify and hold the Indemnified Party harmless from and against any costs, damages and fees reasonably incurred by the Indemnified Party, including fees of attorneys and other professionals, that are attributable to such Indemnified Claims or Additional Indemnified Claims. The Indemnifying Party shall not be responsible for any indemnification obligations arising hereunder pursuant to the terms and conditions of any settlement of an Indemnified Claim or Additional Indemnified Claim by the Indemnified Party unless such settlement was approved by the Indemnifying Party, which approval shall not be unreasonably withheld.

14.4 BI Notice and Remedy. Without limitation to this Section 14, BI shall notify Microsoft immediately upon obtaining Knowledge of any threatened or pending claim arising with respect to the Software or the Filtering Functionality (“BI Claims”), including any claim that (i) the Software the Filtering Functionality or any portion thereof, infringes, violates or misappropriates, any domestic or foreign patent, copyright, trademark, service mark, trade secret, know-how, or other intellectual property or proprietary right of any third party or violates applicable laws, or (ii) Microsoft’s or BI’s use of any of the foregoing infringes, violates or misappropriates any domestic or foreign patent, copyright, trademark, service mark, trade secret, know-how, or other intellectual property or proprietary right of any third party or violates applicable laws. Such notice shall include sufficient details of the BI Claim to permit Microsoft to determine whether it considers such claim to be credible. If Microsoft reasonably considers such claim to be credible Microsoft may notify BI in writing that Microsoft requires a Cure (as defined below) and upon delivery of such notice, BI shall, at BI’s expense: (a) procure for Microsoft the right to continue to use the Software and the Filtering Functionality in accordance with the rights and licenses granted to Microsoft under this Agreement; or (b) replace or modify the Software or the Filtering Functionality, as the case may be, with a version that does not give rise to such BI Claim, provided that such replacement or modified version complies with the Specifications to Microsoft’s satisfaction, as determined in Microsoft’s sole discretion (each activity undertaken by BI in fulfillment of Section 14.4(a) or (b) shall be referred to as a “Cure”). If a Cure is not available to BI within sixty (60) days of BI’s delivery of notice to Microsoft of such BI Claim, Microsoft may at its sole option, suspend its performance (i.e., payment) under this Agreement upon written notice to BI, or terminate this Agreement upon written notice to BI. If Microsoft terminates this Agreement as provided in this Section 14.4, then in addition to any damages and expenses reimbursed by BI under this Section 14 and without limiting any of Microsoft’s other rights and remedies all of which are

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expressly reserved, BI promptly shall refund to Microsoft the last installment payment made to BI by Microsoft pursuant to Section 6.1 and Exhibit D of this Agreement.

15. NOTICES

All notices, requests, demands and other communications which are required or may be given pursuant to the terms of this Agreement shall be in writing and shall be deemed delivered (a) on the date of delivery when delivered by hand; (b) on the date of transmission when sent by electronic mail or facsimile transmission during Normal Business Hours with telephone confirmation of receipt; provided, an original also is sent the same day in accordance with Section 15(d), below; (c) one (1) day after dispatch when sent by reputable overnight courier maintaining records of receipt; or (d) three (3) days after dispatch when sent by registered mail, postage prepaid, return-receipt requested, all addressed as provided below or as amended by a Party from time to time upon five (5) days’ notice to the other Party:

If to Microsoft:	Microsoft Corporation One Microsoft Way Redmond, WA 98052-6399 Attention: VP MSN Communications Facsimile: * Telephone: *
With required copies to:	Microsoft Corporation Law and Corporate Affairs One Microsoft Way Redmond, WA 98052-6399 Facsimile: * Telephone: *
If to BI.	Brightmail, Inc. 301 Howard Street, Suite 1800 San Francisco, CA 94105 Attention: * Facsimile: * Telephone: * E-mail: *

16. INSURANCE

16.1 Minimum Insurance Coverage. During the Term, and the Wind-Down Period, if any, and for a period of * from the last date BI is obligated to provide or license any

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Software or services under this Agreement, BI shall procure and maintain insurance reasonably adequate to cover any and all liability that BI may incur as a result of the performance of its obligations under this Agreement. Such insurance shall be in a form and with insurers reasonably acceptable to Microsoft and shall consist of policies that comply with the following minimum requirements:

(a) commercial general liability insurance, with policy limits of not less than * for each occurrence of bodily injury or property damage, or combined single limits;

(b) umbrella policy with minimum limits of *; and

(c) professional liability and errors and omissions liability insurance with policy limits of not less than * for each claim with a deductible of not more than *.

16.2 Maintenance. BI’s insurance policy shall: (a) provide professional liability and errors and omissions liability insurance coverage from a date which is not later than the date at which BI began providing services related to or in conjunction with this Agreement; (b) provide that no cancellation, material reduction in amount, or material change in coverage shall be effective until at least ten (10) days after receipt by Microsoft of written notice thereof; (c) provide for losses payable to Microsoft as its interests may appear; and (d) be reasonably satisfactory in all other respects to Microsoft. BI shall deliver to Microsoft a current certificate of insurance and certifications of renewal of the insurance policies and a report of a reputable insurance broker with respect to such insurance policies at least once during each calendar year during such time as the insurance is in effect and such other supplemental reports with respect thereto as Microsoft may reasonably request from time to time. Microsoft shall review the certificates and reports within a commercially reasonable time after BI’s delivery thereof and shall notify BI reasonably promptly if BI’s certificates and reports evidence coverage which Microsoft reasonably determines to be less than that required to meet BI’s obligations under this Agreement, and BI agrees that it shall promptly acquire such coverage and inform Microsoft in writing thereof. Failure by BI to furnish certificates of insurance or failure by Microsoft to request same shall not constitute a waiver by Microsoft of any of the insurance requirements set forth herein. BI shall notify Microsoft in writing at least ten (10) days in advance if BI’s insurance coverage is to be canceled or materially altered so as to no longer comply with the requirements of Section 16.1 and this Section 16.2.

17. GENERAL PROVISIONS.

17.1 Independent Contractors. The Parties are independent contractors with respect to each other hereunder, and nothing in this Agreement shall be construed as creating an

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employer-employee relationship, a partnership, agency relationship or a joint venture between the Parties. Notwithstanding anything contained in this Agreement to the contrary, each Party shall be solely responsible for the performance of its obligations hereunder, neither Party shall be liable for any breach by the other Party, and nothing contained in this Agreement shall be deemed to constitute a guarantee by one Party of performance of any of the obligations of the other Party.

17.2 Independent Development. Nothing in this Agreement shall be construed as restricting Microsoft’s right to acquire, license, sublicense or develop for itself, or have others develop for it, similar software or technology performing the same or similar functions as the Software, or to market and distribute such similar software or technology in addition to, or in lieu of, the Software.

17.3 Governing Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington applicable to contracts made and to be performed wholly within such jurisdiction by residents of such jurisdictions. BI and Microsoft irrevocably and unconditionally consent to the exclusive jurisdiction of, and venue in, the state and federal courts sitting in King County, Washington. In any action or suit to enforce any right or remedy under this Agreement or to interpret any provision of this Agreement, the prevailing Party shall be entitled to recover its costs with interest, including reasonable attorneys’ fees and court costs.

17.4 Assignment. Except for Microsoft’s right to grant sublicenses under Section 5, neither Party may assign or transfer control of this Agreement or any rights or obligations hereunder without the other Party’s prior written approval. Any attempted assignment, sublicense, transfer, encumbrance, conveyance or other disposal without such consent shall be void and shall constitute a material default and breach of this Agreement. Notwithstanding the foregoing, (a) Microsoft may assign this Agreement or any rights or obligations it may have hereunder to any Person without BI’s prior written consent; provided that the assignee assumes such obligations in writing, and (b) BI may assign its rights and obligations hereunder without Microsoft’s prior written consent solely in connection with a merger, transfer of control, reorganization, or sale of all or substantially all of its assets or equity interests on the condition that (A) BI provides Microsoft with at least thirty (30) days prior written notice of such assignment (a “Transfer Notice”), and (B) such assignee agrees in writing to assume all of BI obligations under this Agreement.

17.5 Construction. In the event that any provision of this Agreement conflicts with governing law or if any provision is held to be null, void or otherwise ineffective or invalid by a court of competent jurisdiction, (a) such provision shall be deemed to be restated to reflect as nearly as possible the original intentions of the Parties in accordance with applicable law, and (b) the remaining terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect. This

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Agreement has been negotiated by the Parties and their respective counsel and shall be interpreted fairly in accordance with its terms and without any strict construction in favor of or against either Party.

17.6 Excusal of Performance. No Party shall be responsible for, or be in breach of this Agreement, if its performance is delayed for up to thirty (30) days as a result of any act of God, war, fire, earthquake, sickness, accident, civil commotion, act of government, or any other cause wholly beyond its control, including without limitation, denial of service attacks, and not due to its own negligence or that of its contractors or representatives, and which cannot be overcome by the exercise of due diligence. Without limitation of the foregoing, a subcontractor’s bankruptcy, inability or failure to pay its obligations as they come due, assignment of its assets for the benefit of creditors, institution of bankruptcy or receivership proceedings against it, or appointment of a trustee, conservator or receiver or other liquidating officer for it or its assets or other financial deficiency shall not be deemed to excuse performance of this Agreement by the Party responsible for such subcontractor’s performance.

17.7 Non-Waiver. No delay or failure by either Party to exercise any right under this Agreement and no partial exercise of any right under the Agreement shall constitute a waiver of that right or any other right. No waiver of any breach of any provision of this Agreement shall constitute a waiver of any prior, concurrent or subsequent breach of the same or any other provisions hereof, and no waiver shall be effective unless made in a non-electronic writing and signed by an authorized representative of the waiving Party.

17.8 Headings. Headings in this Agreement are for convenience only and shall not be used to interpret or construe its provisions.

17.9 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute, together with all Appendices, Attachments, Exhibits and Schedules hereto, one and the same instrument.

17.10  Entire Agreement. This Agreement, together with all Appendices, Attachments, Exhibits and other Schedules hereto constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, communications, or proposals, whether oral or written, between the Parties on this subject. This Agreement shall not be modified except by an agreement dated subsequent to the date of this Agreement written and signed in a non-electronic form on behalf of the Parties by their respective duly authorized representatives.

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17.11  Not an Offer. This document does not constitute an offer by any Party to any other Party. This Agreement shall not be effective unless and until signed by both Parties.

17.12  Expenses. Except as set forth in Section 6.2, each Party shall be solely responsible for its own costs and expenses incurred in the preparation, negotiation, implementation, and the performance of its obligations under this Agreement. Without limitation to the foregoing and for the avoidance of doubt, BI shall provide all Enhancements, Rules and Rule Updates, Installation Services and other services required hereunder to Microsoft at no additional charge to Microsoft, other than as expressly required under Section 7.4.

[SIGNATURES ON FOLLOWING PAGE]

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IN WITNESS WHEREOF,

The Parties have caused this Agreement to be executed by their duly authorized representatives as of the dates set forth below.

MICROSOFT CORPORATION		BRIGHTMAIL, INC.
By:	/s/ Blake Irving	By:	/s/ Mike Irwin
Name:	Blake Irving	Name:	Mike Irwin
Title:	Corporate VP, MSN	Title:	VP Finance
Date:	8/13/02	Date:	June 20, 2002

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EXHIBIT A

DEFINITIONS

“Additional Indemnified Claim” has the meaning set forth in Section 14.2.

“Additional Services” has the meaning set forth in Section 7.4.

“Affiliate” means with respect to any Person, any other Person that directly or indirectly Controls, is Controlled by, or is under common Control with such Person.

“Agreement” has the meaning set forth in the Preamble.

“BI” has the meaning set forth in the Preamble.

“BI Claims” has the meaning set forth in Section 14.4.

“BI IP” means any and all copyrights, moral rights, mask-works, trademarks, trade names, trade secrets, patents, designs, algorithms and all other intellectual property rights, and all applications thereto, owned by BI, which was developed by BI prior to the Effective Date or any time thereafter but not as a result of BI’s exposure to any MS IP or other proprietary information of Microsoft.

“Business Day” means any day of the week, other than Saturday, Sunday, or a day on which banks are officially closed in the state of Washington.

“Claim” has the meaning set forth in Section 14.1.

“Confidential Information” has the meaning set forth in the NDA.

“Consumer Email Services” means publicly available email services operated by Microsoft and/or a Microsoft Affiliate as of the Effective Date.

“Control” including its various tenses and derivatives (such as “Controlled”) means, with respect to any Person, the presence of the following: (i) the legal, beneficial or equitable ownership, directly or indirectly, of more than fifty percent (50%) of the capital or voting stock (or other ownership or voting interest, if not a corporation) of such Person, or (ii) the ability, directly or indirectly, to direct the voting of a majority of the directors of such Person’s board of directors, or if the Person does not have a board of directors, a majority of the positions on any similar body, whether through appointment, voting agreement or otherwise.

“Cure” has the meaning set forth in Section 14.4.

“*” means the following portions of the Software: *.

A-1

CONFIDENTIAL TREATMENT REQUESTED

“Derivative Technology” means (i) for copyrightable or copyrighted material, any translation (including translation into other computer languages), portation, modification, correction, addition, extension, upgrade, improvement, compilation, abridgment or other form in which an existing work may be recast, transformed or adapted; (ii) for patentable or patented material, any improvement thereon; and (iii) for material that is protected by trade secret, any new material derived from such existing trade secret material, including new material that may be protected by copyright, patent or trade secret.

“Device” means any computer or other device (and all related equipment) that contains the necessary features and functionality to access a server or computer that is operating using the Software.

“Documentation” means the standard user manuals, operating’ guides, and all of the material relating to the Software or use thereof, including any and all subsequent versions, whether in print, machine readable media, or any other media provided by BI to Microsoft for use with the Software.

“Effective Date” means the date of the latter of the two signatures on this Agreement.

“Enhancement” means an enhancement, improvement, modification, correction of an Error, patch, bug fix, filter update, material update or upgrade to the functionality or features of the Software.

“Error” means a Major Error or a Minor Error.

“Filtering Functionality” means the Spam monitoring, management and filtering functionality of the Software (including Rules and Rules Updates) and services to be licensed and provided by BI to Microsoft in accordance with the terms of this Agreement, including the Specifications.

“Hotmail” means the e-mail service operated by Microsoft as identified in the Recitals.

“Hotmail Users” has the meaning set forth in the Recitals.

“Indemnified Claims” has the meaning set forth in Section 14.1.

“Indemnified Party” has the meaning set forth in Section 14.1.

“Indemnifying Party” has the meaning set forth in Section 14.1.

“Initial Software” means the software described in Exhibit B, including the Custom Work.

“Installation Services” has the meaning set forth in Section 2.3.

“Joint Developments” has the meaning set forth in Section 9.13(c).

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“Knowledge” means either (i) actual knowledge or awareness of BI, its Affiliates, officers, directors or key employees, or (ii) knowledge or awareness that could be obtained by any of the foregoing through reasonable due diligence, inquiry or investigation.

“Launch Date” has the meaning set forth in Section 3.1.

“Major Error” means (i) a failure of the Software to substantially conform to the Specifications and/or Documentation governing such Software, which failure materially impacts the operational or functional performance of such Software or the Filtering Functionality, or (ii) any defect, bug, inefficiency or error that renders the Software inoperative, causes it to fail catastrophically, renders any of the Microsoft Email Services inoperative or causes any of the Microsoft Email Services to malfunction, or prevents Microsoft from using the Software or Filtering Functionality in the normal business operations contemplated by this Agreement.

“Microsoft” or “MS” has the meaning set forth in the preamble.

“Microsoft Assistance” has the meaning set forth in Section 9.1.3(c).

“Minor Error” means any defect, bug, inefficiency or error, other than a Major Error, including any (i) defect, bug, inefficiency or error that causes any degradation in the performance of any of the Microsoft Email Services but does not prevent Microsoft from using the Software or Filtering Functionality in normal business operations (e.g., report page breaks are wrong), and (ii) any failure of the Software to conform to the Specifications (other than those failures that constitute Major Errors).

“MS E-Mail” has the meaning set forth in Exhibit C.

“MS IP” means all Microsoft Email Services and any and all domestic or foreign copyrights, moral rights, mask-works, trademarks, trade names, service marks, trade secrets, patents, know-how, designs, algorithms and all other intellectual property and proprietary rights, and all applications and registrations thereto, owned by Microsoft.

“MSN” or “The Microsoft Network” has the meaning set forth in the Recitals.

“MSNIA” means Microsoft Network Internet Access Service.

“MSNIA Users” has the meaning set forth in Section 3.2

“Microsoft Email Services” has the meaning set forth in the Recitals.

“MS Servers” means the servers and Devices designated by Microsoft that are used for the purpose of using, implementing, offering and/or providing the Filtering Functionality to Hotmail Users.

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“.NET Server” means Microsoft’s NET Server product release and all service packs and hot fixes that may be developed for such release, from time to time.

“NDA” has the meaning set forth in Section 10.1.

“Normal Business Hours” means 8 a.m. through 5 p.m. Monday through Friday, Pacific Standard Time, statutory and bank holidays excepted.

“Party” or “Parties” has the meaning set forth in the Preamble.

“Person” means a natural person, a corporation, a limited liability company, a partnership, a trust, a joint venture, a governmental authority, or any other entity or organization.

“Quarterly Steering Meetings” has the meaning set forth in Section 7.

“Rules” means the set of rules used to detect and filter Spam that are provided by BI as part of the Software and that are released from time to time by BI.

“Rules Updates” means any updates or revisions to the Rules used by BI to detect and filter Spam and any new Rules that are released by BI from time to time.

“Service Level Agreement” or “SLA” has the meaning set forth in Section 7.1.

“Software” means the (i) Initial Software, including the Custom Work and other materials set forth in Exhibit B, (ii) all Rules and Rules Updates, (iii) all Enhancements, and (iv) all Documentation and other materials associated with, and any modifications to, any of the foregoing, that BI provides and Microsoft accepts under this Agreement.

“Spam” means any unsolicited commercial electronic mail message, including without limitation any electronic mail message that advertises a product or service for profit or for a business or non-profit purpose.

“Specifications” has the meaning set forth in Section 2.1.

“Term” has the meaning set forth in Section 13.1.

“Ticket” has the meaning set forth in Exhibit C.

“Transfer Notice” has the meaning set forth in Section 17.4.

“User Interface” has the meaning set forth in Section 2.7.

“Windows 2000 Operating System” means the Windows 2000 release of the Windows 2000 operating system, and all service packs and hot fixes that may be developed for such release, from time to time.

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“Wind-Down Period” has the meaning set forth at Section 13.3.(a).

*

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EXHIBIT B

SOFTWARE SCHEDULE

Roll-out Plan and Delivery Schedule

*

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EXHIBIT C

BI SUPPORT SERVICES AND REPORTING PROCEDURES

AND SERVICE LEVEL AGREEMENT (“SLA”)

I. BI Support Services.

BI shall:

• Except as specified in this Agreement, respond to any requests from Microsoft for escalation relative to the Installation Services as promptly as possible, but in no event later than * from the delivery of the request by Microsoft.

• Except as specified in this Agreement, respond to any requests from Microsoft for escalation relative to Enhancements as promptly as possible, but in no event later than * from the delivery of the request by Microsoft.

• Acknowledge notifications from Microsoft of scheduled maintenance and architectural changes, if any, within 24 hours of receipt of notification from Microsoft.

• Monitor Rules and Rule Updates and verification of receipt by Microsoft of Rules and Rule Updates at regularly scheduled intervals set by both BI and Microsoft not to exceed twelve (12) hours.

• Monitor Error responses received from the Brightmail Server(s) and other Software.

• Resend Rules and Rule Updates immediately upon request of Microsoft.

• Isolate and resolve any issues related to network transmission errors, to the extent such errors arise or otherwise occur within BI’s network or systems.

• Provide support for Software and Filtering Functionality, including support with respect to Errors.

II. Required Reporting to Microsoft of Rules and Rule Updates

BI immediately shall report to Microsoft any failure to obtain verifications from Microsoft of receipt of Rules or Rule Updates in accordance with the following procedures.

Step 1: BI shall contact Microsoft via MS E-Mail, *, if a successful verification of receipt is not received by BI from Microsoft within * of the transmission of any Rules or Rules Update to Microsoft. Such e-mail shall contain the information set forth below. BI shall follow up such email

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within * with a telephone call disclosing the same information to *. Microsoft may change such telephone contact information from time to time upon delivery of written notice to BI.

BI trouble ticket # (the “Ticket”)

Date

Time the trouble began

Description of trouble

Person reporting the trouble

Person trouble was reported to

Step 2: Microsoft shall acknowledge the report from BI. The report shall contain all relevant information related to the repair that shall be provided by BI to Microsoft via the MS E-Mail and telephone call required in Step 1.

Step 3: BI shall provide status updates to Microsoft via the MS E-Mail and telephone.

Step 4: The Ticket shall be closed once both Microsoft and BI agree that the Software and the Filtering Functionality are in conformance with the Specifications. Notwithstanding the foregoing, BI shall provide a work-around within *. This needs to be *

III. Microsoft Discretionary Reporting to BI of Rules and Rule Updates.

shall To the extent reasonably possible Microsoft shall give BI * (or greater) notification of any intentions to remove or shut down the Software or Filtering Functionality.

Microsoft has the right to notify BI of outages or other unplanned service interruptions.

Microsoft may request a Rules or Rule Updates file resend.

Microsoft may request support to resolve issues related to the Software and/or Filtering Functionality, and BI shall use all commercially reasonable means to immediately comply with such request in accordance with Section V.

Microsoft shall follow the steps listed below in reporting troubles to BI regarding Rules, Rule Updates and the other matters listed above:

Step 1: Microsoft shall contact BI to request a resend of a Rules or Rule Updates file. The following information shall be provided to BI:

Verbal passcode

C-2

CONFIDENTIAL TREATMENT REQUESTED

Microsoft Name - (to be determined)

Most recent Rules set (time stamp)

Request acknowledgement when file is sent (if appropriate)

Step 2: BI shall provide a time frame for the resend of the Rules or Rule Update file, which shall be no longer than *. BI shall resend such Rules or Rule Update in accordance with such time frame.

Step 3: Microsoft has the right to monitor such Rules or Rule Update file receipt.

Step 4: Microsoft has the right to verify receipt of the Rules or Rule Update file (via viewing of modification date) online.

IV. BI Customer Support

• BI shall provide telephone support from a knowledgeable engineer during the following times:

8 a.m. - 5:30 p.m. Monday through Friday, P.S.T.

This telephone support is located at 301 Howard Street, Suite 1800, San Francisco, CA 94105.

During the period commencing on the Effective Date and terminating at the end of the Term or the end of the Wind-Down Period (whichever is later), BI shall maintain one or more pager or telephone numbers operable twenty four (24) hours a day, seven (7) days a week for use by Microsoft for providing notice of Errors or otherwise requesting support under the Agreement. Pagers used by BI for this purpose shall be capable of receiving and displaying messages. In the notification, Microsoft shall identify whether the Error is a Major Error or a Minor Error.

V. Additional Maintenance and Support Obligations

In addition to those services required under Sections I through VI, BI shall act in accordance with the following rules and procedures and do the following:

A. BI shall provide maintenance and support services to Microsoft for the Software as follows:

(i) the continuous testing and monitoring of the features and functionality of the Software (including the Rules and Rule Updates) (ii) reporting any Errors in the Software (including the Rules and Rule Updates) or Filtering Functionality to Microsoft immediately;

C-3

CONFIDENTIAL TREATMENT REQUESTED

(ii) the correction, modification or substitution of the Software as applicable in order to eliminate Errors reported by Microsoft to BI or discovered by BI, according to the procedure in subsection B below;

(iii) the notification of any changes to the Software which alter the basic program functions of the Software or add one (1) or more new functions.

(iv) responding, in accordance herewith, to the request for support from Microsoft.

B. Immediately upon identifying an Error or receiving notice from Microsoft of an Error, BI shall respond to according to the timeline required by Exhibit C.V.B(i) or (ii) below as applicable. When reporting an Error to BI, Microsoft shall identify the Error as a Major Error or a Minor Error based on Microsoft’s initial evaluation of the Error. If BI identifies an Error BI shall immediately notify Microsoft and such notice shall identify the Error as a Major Error or a Minor Error based on BI’s initial evaluation of the Error BI and Microsoft shall then cooperate to jointly determine whether the reported Error is a Minor Error or a Major Error. Once such determination is made, BI shall proceed as follows:

(i) In the event of a Major Error BI shall either respond to Microsoft’s notice of such error or notify Microsoft of its identification of the Major Error, as the case may be, in no less than 2 hours. BI shall immediately initiate work on developing a workable solution to Microsoft’s satisfaction. BI shall deliver a work-around solution for the Major Error to Microsoft and install such work-around in accordance with the Agreement, within twenty-four (24) hours of Microsoft’s report of the Error to BI or BI’s discovery of the Error, as the case may be. BI shall deliver a fix for the Major Error to Microsoft and install such fix in accordance with the Agreement, within seven (7) calendar days of Microsoft’s report of the Error to BI or BI’s discovery of the Error, as the case may be.

(ii) In the event of a Minor Error, BI shall notify Microsoft of its identification or respond to Microsoft’s notification of BI, as the case may be, within 72 hours. BI shall provide Microsoft with a fix to the Minor Error, to Microsoft’s satisfaction, as soon as reasonably possible, but in no event later than two (2) calendar weeks after Microsoft reports such Error to BI, or BI discovers such Error, as the case may be.

Failure to cure an Error in accordance with this Section V of Exhibit C shall constitute a breach by BI of the warranty in Section 11.2(e).

VI. Overall Performance

The * available on the * (including such *) caused by the * and the * shall * of such * the * on such *. Subject to the mutual written agreement of the Parties, the * on the * may be modified to reflect a better understanding of performance of the Software. MS has the right to measure such *.

C-4

CONFIDENTIAL TREATMENT REQUESTED

The Software shall function in accordance with the Specifications.

VII. Performance Standards

Microsoft and BI will agree upon a methodology to * and * based upon comparison between the * and the *. * will be conducted quarterly. For each quarter in which * are * Microsoft will * BI a * equal to * of the * during such *. For each * in which the *, Microsoft will * BI * equal to * * during such *. Any such * will * together with * the subsequent quarter.

C-5

CONFIDENTIAL TREATMENT REQUESTED

EXHIBIT D

PAYMENT SCHEDULE

I. Non-Recurring Engineering Fee. Microsoft shall pay BI a total of $* in accordance with the following schedule:

A. * days from Microsoft’s receipt of invoice from BI — *

B. * days from Microsoft’s receipt of invoice from BI for delivery of * — *

C. * days from Microsoft’s receipt of invoice to be issued by BI upon BI’s receipt of Microsoft’s written notice of the completion of * (conforms to Specifications with no Major Errors) — *

II. * Service Fees. Unless terminated early, Microsoft shall pay BI the following amounts during the Term of this Agreement (all fees due hereunder * from Microsoft’s receipt of invoice from BI):

*

D-1

EX-10.11.1

EXHIBIT 10.11.1

CONFIDENTIAL TREATMENT REQUESTED

First Amendment to

Software Development and License and Services Agreement

This First Amendment to Software Development and License and Services Agreement (the “First Amendment”) is made and entered into by and between Microsoft Corporation (“Microsoft”) and Brightmail Incorporated (“Brightmail”) as of July 14, 2003.

Recitals

The parties entered into that certain Software Development and License and Services Agreement bearing an Effective Date of June 20, 2002 (“Agreement”).

The parties now desire to amend the Agreement on the terms and conditions provided herein.

The parties hereby agree:

Amendment

1. Section 13.1 of the Agreement is amended to read as follows:

13.1 Term and Renewal Terms. Subject to the other provisions of this Section 13, the Term of this Agreement shall commence on the Effective Date and expire on December 31, 2005.

2. Section 13.2(a) is amended to read as follows:

13.2(a)  Termination Without Cause. Either party may terminate this Agreement effective only on the following dates: (i) December 31, 2004 or (ii) June 30, 2005 (each, a “Termination Effective Date”), by providing not less than thirty (30) days’ written notice prior to the Termination Effective Date to the other party.

3. Exhibit D is deleted in its entirety and replaced with Exhibit D attached to this Amendment.

4. Defined terms in this First Amendment shall have the same meaning as set forth in the Agreement, except as otherwise provided.

5. This First Amendment amends, modifies and supersedes to the extent of any inconsistencies, the provisions of the Agreement. Except as expressly amended by this First Amendment, the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have executed this First Amendment to the Agreement as of the date listed below. All signed copies of this First Amendment to the Agreement are deemed originals. This First Amendment does not constitute an offer by Microsoft. This First Amendment is effective upon execution on behalf of Microsoft and Brightmail by their duly authorized representatives.

MICROSOFT CORPORATION		BRIGHTMAIL INCORPORATED
By	/s/ Blake Irving	By	/s/ Michael Irwin
Name (Print)	Blake Irving	Name (Print)	Michael Irwin
Title	Corporate Vice President	Title	CFO
Date	7/29/03	Date	7/16/03

CONFIDENTIAL TREATMENT REQUESTED

EXHIBIT D

PAYMENT SCHEDULE

I. Non-Recurring Engineering Fee. Microsoft shall pay BI a total of * Dollars ($*) in accordance with the following schedule:

A. * days from Microsoft’s receipt of invoice from BI: *.

B. * from Microsoft’s receipt of invoice from BI for delivery of Phase III: *.

C. * days from Microsoft’s receipt of invoice to be issued by BI upon BI’s receipt of Microsoft’s written notice of the completion of Installation Services (conforms to Specifications with no Major Errors): *.

II. Annual Service Fees. Unless terminated early, Microsoft shall pay BI the following amounts during the Term of this Agreement (all fees due hereunder * days from receipt of invoice by Microsoft from BI, such due date not to be sooner than the beginning of the period listed:

*

EX-10.11.2

EXHIBIT 10.11.2

CONFIDENTIAL TREATMENT REQUESTED

Letter Agreement

This Letter Agreement (“Agreement”), dated September 30, 2003 (“Effective Date”), is made and entered into by and between Brightmail Incorporated (“BMI’) and Microsoft Corporation (“Microsoft” or “Company”).

WHEREAS, BMI provides software and related services (“Software Services”) to Company pursuant to a Software Development and License and Services Agreement bearing an Effective Date of June 20, 2002, as amended on July 14, 2003 (“License Agreement”).

WHEREAS, in connection with the Software Services, Microsoft provided certain * to BMI for its research and development purposes (“Probes”).

WHEREAS, BMI intends to offer new services that would provide certain information (including without limitation the email messages from the Probes) to third parties from or based on the information obtained from the Probes (the “BMI Services”).

WHEREAS, Company desire to allow BMI to share information (including portions of messages from the Probes) to third parties in connection with the BMI Services.

NOW THEREFORE, the parties agree as follows:

1. Company agrees that (i) BMI may share and distribute to third parties information (including without limitation email messages) from, or based on information obtained from, the Probes, where such information was obtained prior to the Effective Date or during the term of this Agreement, and (ii) each such third party may redistribute such information to other third parties or Judicial bodies, governmental agencies, authorities or the like, provided that no information identifying the recipient of such email message will be disclosed. Notwithstanding the foregoing, to the extent that the Probes include * in the License Agreement, if Brightmail becomes aware of any * sent to a * where such message appears to be *, Brightmail will * all instances of such message and will * such message, or information based on such message, * distributed to, or retained by, any third party.

2. This Agreement embodies the entire understanding between the parties and supersedes and replaces any and all prior understandings, arrangements and agreements whether oral or written relating to the subject matter hereof.

3. The rights and obligations of each party hereunder will inure to the benefit of, and be binding upon, each party’s division(s), affiliate(s) and subsidiary(ies). Either party may terminate this Agreement on ninety (90) days prior written notice to the other party. With respect to any information from the Probes made available to Brightmail; during the term of this Agreement, the provisions of this Agreement shall survive any termination of this Agreement. This Agreement may not be assigned or otherwise transferred, whether by law or otherwise, without the prior written consent of the other party except in connection with merger, consolidation or the sale of all or substantially all of its assets.

4. This Agreement shall be construed and controlled by the laws of the State of Washington, and the parties consent to exclusive jurisdiction and venue in the federal courts sitting in King County, Washington, unless no federal subject matter jurisdiction exists, in which case the parties consent to exclusive jurisdiction and venue in the Superior Court of King County, Washington. Brightmail waives all defenses of lack of personal jurisdiction and forum nonconveniens. Process may be served on either party in the manner authorized by applicable law or court rule. In any action to enforce any right or remedy under this Agreement or to interpret any provision of this Agreement, the prevailing party shall be entitled to recover its reasonable attorneys’ fees, costs and other expenses.

CONFIDENTIAL TREATMENT REQUESTED

IN WITNESS WHEREOF, Company has executed this Agreement effective as of the Effective Date.

BRIGHTMAIL INCORPORATED		MICROSOFT CORPORATION
By:	/s/ Enrique Salem	By:	/s/ Blake Irving
	Name: Enrique Salem		Name: Blake Irving
	Title: President & CEO		Title: Corporate Vice President

-2-

EX-10.11.3

EXHIBIT 10.11.3

CONFIDENTIAL TREATMENT REQUESTED

Second Amendment to

Software Development and License and Services Agreement

This Second Amendment to Software Development and License and Services Agreement, as amended (the “Second Amendment”) is made and entered into by and between Microsoft Corporation (“Microsoft”) and Brightmail Incorporated (“Brightmail”) as of November 21, 2003 (“Amendment Effective Date”).

Recitals

The parties entered into that certain Software Development and License and Services Agreement bearing an Effective Date of June 20, 2002, as amended as of July 14, 2003 (“Agreement”).

Microsoft desires to submit Missed Spam Messages (as defined below) to Brightmail to enable Brightmail to create Rules and Rules Updates which will be made part of the Software.

The parties now desire to amend the Agreement on the terms and conditions provided herein.

Capitalized terms not defined herein shall have the respective meanings assigned to them in the Agreement.

The parties hereby agree:

Amendment

1. Definitions.

“Additional Capacity Services Effective Date” shall have the meaning as set forth in Section 3 of this Second Amendment.

“Day” shall mean any continuous 24-hour period.

“Missed Spam Message” shall mean a Spam message sent to the users of Microsoft Email Services that was not filtered b y the Filtering Functionality of the Software as of the date and time such Spam message was received by Microsoft.

“Missed Spam Services” shall mean the services offered under Sections 2 through 4 of this Second Amendment by Brightmail.

“Service Effective Date” shall mean the effective date of the Missed Spam Services for the Original Capacity, or Amendment Effective Date.

2. Missed Spam Submissions. Microsoft may submit to Brightmail up to * (*) Missed Spam Messages per Day (“Original Capacity”) at a subscription price of * dollars ($*) per year (“Original Capacity Subscription Fee”).

3. Additional Capacity. Microsoft shall have the option to purchase one block of add-on capacity of up to an additional * (*) Missed Spam Messages per Day (“Additional Capacity”) at a subscription price of * dollars ($*) per year (“Additional Capacity Subscription Fee”), provided that (1) Microsoft shall notify Brightmail in writing at least * (*) days prior to the first day Microsoft intends to submit such Additional Capacity (the first day after the expiration of such * (*) day period or such other longer period as set forth in Microsoft’s notice, the “Additional Capacity Service Effective Date”), and (2) the Original Capacity and any Additional Capacity in the aggregate shall not at any time exceed * (*) Missed Spam Messages per Day (“Maximum Capacity”). In the event Microsoft desires to submit Missed Spam Messages in excess of the Maximum Capacity, the subscription price and the effective date of such excess capacity shall be mutually agreed upon by the parties in good faith.

CONFIDENTIAL TREATMENT REQUESTED

4. Duties.

a. Microsoft shall be solely responsible for the development and creation of a user interface to enable users of the Microsoft Email Services to submit Missed Spam Messages to Microsoft so Microsoft can group, sort and/or filter for relevance and quality of such messages prior to its submission to Brightmail.

b. Brightmail will, within fifteen (15) days of the Amendment Effective Date, (i) create the infrastructure necessary to accept and process the Missed Spam Messages submitted daily by Microsoft in accordance with this Agreement, and (ii) notify Microsoft in writing upon completion of such infrastructure (the “Service Availability Date”). The mechanism by which Microsoft will submit Missed Spam Messages to Brightmail is via email attachment.

c. Brightmail will determine, within its sole discretion, the appropriate Missed Spam Messages submitted by Microsoft that will be used to create Rules and Rules Updates. Any Rules and Rules Updates created and commercially released by Brightmail will become part of the Software.

d. The parties will mutually agree in good faith the content of any period reports to be generated by Brightmail in connection with the Missed Spam Services.

5. Term

a. The term of this Second Amendment shall commence on the Amendment Effective Date and continue until the earlier of: (i) the date on which the Agreement expires or is terminated, or (ii) this Second Amendment is sooner terminated as otherwise set forth herein.

b. Microsoft shall be permitted for any reason, or for no reason at all, to terminate this Second Amendment on thirty (30) days advance written notice to Brightmail.

c. Upon any expiration or termination of the Agreement or this Second Amendment the terms of Section 6(d) and 7 of this Second Amendment shall survive.

6. Payment Terms

a. Microsoft shall pay the Original Capacity Subscription Fee for the first year of the original Capacity within * (*) days after the Amendment Effective Date.

b. Microsoft shall pay the Additional Capacity Subscription Fee for the first (full or partial) year of any Additional Capacity within * (*) days after the Additional Capacity Services Effective Date, such Additional Capacity Subscription Fee to be pro rated for the fraction of a year represented by the period of time from the Additional Capacity Services Effective Date to the earlier of: (i) the next anniversary of the Service Availability Date, (ii) the date on which this Second Amendment will expire, or (iii) the date on which this Second Amendment will terminate, if Microsoft has notified Brightmail in writing that it is electing to terminate this Second Amendment.

c. Within * (*) days of each anniversary of the Service Availability Date Microsoft shall pay the Original Capacity Subscription Fee for the Original Capacity, and if the Additional Capacity Services have been elected the Additional Capacity Subscription Fee for the Additional Capacity, such fees to be pro rated for the remainder of the term in the, event that either: (i) this Second Amendment will expire prior to the next anniversary of the Service Availability Date, or (ii) Microsoft has notified Brightmail in writing that it is electing to terminate this Second Amendment prior to the next anniversary of the Service Availability Date.

d. In the event that upon the expiration or termination of this Second Amendment Microsoft has paid Original Capacity Subscription Fees or Additional Capacity Subscription Fees, or both, for a term of Missed Spam

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CONFIDENTIAL TREATMENT REQUESTED

Services beyond the actual expiration or termination date, Brightmail shall refund to Microsoft the unused portion of such fees within * (*) days of the actual expiration or termination date.

7. Ownership and Limitations on Use of Data.

a. Except for Rules and Rules Updates which do not include any Missed Spam Messages in their entirety, Microsoft shall own the Missed Spam Messages and all intellectual property rights therein. All rights not explicitly granted by Microsoft are expressly reserved by Microsoft.

b. Brightmail shall not permit any third party to see, access or otherwise use any of the Missed Spam Messages for any purpose. Notwithstanding the foregoing, for individual Missed Spam Messages that, in Brightmail’s reasonable judgment, are suspected to be fraudulent, Brightmail may disclose such Missed Spam Messages to judicial bodies or governmental agencies for the purpose of investigating or prosecuting such fraud, provided that no Information identifying the recipients of such Missed Spam Messages will be disclosed.

c. Brightmail agrees that it will not file any applications for patent rights anywhere in the world with respect to any invention that is, (i) in whole or in part, derived from or based on Missed Spam Messages from the Microsoft Email Service, and (ii) such invention would not be capable of being developed but for Brightmail’s use of the Missed Spam Messages (“Missed Spam Message Invention”). Missed Spam Message Invention shall in no event include any invention that could be derived from, or based on, Third Party Messages (as defined below) (“Brightmail Invention”) so long as Brightmail could establish that such invention is a Brightmail Invention by internal documentation, regardless of whether (A) the Missed Spam Messages share the same or similar characteristics as the Third Party Messages, and/or (B) Brightmail has received or reviewed the Missed Spam Messages prior to the Third Party Messages, and/or (C) the invention was first conceived after Brightmail reviews the Missed Spam Messages. The term ‘Third Party Messages” shall mean any messages that are (1) in the possession of Brightmail other than in the form of the Missed Spam Messages, or (2) disclosed to Brightmail by any third parties other than Microsoft.

d. Brightmail and Microsoft agrees that in the event of a breach of Section 7(c) above, Microsoft shall be entitled to, as Microsoft’s sole and exclusive remedy, injunctive relief against the enforcement by Brightmail against Microsoft or its distributors of Microsoft product or service of any patent claims that relate to the Missed Spam Messages Invention.

e. The provisions of this Section 7 shall survive expiration or termination of the Agreement and this Second Amendment.

8. This Second Amendment amends, modifies and supersedes to the extent of any inconsistencies, the provisions of the Agreement. Except as expressly amended by this Second Amendment, the Agreement, as earlier amended by the First Amendment to Software Development and License and Services Agreement with an Effective Date of July 14, 2003, shall remain in full force and effect.

-3-

CONFIDENTIAL TREATMENT REQUESTED

IN WITNESS WHEREOF, the parties have executed this Second Amendment to the Agreement as of the date listed below. All signed copies of this Second Amendment to the Agreement are deemed originals. This Second Amendment is effective upon execution on behalf of Microsoft and Brightmail by their duly authorized representatives.

MICROSOFT CORPORATION		BRIGHTMAIL INCORPORATED
By	/s/ Blake Irving	By	/s/ Michael Irwin
Name (Print)	Blake Irving	Name (Print)	Michael Irwin
Title	Corporate VP	Title	CFO
Date	12/13/03	Date	21/11/03

EX-10.12

EXHIBIT 10.12

CONFIDENTIAL TREATMENT REQUESTED

MASTER LICENSE AND SERVICES AGREEMENT

ENTERPRISE AGREEMENT

This Master License and Services Agreement (“Agreement”) is entered into                      (“Effective Date”) by and between Brightmail Incorporated, a California corporation (“BMI”) with principal offices at 301 Howard Street, Suite 1800, San Francisco, CA 94105 and Microsoft Corporation, a Washington corporation (“Company”), with principal offices at One Microsoft Way, Redmond, WA 98052-6399.

WHEREAS, BMI develops and licenses client/server software, including related services, which enable Enterprise customers to reduce or eliminate unwanted and/or unsolicited email messages.

WHEREAS, Company, a software publisher, provides Internet access and electronic mail services to its employees. (“Enterprise”).

WHEREAS, Company desires to license BMI’s software and subscribe to its services and BMI desires to grant and render the same.

NOW THEREFORE, in consideration of the mutual covenants contained herein, the Parties agree to the following terms and conditions, which set forth the rights, duties and obligations of the Parties:

1. DEFINITIONS

1.1 “Company Email Service” means the Company’s internet-based email services provided to End Users and which are enabled via Company’s mail transfer agent (“MTA”) as described in Exhibit A.

1.2 “End User” is the employee, also called Blue Badge employees, and authorized by Company as a user of an email mailbox account (“Email Account”) hosted by the Company Email Service.

1.3 “Documentation” is BMI’s standard system administrator documentation that outlines the system architecture and its interfaces. It includes comprehensive guides on installation and operations, and on application program interfaces (“API”).

1.4 “Documentation” is BMI’s standard system administrator documentation that outlines the system architecture and its interfaces. It includes comprehensive guides on installation and operations, and on application program interfaces (“API”).

1.5 “Product” or the “Brightmail^™ Solution Suite” is the Software in object code format, Services, and Documentation. Any Rules, Rule Updates, Updates, and Upgrades that BMI releases become part of the Software.

1.6 “Rule(s)” are explicit, conditional statements, or criteria, that is used and created by BMI to detect and filter Unwanted Email.

1.7 “Rule Update(s)” are updates to the Rules.

1.8 “Server(s)” is a combination of the Software, residing on certain hardware, performing certain processes and functions at Company’s facility which filter incoming End User email and divert, reject discard, or disinfect messages suspected to be Spam and/or Viruses.

1.9 “Service(s)” means (i) the provision of the Software functionality, including Updates, and Upgrades, (ii) the creation of Rules and Rules Updates, and (iii) the provision of “second line” support as described in Exhibit B attached hereto. Services referenced under this Section 1.9 exclude any professional or consulting services referenced under the provisions of Section 6 or Exhibit A Below.

1.10 “Software” is (i) BMI’s proprietary email-filtering software product, (ii) any third party software products which may be integrated with BMI’s email-filtering software product, (iii) Updates and Upgrades, and (iv) Documentation. The Software is more fully described in Exhibit A.

1.11 “Spam” is the mass electronic distribution of unsolicited, bulk email to individual email accounts or email lists. Also referred to as “junk email” or “bulk email”.

1. “Updates” are minor updates, error corrections and bug fixes that do not add significant new functions to the Software, and that are released by BMI or its third party licensors. Updates are designated by an increase to the Software’s release number to the right of the decimal point (e.g., Software 1.0 to Software 1.1). The term Updates specifically excludes Upgrades or new software versions marketed and licensed by BMI as a separate product.

1.12 “Upgrade(s)” are revisions to the Software, which add new enhancements to existing functionality, if and when it is released by BMI or its third party licensors, in their sole discretion. Upgrades are designated by an increase in the Software’s release number, located to the left of the decimal point (e.g., Product 1.x to Product 2.0). In no event shall Upgrades include any new versions of the Software marketed and licensed by BMI or its third party licensors as a separate product.

1.13 “Virus(es)” is a program or code that replicates, that infects another program, boot sector, partition sector or document that supports macros by inserting itself or attaching itself to the medium. Viruses may be “worms” and “trojan horses”.

2. ENTERPRISE LICENSE GRANT. BMI grants to Company, its current and future directly and indirectly majority-owned subsidiaries, and affiliates in which Company has an ownership equal to fifty percent (50%) or more, a non-exclusive, worldwide, non-transferable license to use, reproduce, and install the Product on Servers in machine readable object code form and to use related Documentation provided by BMI for Company’s internal business purposes, solely in connection with the provision of Email Accounts to End Users as part of the Company Email Service. The duration and scope of this license is further defined in Exhibit A. Company will guarantee the obligations and performance of its subsidiaries and affiliates, hereunder.

3. PROPRIETARY RIGHTS

3.1 Proprietary Rights. Title to and ownership of the Product, and other materials provided by BMI to Company will remain the exclusive property of BMI and/or its third party licensors.

3.2 Proprietary Notices. Company and its employees and agents will not remove or alter any BMI trademarks, or other proprietary notices, legends, symbols, or labels appearing on or in copies of the Product or other materials delivered to Company by BMI.

4. NO OTHER RIGHTS. Except as expressly provided herein, no right, title or interest in any Product is granted by BMI to Company.

5. DELIVERY AND ACCEPTANCE. BMI will electronically deliver one (1) copy of the Software and the Documentation to Company. Company will have a maximum of thirty (30) days from the Delivery Date to install, test and accept the Product (“Acceptance Period”), provided that any use of the Software by Company during this period or thereafter which permits End Users to access the benefits of the Service, shall be deemed to constitute

CONFIDENTIAL TREATMENT REQUESTED

acceptance. Acceptance is the acknowledgement from Company that (i) the Product successfully integrates into Company’s technical environment, (ii) Rule delivery is successful, and (iii) functional testing of Product features is complete and satisfactory. Both Parties will sign Exhibit C, the Service Activation Form, to confirm Acceptance and commence the provision of the Services. In the event that Company fails to provide a written rejection of the Product (stating the reasons for its nonacceptance) during the Acceptance Period, the Product will be deemed Accepted.

6. PROFESSIONAL AND CONSULTING SERVICES.

6.1 Integration Services. BMI agrees to provide professional or consulting services to assist Company in integrating the Product with Company’s MTA. The scope and fees for such integration services shall be set forth on Exhibit A or in the applicable professional or consulting services Agreement.

6.2 Training Services. BMI will provide training on the Product. The scope and fees for such training services shall be set forth on Exhibit A or in the applicable professional or consulting services agreement.

6.3 Other Services. If needed by Company, BMI will use reasonable efforts to provide additional consulting or professional services upon Company’s written request. All such services will be provided pursuant to the provisions of Exhibit A or in a separate consulting or professional services agreement. The fees for such consulting or professional services will be set in accordance with BMI’s then-current reasonable fee schedule.

6.4 Ownership. Unless otherwise agreed in writing, any programs, inventions, concepts, documentation, specifications or other written or graphical materials and media created or developed by BMI without the inclusion of any Confidential Information of Company during the course of its performance of this Agreement, or any related consulting or professional service agreements, including all copyrights, patents, trade secrets, trademark, moral rights or other intellectual property rights (“Intellectual Property Right(s)”) associated with the performance of such work shall belong exclusively to BMI and shall, in no way be considered a work made for hire for Company within the meaning of Title 17 of the United States Code (Copyright Act of 1976).

7. TRADEMARKS

7.1 General. Company agrees to refer to its email-filtering product, if it is the same as the Product, as the Brightmail^™ Solution Suite; and/or with the phrase “powered by Brightmail” and/or with any third party licensor trademarks specified by BMI Company also agrees to display the foregoing marks on the following Product features, should they exist:

7.1.1 the web browser interface used to display email suspected to be Spam or Virus impacted, or

7.1.2 on Notifier. See Section 7.3, below.

7.2 Grant of Rights. Company is hereby granted, throughout the term, a limited, non-exclusive, worldwide, nontransferable license to use those BMI trademarks, logos, service marks and trade names (collectively called “BMI Trademarks”) in the form provided by BMI in connection with its obligations under this Section 8, and in accordance with the BMI Trademark guidelines or third party licensor trademark guidelines (“Guidelines”) found or referenced at http://www.brightmail.com/trademark.html as updated from time to time. Company agrees that it will not use any BMI Trademarks or third party licensor trademarks in a manner inconsistent with the Guidelines, or register any BMI Trademarks or third party licensor trademarks in Company’s name, or permit any other third party to register any such trademarks.

7.3 Notice to End Users. Depending upon the available space, and at its discretion, Company will include a banner statement on all electronic notices sent to the End Users receiving the benefit of the Product (“Notifier”). BMI and Company will mutually agree to the format of the banner statement.

8. FEES AND PAYMENTS

8.1 Fees. Company will pay to BMI the Product fees (“Fees”) in accordance with the provisions of Exhibit A. All Fees are non-refundable. Notwithstanding the foregoing both Company and BMI will work together to avoid service interruption due to Company’s modification or replacement of its software, but in the event company introduces beta software on its production mail servers, which causes a need to interrupt the BMI service for greater than 7 days, *.

Company will, when possible, give BMI 14 days notice when a major change is being made and such change has the likeliness of impacting the performance of BMI software.

8.2 Late Payments. All amounts not paid when due under this Agreement will accrue interest at the lesser of one and one-half percent (1.0%) per month or the maximum rate permitted under applicable law.

8.3 Taxes. All prices are exclusive of all taxes, duties or levies, however they are designated or computed, Company will be responsible for, and pay all taxes based on payments due under this Agreement including, but not limited to, sales, use, or value-added taxes, duties, withholding taxes and other assessments now or hereafter imposed, exclusive of taxes based upon BMI’s net income.

8.4 Company’s Reports of Use. On a monthly basis, Company will report and certify to BMI the total monthly number of Mailboxes in sufficient detail to permit the proper calculation of all fees owed to BMI. Company must report either (i) all Mailboxes existing on Company’s email system, or (ii) the number of Mailboxes receiving the benefits of the Services, as noted in Exhibit B.

8.5 Audit of Use. Company will maintain records to track the number of Mailboxes. BMI will have the right to audit no more than once per twelve (12) month period throughout the term of the Agreement, to confirm the accuracy of the number of Mailboxes reported to BMI, and compliance with any other terms and conditions of the Agreement. This right will survive (2) years after termination of the Agreement. Audit will take place during normal business hours and in accordance with Company’s standard security procedures. BMI must give a prior written notice to and five (5) business days in advance of the desired date. The audit will be conducted at BMI’s expense unless such audit reveals an underpayment to BMI in excess of five percent (5%) for the period being audited, in which case Company will bear the reasonable, applicable expenses of the audit.

8.6 Expenses. Except as otherwise provided hereunder or as otherwise agreed to in writing between the Parties each Party is responsible for its own expenses incurred in its own performance hereunder. Any costs or expenses incurred by the Parties will be at the Party’s sole risk and upon the Party’s independent business judgment that such costs and expenses are appropriate.

9. LIMITED WARRANTY AND WARRANTY DISCLAIMERS

9.1 Limited Warranties. BMI WARRANTS TO COMPANY THAT THE PRODUCT, WHEN PROPERLY INSTALLED AND PROPERLY USED IN ACCORDANCE WITH INSTRUCTIONS PROVIDED TO COMPANY BY BMI, WILL SUBSTANTIALLY CONFORM TO THE SPECIFICATIONS IN THE DOCUMENTATION FOR A PERIOD OF NINETY (90) DAYS FROM THE ACCEPTANCE DATE (“WARRANTY PERIOD”). FOR ANY BREACH OF THE WARRANTY CONTAINED IN THIS SECTION 9.1, COMPANY’S EXCLUSIVE REMEDY AND BMI’S ENTIRE LIABILITY, WILL BE PROMPT CORRECTION OF ANY ERROR OR NONCONFORMITY, PROVIDED THAT THE NONCONFORMITY HAS BEEN REPORTED TO BMI BY COMPANY WITHIN THE WARRANTY PERIOD, THIS WARRANTY IS MADE SOLELY TO COMPANY AND IS NOT TRANSFERABLE TO ANY END USER OR OTHER THIRD PARTY.

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NOTWITHSTANDING THE FOREGOING, THE ANTI-VIRUS COMPONENT OF THE PRODUCT IS PROVIDED TO COMPANY ON AN “AS-IS” BASIS WITH NO WARRANTY OF ANY KIND FROM BMI AND/OR ITS THIRD PARTY LICENSOR.

9.2 WARRANTY DISCLAIMER. THE EXPRESS WARRANTIES SET FORTH IN SECTION 9.1 OF THIS AGREEMENT CONSTITUTE THE ONLY PERFORMANCE WARRANTIES WITH RESPECT TO THE PRODUCT. BMI AND/OR ITS THIRD PARTY LICENSORS MAKE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, WHETHER EXPRESS, IMPLIED, OR STATUTORY (EITHER IN FACT OR BY OPERATION OF LAW), AND EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, NEITHER BMI NOR ITS THIRD PARTY LICENSORS WARRANT THAT THE PRODUCT IS ERROR-FREE OR THAT OPERATION OF THE PRODUCT WILL BE UNINTERRUPTED.

9.3 Company represents and warrants that it is an Enterprise and as such, it provides such services to its employees, agents and/or contractors.

10. MAINTENANCE AND SUPPORT SERVICES

10.1 Company’s First Line Support obligations and BMI’s Second Line Support obligations are defined in Exhibit B.

11. INDEMNITY

11.1 Indemnification by BMI. BMI will defend, indemnify and hold Company harmless from any third-party suit or action against Company to the extent such suit or action is based on a claim that the Product infringes any U.S. patent, copyright, trademark or trade secret or other intellectual property right held by such third party; and BMI will pay those damages finally awarded against Company in any monetary settlement of such suit or action. These obligations do not include any claims that arise from the use of the Product in violation of this Agreement or in combination with third party software or hardware not supplied by BMI, or any modification made to the Product by anyone other than BMI. The indemnity obligations set forth in this Section are contingent upon: (a) Company giving prompt written notice to BMI of any such claim(s); (b) BMI having sole control of the defense or settlement of the claim; and (c) at BMI’s request and expense, Company cooperating in the investigation and defense of such claim(s). In the event that the continued use of the Product is enjoined by a court of competent jurisdiction, BMI, at its election will, at its own cost and expense, either (a) procure for Company the right to continue the use of the Product; (b) modify or replace the Product in such a way that the use thereof does not infringe; or as a last resort in the neither of the foregoing alternatives is reasonably feasible, (c) terminate this Agreement by notice to Company and refund to Company an equitable portion of the Fees.

11.2 Indemnification by Company. Company will defend, indemnify and hold BMI harmless from any third-party claim or suit brought against BMI, including a claim or suit initiated by an End User, to the extent such suit or action is based on a claim arising from (i) Company’s use of the Product with any hardware or software that infringes the Intellectual Property Right of a third party in the case where the Product alone would not have infringed in the absence of the combination, (ii) any use of the Product by Company which deviates from the provisions of this Agreement, and (iii) a negligent act or omission of Company in connection with this Agreement Company will pay those damages finally awarded against BMI by a court of competent jurisdiction in any monetary settlement of such suit or action and all reasonable associated costs that are specifically attributable to such claim. The indemnity obligations set forth in this Section are contingent upon (a) BMI giving prompt written notice to Company of any such claim(s); (b) Company having sole control of the defense or settlement of the claim; and (c) at Company’s request and expense, BMI cooperating in this investigation and defense of such claim(s). To the maximum extent permitted by applicable law, this Section states the entire indemnification obligations and liability of Company with respect to claims subject to this Section.

12. TERM AND TERMINATION

12.1 Term. Unless terminated as set forth herein, this Agreement will commence on the Effective Date, and will continue for the length of time specified in Exhibit A (“Initial Term”). Thereafter, this Agreement will automatically renew on the Acceptance Date anniversary for additional one (1) year periods unless either Party gives notice of its intent not to renew, at least sixty (60) days prior to the expiration of the Initial Term, or any one (1) year renewal thereof. The Initial Term and any renewals will collectively be referred to as “Term”.

12.2 Termination. Either Party may terminate this Agreement for its convenience with a sixty (60) day prior written notice after the second (2^nd) year of Services. If either Party defaults in the performance of any material provision of this Agreement, then the non-defaulting Party may terminate the Agreement upon thirty (30) days’ written notice if the default is not cured during such thirty (30) day period. This Agreement may be terminated by one Party immediately at any time, without notice, upon (i) the institution by or against the other Party of insolvency, receivership or bankruptcy proceedings or any other proceedings for the settlement of such Party’s debts, (ii) such other Party making a general assignment for the benefit of creditors, or (iii) such other Party’s dissolution.

12.3 Effect of Termination of Expiration Return of Materials. The license granted in Section 2 will immediately terminate upon the effective date of the termination or expiration. Within thirty (30) calendar days after termination or expiration of this Agreement, Company will deliver to BMI or destroy all copies of the Product and furnish to BMI a certification signed by an officer of Company verifying that such delivery or destruction has been fully effected.

13. CONFIDENTIALITY.

13.1 BMI and Company will, from time to time, in connection with the performance of this Agreement, disclose Confidential Information to each other. Each Party agrees to hold in confidence such Confidential Information of the other party to the same extent that it protects its won similar Confidential Information (and in no event using less than a reasonable degree of care) and to use such Confidential Information only as permitted under this Agreement. The receiving Party will not provide the Confidential Information of the disclosing Party to any third party nor may it disclose such information to any receiving Party employee who has not entered into an agreement with the receiving Party containing confidentiality provisions covering the Confidential Information that are at least as restrictive as those set forth in this Agreement. For purposes of this Agreement “Confidential Information” means (i) information of a party marked “Confidential” reasonably considered by the disclosing party to be of a proprietary or confidential nature; provided that the Product, email probe addresses, information disclosed in design reviews and any pre-production releases of the Product provided by BMI will be expressly designated Confidential Information whether or not marked as such and (ii) any information which under the circumstances surrounding disclosure ought to be considered confidential. Each Party agrees to take all reasonable precautions to prevent any unauthorized disclosure or use of Confidential Information.

13.2 Exceptions. The foregoing restrictions will not apply with respect to any Confidential Information which (i) was or becomes publicly known through no fault of the receiving Party; (ii) was rightfully known or becomes rightfully known to the receiving Party without confidential or proprietary restriction from a source other than the disclosing Party; (iii) is independently developed by the receiving Party without reference to the Confidential Information; (iv) is approved by the disclosing Party for disclosure without restriction in a written document which is signed by a duly authorized officer of such disclosing Party; and (v) the receiving Party is legally compelled to disclose; provided that the receiving Party has given the disclosing Party reasonable notice and opportunity to contest such compulsion to disclose.

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Notwithstanding anything to the contrary herein, the Parties will be free to use, develop, and employ their general skills, know-how, and expertise, and to use, disclose, and employ any generalized know-how, or skills gained or learned during the course of this Agreement, through such information retained solely in the unaided memory of the Party receiving the Confidential Information. The foregoing will not be deemed to grant to either Party a license of any kind.

13.3 Restrictions. Company will not decompile, reverse engineer, disassemble, or otherwise determine, or attempt to derive source code for any Product or Documentation, and agrees not to permit or authorize anyone else to do so. Company will not authorize or enable third parties to determine or attempt to determine the filtering rules used by the Product, under any circumstances.

14. GENERAL PROVISIONS

14.1 Notices. Any notice required or permitted by this Agreement must be in writing and must be sent by facsimile, recognized commercial overnight courier, or United States registered or certified mail, and must be evidence by a delivery confirmation receipt, however sent Notices will be addressed as set forth in Exhibit B.

14.2 Waivers and Amendment. The waiver by either Party of a breach of or a default under any provision of this Agreement will not be construed as a waiver of any subsequent breach of the same or any other provision of the Agreement, nor will any delay or omission on the part of either Party to exercise or avail itself of any right or remedy that it has or may have hereunder operate as a waiver of any right or remedy. No amendment or modification of any provision of this Agreement will be effective unless in writing and signed by a duly authorized signatory of BMI and Company.

14.3 Assignment No Conflict of Interest. Neither party may assign or otherwise transfer any of its rights, obligations or licenses hereunder, whether by law or otherwise, without the prior written consent of the other party, which consent will not be unreasonably withheld.

14.4 LIMITATION OF LIABILITY. EXCEPT FOR A BREACH OF SECTIONS 2, 3 OR 13 OF THIS AGREEMENT, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY LOSS OF PROFITS, LOSS OF BUSINESS, LOSS OF USE OR DATA, INTERRUPTION OF BUSINESS, OR FOR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, EVEN IF SUCH PARTY RECEIVED ADVANCE NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. IN ADDITION TO THE FOREGOING EXCEPTIONS, EXCEPT FOR BMI’S FAILURE TO INDEMNIFY COMPANY UNDER SECTION 11 ABOVE WHICH AMOUNT OF LIABILITY SHALL BE UNLIMITED, IN NO EVENT SHALL BMI’S AGGREGATE LIABILITY ARISING UNDER ANY PROVISION OF THIS AGREEMENT REGARDLESS OF WHETHER THE CLAIM FOR SUCH DAMAGES IS BASED IN CONTRACT, TORT, OR OTHER LEGAL THEORY, EXCEED THE TOTAL AMOUNT PAID TO BMI PURSUANT TO THIS AGREEMENT DURING THE TWELVE (12) MONTHS PRIOR TO THE EVENT GIVING RISE TO SUCH LIABILITY.

14.5 Governing Law. This Agreement will be governed in all respects by the substantive laws of the State of California, United States of America (excluding conflict of laws rules) as applied to agreements entered into and to be performed entirely within the State of California between California residents, without regard to the U.N. Convention on Contracts for the International Sale of Goods.

14.6 Export Controls. Company understands and acknowledges that the Product is subject to regulation and licensing requirement imposed by agencies of the U.S. government, including the U.S. Department of Commerce, which prohibit export, re-export or diversion of certain products and technology to certain countries and for particular end use applications without government approval.

14.7 Relationship of the Parties. The relationship of the Parties under this Agreement is that of independent contractors, and no agency, partnership, joint venture, or employment is created as a result of this Agreement and neither party nor its agents have any authority of any kind to bind the other party in any respect whatsoever.

14.8 Headings. The captions and section and paragraph headings used in this Agreement are inserted for convenience only and will not affect the meaning and interpretation of this Agreement.

14.9 Severability. If the application of any provision or provisions of this Agreement to any particular facts of circumstances will be held to be invalid or unenforceable by any court of competent jurisdiction, then; (a) the validity and enforceability of such provision or provisions as applied to any other particular facts or circumstances and the validity of other provisions of this Agreement will not in any way be affected or impacted thereby; and (b) such provision or provisions will be reformed without further action by the Parties, to and only to, the extent necessary to make such provision or provisions valid and enforceable when applied to such particular facts and circumstances; and, in any event, the remainder of this Agreement will remain in full force and effect.

14.10 Force Majeure. Either Party will be excused from any delay or failure in performance hereunder, except the payment of monies by Company to BMI, caused by reason of any occurrence or contingency beyond its reasonable control, including but not limited to acts of God, earthquake, labor disputes and strikes, riots, war, novelty of product manufacture or other unanticipated product development problems, and governmental requirements. The obligations and rights of the Party so excused will be extended on a day-to-day basis for the period of time equal to that of the underlying cause of the delay; provided that such Party will give notice of such force majeure event to the other Party as soon as reasonably possible.

14.11 Identification/Marketing. With the prior written approval of Company, BMI will have the right to use Company’s name in connection with BMI’s promotional activities and to identify Company as a customer of BMI, including, without limitation, as part of a customer reference list. BMI and Company agree to cooperate in the making of one or more press releases or other public announcements concerning Company’s use of the Product. Any such press release or announcement shall be subject to the prior written approval of both parties prior to release.

14.12 Entire Agreement. This Agreement, including the Exhibits hereto, constitutes the entire agreement between the Parties concerning the subject matter hereof and supersedes all proposals or prior agreements whether oral or written, and all communications between the Parties relating to the subject matter of this Agreement and all past courses of dealing or industry custom. The terms and conditions of this Agreement will prevail, notwithstanding any variance with any purchase order or other written instrument submitted by a Party, whether formally rejected by the other Party or not. The preprinted terms of any Company purchase order issued hereunder will be deemed stricken and of no force or effect. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which taken together will constitute one and the same instrument.

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14.13 Survival. The respective rights and obligations of BMI and Company under the provisions of sections 3, 4, 8, 12.3, 13, and 14 shall expressly survive any termination or expiration of this Agreement.

IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement effective as of the Effective Date.

Attached Exhibits:

A, License

B, Service

C, Service Activation Form

BRIGHTMAIL INCORPORATION		MICROSOFT CORPORATION
By:	/s/ Mike Irwin	By:	/s/ Mark Achzenick
Name:	Mike Irwin		Name: Marl Achzenick
Title:	VP Finance		Title: Sr. Business Mgr.
Date:	October 10, 2002		Date: October 10, 2002
		COMPANY PURCHASE ORDER NUMBER: 2597685

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CONFIDENTIAL TREATMENT REQUESTED

EXHIBIT A

LICENSE

Company will receive the following:

1. THE PRODUCT.

a. Software: Anti-Spam BSS, release 3.x.

b. Company will provide BMI, with * email account addresses: *:

(i) Company agrees to provide at least * of such email addresses, for BMI’s use in detecting content-related risks and for use in BMI’s internal research and development efforts.

(ii) BMI will receive the Company Probes from Company within * of the Effective Date of the Agreement.

(iii) Company and BMI will consider the Company Probes Confidential Information, notwithstanding anything contained herein to the contrary. The Parties’ obligations of confidentiality pertaining to the Company Probes will remain in effect for a period of * after the termination date of this Agreement. Company may not themselves, or through a third party, use the Company Probes for any purpose without the express written consent of BMI. Company will maintain Company Probes for * after termination.

Company specifically warrants that it will not process Spam in such a way as to negatively impact the Product, as determined by BMI in its sole discretion. Specifically, Company agrees that if it chooses to delete Spam instead of offering its End Users BMI’s Gray Mail Service, Company will not send any error-type messages to the senders of the Spam, notifying them that the Spam did not reach Company’s End User(s), or otherwise alerting the sender of Spam to presence of the Product. In addition, Company also agrees to defend, indemnify, and hold BMI harmless from any third-party suit (including suits brought by End Users) if Company deletes Spam without giving its End User(s) a reasonable absence to review the Spam.

2. LICENSES GRANTED TO COMPANY FOR USE ON COMPANY’S EMAIL PLATFORM.

a. Initial Term:             Three (3) Years from the Acceptance Date.

b. Territory: United States

c. Sub-License:           None.

d. Other Licenses:

e. The licenses granted by BMI to Company may only be used on the following:

Company’s MTA: Exchange 2000

Company’s Operating System (“OS”): Win2K

Other:

3. FEES

License and Service Fees are for up to a total of * End Users or up to a total number of * Mailboxes at US $* a year throughout the term of the Agreement.

If the total number of End Users exceeds *, or the total number of Mailboxes exceeds *, the appropriate schedule will apply, as follows:

A. Schedule For the Total Number of Mailboxes Exceeding *

* - * Mailboxes = $* per year;

* - * Mailboxes = $* per year;

* - * Mailboxes = $* per Mailbox per year;

Greater than * Mailboxes = $* per Mailbox per year.

CONFIDENTIAL TREATMENT REQUESTED

B. Schedule For the Total Number of End Exceeding *

* - * End Users = $* per year;

* - * End Users = $* per year;

* - * End Users = $* per year;

* - * End Users = $* per year;

* - * End Users = $* per year;

Greater than * End Users = $* per End User per year.

Should both the total Number of Mailboxes and End Users exceed * and *, respectively, the greater of the two will apply.

Fees herein based on the total number of End Users or Mailboxes found on the Company’s Email Services.

4. PROFESSIONAL AND CONSULTING SERVICE FEES

a. Integration: *; plus all reasonable travel and expenses required in relation to installing the Product. BMI will provide up to two (2) days of Integration services.

b. Training: * per trainer per day. BMI will provide up to two (2) days of training.

c. Additional Service: To be provided in a separate agreement.

5. REPORT OF USE

a. On or before the Application Date, Company will report to BMI the number of Mailboxes existing on its email system.

b. Within five (5) days of the last day of each quarter, Company will submit a quarterly report specifying the number of Mailboxes existing on its email system for the month just finished.

6. PAYMENT TERMS

a. Fees for the first year will be due and payable upon the Effective Date. Such Fee will be based on the greater of the number of Mailboxes existing on Company’s email system for the first year or the Maximum Commitment.

b. Throughout the remaining term of the Agreement, BMI will invoice Company * before the anniversary date of the Acceptance Date.

c. If the number of Mailboxes for a quarter exceeds the number of Mailboxes for which Company has already paid a Fee, or for which has been invoiced by BMI, BMI shall invoice Company for the difference (“Adjustment”). BMI will invoice Company for such Adjustments to the Fees within * of Company’s report to BMI.

d. Company shall pay all invoices within * from date of invoice. BMI will process invoices owed by Company via Microsoft Invoice, stating, without limitation, all amounts due from Company to BMI under this Agreement. The foregoing invoice shall contain sufficient detail (including the separate itemization of the Support, Maintenance, license and any other fees under the Agreement) to allow Company to determine the accuracy of the amount(s) billed. All invoices shall be expressed and paid in U.S. dollars. Company shall remit all payments via ACH electronic payment to BMI’s financial institution as identified by BMI via Company’s ACH Electronic Payment Forms. Payment shall be deemed credited to Company’s account when received by BMI’s financial institution.

7. NOTICES. Below is the contact information for the Parties:

BMI	COMPANY
Contract Contact: *	Contract Contact: *
Business Contact: *	Business Contact: *
Technical Contact: *	Technical Contact: *
301 Howard Street	Address: One Microsoft Way
Suite 1800
San Francisco, CA 94105	City/State/Zip: Redmond, WA 98052
Main Number: *	Main Number: *
Billing: *	Billing:
Fax: *	Fax: *

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EXHIBIT B

SERVICES

1. SECOND LINE SUPPORT. BMI will provide to the Company’s designated technical personnel “Second Line” technical support services for the then current release of the Product and the previous release, as follows:

a. Prepare and send Rules promptly as they are created and release to all BMI customers.

b. Respond to Company’s requests for escalation as it relates to the Service or Software.

c. Acknowledge and respond accordingly to Company’s notification of any scheduled MTA maintenance and Architecture changes.

d. Monitor Rules and Rule Updates and acknowledgements received from the Server(s).

e. Monitor error responses received from the Server(s).

f. Resend Rule and Rule Updates upon Company’s request.

g. Work with Company to isolate and determine any issues related to network transmission errors.

h. Provide twenty-four (24) hour customer service support for the Server and related Software errors or malfunction.

i. Take appropriate corrective action on any Product defects. Error classification is determined by BMI, taking into consideration the input and suggestions of Company.

2. FIRST LINE SUPPORT. Company agrees to provide full “First Line” customer support to End Users and acknowledges that BMI will not be responsible for providing any such services. Company will ensure that a sufficient number of its employees are trained to provide competent First Line End User support, as follows:

a. Maintain Servers.

b. Monitor and respond to alarms associated with the Software.

c. Notify BMI of suspected Software bugs.

d. Provide seventy-two (72) hour notification to BMI of any scheduled mail center maintenance that may impact Service.

e. Notify BMI of any fundamental changes in Company’s Architecture that may impact the Software and Service.

f. Provide BMI with the information that is needed by BMI at the reasonable request, in order to provide Company with any technical and customer support service herein.

g. Install and commence use of any Upgrades within ninety days (90) of receiving such Updates or Upgrades from BMI.

EX-10.13

EXHIBIT 10.13

CONFIDENTIAL TREATMENT REQUESTED

SOFTWARE DEVELOPMENT AND LICENSE AND SERVICES AGREEMENT

This Software Development and License and Services Agreement (the “Agreement”) is made effective as of September 30, 2000 (the “Effective Date”), by and between MICROSOFT NETWORK, LLC, a Washington limited liability company, with its principal offices at One Microsoft Way, Redmond, WA 98052 (“Microsoft” or “MS”), and BRIGHTMAIL, INC., a California corporation, with its principal offices at 301 Howard Street, Suite 1800, San Francisco, CA 94105 (“BI”) (each a “Party” and collectively, the “Parties”).

RECITALS

WHEREAS, Microsoft owns and operates (i) a network of web sites currently known as “The Microsoft Network,” or “MS” with a home page currently located at http://www.msn.com, (ii) an Internet access service known as Microsoft Internet Access Service or “MSNIA,” and (iii) other web-based properties and services (such network, properties and services shall be referred to collectively as the “MSN Services”);

WHEREAS, Microsoft desires to have the right to offer, provide and make available to users of MSN, MSNIA and other MSN Services (collectively, “MSN Users”) software and services that can be used to monitor, manage and filter Spam;

WHEREAS, BI is in the business of providing software (including Rules and Rule Updates) and services, which are capable of monitoring, managing and filtering Spam on web-based properties and services in a timely and efficient manner;

WHEREAS, BI has the necessary technical capability and expertise to provide Microsoft with versions of such software and services capable of monitoring, managing and filtering Spam on MSN, MSNIA and other MSN Services; and

WHEREAS, the Parties desire to enter into an agreement whereby BI shall develop for Microsoft and license to Microsoft such software (including Rules and Rule Updates) and provide to Microsoft such services in accordance with the terms and conditions set forth in this Agreement.

NOW THEREFORE, in consideration of the premises, the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged and accepted, Bl and Microsoft hereby agree as follows:

AGREEMENT

1. DEFINITIONS

1.1 Defined Terms. The capitalized terms contained and used in this Agreement shall have the meanings ascribed to them hereunder, including in the text and at Exhibit A.

1.2 Rules of Construction. The words “hereby,” “herein,” “hereunder” and words of similar import refer to this Agreement as a whole (including any Appendices, Attachments, Exhibits and Schedules hereto) and not merely to the specific Section, paragraph or clause in which such word appears. The terms “include” and “including” shall be understood in their inclusive sense as “include(-ing), but not limited to.”

CONFIDENTIAL TREATMENT REQUESTED

2. DEVELOPMENT, DELIVERY, ACCEPTANCE

2.1 Development and Delivery. BI shall develop for Microsoft the Software associated with each Due Date in accordance with the specifications set forth in Exhibit B (the “Specifications”). BI shall deliver such Software to Microsoft on or before the associated Due Date set forth in Exhibit B.

2.2 Installation Services. Upon each delivery of Software, BI shall install and integrate the Software with the MS Servers and with any other hardware or software designated by Microsoft. BI shall provide all reasonably necessary testing, debugging, initial integration of, and any required fixes of the Software, until functionality of the Software is demonstrated to Microsoft’s satisfaction (collectively, the “Installation Services”). Without limitation to the foregoing, BI shall provide Microsoft with sufficient professional service assistance to test and verify that all Software functions in accordance with the Specifications.

2.3 Enhancements.

2.3.1 BI shall promptly notify Microsoft of the availability and purpose of each Enhancement associated with the Software, or with any substantially similar product or service that BI distributes, offers for sale, sells, markets, promotes, displays, transmits, or otherwise makes available for commercial use. Microsoft shall have the right to request a copy of each such Enhancement within thirty (30) days of its receipt of notice of the availability and purpose of such Enhancement. Within ten (10) days of BI’s receipt of such request from Microsoft, BI shall deliver such Enhancement to Microsoft, and Microsoft shall have the right to test such Enhancement and request that BI make any necessary modifications thereto to cause such Enhancement to conform to the Specifications. Within ten (10) days of BI’s receipt of Microsoft’s request for modifications, BI shall modify such Enhancement in accordance with Microsoft’s request and deliver such modified Enhancement to Microsoft for evaluation by Microsoft in accordance with Section 2.4. For the avoidance of doubt, in the event Microsoft does not request any modifications, Microsoft shall still retain the right to evaluate the Enhancement, in accordance with Section 2.4, upon the expiration of the period for requesting such modifications.

2.3.2 In addition to BI’s obligations under Section 2.3.1, upon Microsoft’s request, BI shall develop, in accordance with such request, other Enhancements for the Software to address or otherwise accommodate any additions, deletions, modifications, updates, upgrades or changes to the Windows 2000 Operating System used with MSN, MSNIA or other MSN Services, which may affect the operation or use of the Software or Filtering Functionality by Microsoft or MSN Users. Unless otherwise specified by Microsoft in writing, BI shall deliver each such Enhancement to Microsoft no later than thirty (30) days following Microsoft’s request for such Enhancement, and Microsoft shall have the right to evaluate such Enhancement in accordance with Section 2.4.

2.3.3 Unless otherwise specified in writing by Microsoft, all Enhancements shall be delivered by BI to Microsoft via a secure File Transfer Protocol.

2.4 Evaluation and Acceptance Procedures.

2.4.1 With respect to each delivery of Software (including each Enhancement but excluding Rules and Rule Updates), Microsoft shall have the right to evaluate such Software within thirty (30) days following the receipt of such Software by Microsoft or, if applicable, the completion of the Installation Services, if any, by BI associated with such Software for the purposes of determining whether such Software contains one or more Errors. Promptly following the completion of such thirty (30) day evaluation period, Microsoft shall notify BI in writing of its decision to accept, conditionally accept, or

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CONFIDENTIAL TREATMENT REQUESTED

reject such Software. Without limitation to the foregoing, Microsoft shall have the right, but not the obligation, to reject or conditionally accept any Software that contains one or more Errors. In the event Microsoft decides to conditionally accept any Software, Microsoft’s notice of such conditional acceptance shall include a description of any Errors which, if fixed, would render such Software acceptable in accordance with the Specifications. BI shall deliver fixed Software to Microsoft within fifteen (15) days of its receipt of such notice of conditional acceptance, and Microsoft thereafter shall have the right to evaluate such fixed Software for an additional thirty (30) day period in accordance with this Section 2.4.1. If BI fails to deliver fixed Software to Microsoft in accordance with this Section 2.4.1, Microsoft shall have the right to (a) reject the Software immediately, or (b) extend the period for fixing such Software for an additional period of time, as determined by Microsoft in its sole discretion.

2.4.2 Without limitation to Section 2.4.1, if BI (a) fails to deliver any portion of the Software identified in Exhibit B by the associated Due Date or as required under Section 2.3 or any other provision of this Agreement, (b) receives a notice of rejection of any portion of such Software from Microsoft, or (c) fails to fix, in accordance with Section 2.4.1, all of the Errors in such Software as described in Microsoft’s notice of conditional acceptance, then Microsoft shall have the right to (x) suspend its performance under this Agreement, or (y) terminate this Agreement pursuant to Section 13.2.2(c). For the avoidance of doubt, Microsoft shall have no obligation to provide BI with any cure period. Without limiting any of Microsoft’s other rights or remedies, all of which are expressly reserved, if Microsoft terminates this Agreement in accordance with this Section 2.4.2, BI immediately shall * to * to BI hereunder.

2.5 Design Review & Specifications Changes. The Parties may mutually agree upon additions, deletions and other changes to the Software which may affect the Specifications at any time during the Term; provided, however, such additions, deletions and other changes to the Software shall be provided by BI to Microsoft * to Microsoft, unless otherwise agreed to in writing by the Parties.

2.6 User Interface. Microsoft shall have the right, but not the obligation, to develop and use a user interface for the Software to facilitate access and use of the Software and Filtering Functionality by MSN Users (a “User Interface”). Microsoft shall determine, in its sole discretion, the design, development, features and functionality of such User Interface and shall have sole control over all decisions relating to such User Interface, including all decisions relating to the desirability or need for such User Interface.

2.7 BI Marks. BI shall provide to Microsoft, within ten (10) days of the Effective Date, the BI Marks for use in accordance with the license granted in Section 4.4.1.

2.8 Reporting Requirement. BI shall provide a written report to Microsoft within fifteen (15) days after the last day of each calendar month describing in reasonable detail all Enhancements that have been developed by or on behalf of BI during the immediately preceding calendar month.

3. RULES AND RULE UPDATES

3.1 Rules and Rule Updates. BI acknowledges and agrees that (i) the Software cannot provide Filtering Functionality to Microsoft or MSN Users unless BI develops Rules and Rule Updates for use in conjunction with the Software and delivers such Rules and Rule Updates promptly to Microsoft; (ii) a positive customer experience by MSN Users is essential for the effective functioning of the MSN Services and the Filtering Functionality; and (iii) Microsoft has the right, in its sole discretion, to monitor and measure the level of satisfaction of MSN Users with respect to the Software and the Filtering Functionality; provided, however, BI shall have the right to provide suggestions to Microsoft for the

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contents of surveys of MSN Users relating to the Software and Filtering Functionality; provided, further, however, Microsoft shall retain sole control over all aspects of such surveys.

3.2 *.

3.2.1 Throughout the Term and the Wind-Down Period, if any, BI shall develop Rules and Rule Updates that are capable of monitoring, managing and filtering Spam and otherwise providing Filtering Functionality in conjunction with the Software. Without limitation to the foregoing, BI shall develop Rules and Rule Updates for commercial use in sufficient quality and quantity to cause the Software to provide Filtering Functionality to Microsoft and MSN Users in a manner that * (* shall be *”).

3.2.2 Microsoft shall notify BI in a commercially reasonable time period following the completion of * in which the Software or Filtering Functionality has * (such * shall be referred to as *. Such * also shall notify BI of each instance when the * for the Software or Filtering Functionality is *, according to the *. Upon * of each *, BI immediately shall take all necessary actions to cause the Software and Filtering Functionality to *. With respect to each * or * this Agreement, such * or *, as the case may be, shall be * based upon BI’s * of *.

3.3 Delivery of Rules and Rule Updates. On the Effective Date, BI shall deliver all Rules and Rules Updates that exist as of the Effective Date to Microsoft, in a format acceptable to Microsoft. In addition, BI shall deliver all other Rules and Rule Updates to Microsoft, in a format acceptable to Microsoft, as soon as such Rules and Rule Updates are available for commercial use. BI shall cause each Rule and Rule Update to include a verification mechanism, which verification mechanism shall verify immediately for BI whether Microsoft has received and processed such Rule or Rule Update. In the event BI does not receive such verification, BI immediately shall notify Microsoft of the availability of such Rule or Rule Update and shall deliver an additional copy of such Rule or Rule Update to Microsoft. BI shall provide such Rules, Rule Updates and services to Microsoft in accordance with Exhibit C.

4. LICENSE GRANTS.

4.1 BI License Grant. Subject to the terms and conditions of this Agreement, BI hereby grants to Microsoft during the Term and the Wind-Down Period, if any, the worldwide, non-exclusive, fully paid-up, irrevocable, right and license to:

4.1.1 make, use, reproduce, perform, display, import, broadcast, transmit, install, host, execute, and store one or more copies of the Software in object code form on any and all servers, including the servers and Devices designated by Microsoft which are used for the purpose of offering or providing the Filtering Functionality to MSN Users (the “MS Servers”);

4.1.2 make, use, reproduce, perform, display, import, broadcast, transmit, install, host, execute, and store one or more copies of the Software in object code form on any and all MS Servers for the purpose of testing the Software and Filtering Functionality and otherwise using the foregoing for Microsoft’s internal purposes and operations relating to the offering or provision of the Filtering Functionality to MSN Users;

4.1.3 promote, perform, execute, transmit, display, use and provide access to the Software for the purposes of providing the Filtering Functionality to MSN Users;

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4.1.4 store, transmit and display the Software’s instructions or data in, through, and on, Devices and other servers and computers which are operated with or otherwise access or use the MS Servers;

4.1.5 copy and store the Software for the purposes of maintaining up to two (2) backup copies of the Software;

4.1.6 copy, transmit, publicly perform or display, adapt and distribute all Documentation via any and all means and media to MSN Users, including any instructions relating to the use of the of the Software or Filtering Functionality via the Internet; and

4.1.7 sublicense the rights and licenses set forth in this Section 4.1, in whole or in part, to one or more Microsoft Affiliates.

4.2 Sublicense Rights. Without limitation of the foregoing Section 4.1, Microsoft shall have the right to grant the necessary rights, licenses, and sublicenses to permit * of the MSN Users to access and use the Software on the MS Servers, via any and all means and media, for the purpose of accessing and using the Filtering Functionality.

4.3 Software Conies. Notwithstanding anything contained in Section 4.1, Microsoft may make and use as many copies of the Software as necessary to accommodate all MSN Users who desire to access or use the Software or Filtering Functionality.

4.4 Trademarks and Branding.

4.4.1 Subject to the terms and conditions of this Agreement, BI hereby grants to Microsoft, during the Term and the Wind-Down Period, if any, a non-exclusive, non-transferable, fully paid-up, irrevocable, personal, worldwide limited purpose right and license to use the BI Marks, in conjunction with the Microsoft Network, MSNIA, and other MSN Services and in connection with the marketing, promotion, offer for sale, sale, and distribution of MSN, MSNIA and other MSN Services incorporating the Software or Filtering Functionality.

4.4.2 Microsoft is not required to use the BI Marks on or in connection with the Software licensed hereunder or to exercise the rights and licenses granted to Microsoft pursuant to Section 4.4.1. Additionally, Microsoft reserves the right to use Microsoft’s own proprietary branding in conjunction with the use, promotion, offer and distribution of MSN, MSNIA and all other MSN Services using the Software or Filtering Functionality. The Parties agree that the Software, at Microsoft’s option, may contain or display Microsoft’s copyrights, trade names, trademarks or service marks (as an indication of the respective authorship, source, sponsorship and/or affiliation of such copyrightable works, trade names, products and/or services).

4.4.3 Subject to the terms and conditions of this Agreement, BI shall have the right to enter into a separate agreement with Microsoft Corporation (“MS Corp.”), on terms and conditions acceptable to MS Corps, to obtain the non-exclusive, non-transferable, royalty-free right during the Term, to use the MS Mark (a) on B1’s web site (with a home page currently located at http://www.brightmail.com) in a pixel size, page position and placement approved in advance by MS Corp. in writing, and (b) in product presentations for the Software which are approved in advance by MS Corp. in writing. For the avoidance of doubt, the agreement shall grant BI the right to use the MS Mark only in materials that also include the logos of other licensees of BI (e.g., not on a stand-alone basis) and only with accompanying text .disclosing the limited nature of BI’s relationship with Microsoft. The Parties

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acknowledge and agree that a breach by BI of any such agreement shall be deemed to be a material breach of this Agreement.

4.5 Reservation of Rights. All rights not explicitly granted by BI under Sections 4.1, 4.2, 4.3, 4.4.1, and 13.5 are expressly reserved by Bl; provided, however, to the extent that BI IP is incorporated in the Software or Filtering Functionality, BI grants to Microsoft the right to use such BI IP solely in accordance with and for the duration of this Agreement, and the Wind-Down Period, if any. All rights not explicitly granted by Microsoft or MS Corp. under Section 4.4.3 are expressly reserved by Microsoft or MS Corp., as the case may be.

4.6 No Obligation to Exercise. For the avoidance of any doubt, Microsoft is not required to exercise the rights and licenses granted in this Section 4 with respect to the Software or otherwise use the Software in accordance with this Agreement for the purposes of providing the Filtering Functionality to MSN Users.

5. FEES

5.1 Fees. Except as expressly set forth in this Agreement, Microsoft shall make fee payments in the amounts and in accordance with the schedule set forth in Exhibit D.

5.2 Additional Services. For any Additional Services requested in writing by Microsoft under Section 6.4, Microsoft shall pay any fees previously agreed to by Microsoft in writing within * of receipt of an undisputed invoice.

6. BI SUPPORT SERVICES

6.1 Routine Maintenance and Quality Fix Engineering Support. During the Term, and the Wind-Down Period, if any, BI shall be solely responsible for the maintenance and support of the Filtering Functionality and the Software including (i) fixing any Errors that are related to the Filtering Functionality, the Software or its interaction or interoperability with the MS Servers or any hardware or software designated by Microsoft; (ii) ensuring that the Software conforms in all material respects to the Specifications; (iii) providing Filtering Functionality and Software support for the identification and resolution of any Errors; (iv) providing technical assistance from the Brightmail Logistics Operations Center (“BLOC”); and (v) generally providing other quality control and engineering support. Without limitation to the foregoing, BI shall provide maintenance and support services in accordance with the Service Level Agreement and response times set forth in Exhibit C (the “Service Level Agreement” or “SLA”).

6.2 First Line Customer Support. Microsoft shall provide initial customer support to MSN Users who are receiving the Filtering Functionality in conjunction with an MSN Service, in a manner determined in Microsoft’s sole discretion; provided, however, Microsoft shall have the right to obtain the second line support from BI in accordance with Section 6.3 for purposes of responding to any inquiries or requests from MSN Users or otherwise providing such customer support.

6.3 Second Line Technical Support. BI shall provide second line support to Microsoft, in a time frame and manner specified by Microsoft, for the Software and the Filtering Functionality, which second line support shall include information, technical support and other assistance relating to the Software and the Filtering Functionality. Notwithstanding anything contained herein to the contrary, BI shall not have any contact or communication with any MSN Users without Microsoft’s prior written consent.

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6.4 Additional Developmental Assistance. In addition to BI’s other obligations under this Agreement, and upon Microsoft’s request, BI shall provide additional development assistance to Microsoft, which development assistance shall include, in Microsoft’s sole discretion, consulting and customization services to permit the use of the Software in connection with additional MSN Services offered by Microsoft (such additional development assistance shall be referred to herein as “Additional Services”), subject to the reasonable availability of personnel and resources. Upon Microsoft’s request, such Additional Services shall be provided to Microsoft by BI via telephone, email, or during onsite visits to the premises of Microsoft on a temporary basis not to exceed two (2) weeks during each month of the Term. Upon Microsoft’s request, and subject to the reasonable availability of BI’s personnel, BI shall provide a reasonable number of BI employees to Microsoft for such Additional Services in accordance with this Section 6.4. BI shall provide such Additional Services to Microsoft *.

6.5 Onsite Requirements. In the event that BI employees or designees are located at the premises of Microsoft for the purpose of providing Installation Services, Additional Services, or fulfilling other support obligations hereunder, including those described in Sections 6.1, 6.3 or 6.4, or for any other reason, BI is not authorized to use, and agrees that it shall not use its location on such premises, or its access to Microsoft employees or facilities, to obtain information or materials from sources at Microsoft other than as expressly authorized by Microsoft. For example, although a BI employee or designee may be given security card access to select facilities at Microsoft, it is Microsoft’s intent to grant access to only the office space allocated to BI and such other spaces as may be designated by Microsoft from time to time. It is not Microsoft’s intent to grant BI employees or designees full access to all areas of the Microsoft premises accessible by security card or to other floors of such premises. BI agrees to direct its employees and designees not to access areas of the premises other than those specifically designated by Microsoft. BI’s employees and designees shall abide by all of the rules, regulations, and security measures adopted by Microsoft while present at its premises, provided that in the event of any inconsistency between such rules, regulations and security measures and this Agreement, this Agreement shall prevail with respect to confidentiality and ownership of and rights in and to MS IP.

7. COMMUNICATION

7.1 Quarterly Steering Meetings. The Parties shall meet at the Microsoft premises located in Redmond, Washington, on a day to be mutually agreed upon by the Parties in the months of September, December, March, and June of each year during the Term to evaluate the relationship of the Parties (the “Quarterly Steering Meetings”). The Parties shall be represented by authorized personnel directly responsible for performance hereunder, and shall bear their own expenses with respect to such Quarterly Steering Meetings. The agenda for each Quarterly Steering Meeting shall include an evaluation of the quality of the Filtering Functionality and Software, and the need for technical updates and upgrades to the Software, including Enhancements, Rules and Rule Updates, service level guarantees, technical issues, and overall customer experience.

8. AFFILIATE OPTION

8.1 Option of Affiliates of Microsoft. For a period of one hundred and forty (140) days following the Effective Date (the “Exercise Period”), MS Corp. shall have the right to notify BI of its desire to enter into one or more agreements with BI to license software (including Rules and Rule Updates) and obtain services from BI relating to the monitoring, managing and filtering of Spam for use in conjunction with Hotmail, ITG or the Software Subscription Division of MS Corp. (collectively “E-Mail Services”), or any combination of such E-Mail Services, on terms and conditions (including financial terms and conditions) that are no less favorable to MS Corp. than the terms and conditions provided to Microsoft under this Agreement (the “Option”). For the avoidance of doubt, MS Corp. shall have the right to exercise the Option separately, at any time during the Exercise Period, for each of the E-Mail Services,

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and any failure by MS Corp. to exercise the Option with respect to one (1) or more of such E-Mail Services shall not be deemed to be a waiver of any right of MS Corp. or Microsoft under this Agreement. With respect to each instance that MS Corp. timely notifies BI of its desire to exercise the Option, upon obtaining such timely notification, BI shall immediately commence to negotiate, and shall continue to negotiate, in good faith with MS Corp. to determine the terms and conditions of a definitive agreement under which MS Corp. would license software (including Rules and Rule Updates) and obtain services from BI subject to this Section 8.1. Without limitation to the foregoing, MS Corp. shall have the right to license software and obtain services from BI for each of the E-Mail Services through the exercise of the Option for a maximum term of three (3) years. The aggregate amount owed by MS Corp. to Bl, with respect to each E-Mail Service, during each year of the term of the agreement applicable to such E-Mail Service, shall * multiplied by the * licensed or obtained by MS Corp. from BI for such E-Mail Service during such year.

8.2 WebTV Option. For a period of eighty (80) days following the Effective Date, WebTV shall have the right to notify BI of its desire to enter into an agreement with BI to license software (including Rules and Rule Updates) and obtain services from BI relating to the monitoring, managing and filtering of Spam on terms and conditions (including financial terms and conditions) that are no less favorable to WebTV than the terms and conditions provided to Microsoft under this Agreement (the “WebTV Option”). Upon obtaining timely notification from WebTV of its desire to exercise the WebTV Option, BI shall immediately commence to negotiate, and shall continue to negotiate, in good faith with WebTV to determine the terms and conditions of a definitive agreement under which WebTV would license software (including Rules and Rule Updates) and obtain services from BI subject to this Section 8.2. Without limitation to the foregoing, WebTV shall have the right to license software and obtain services from BI through the exercise of the WebTV Option for a maximum term of three (3) years, and the aggregate amount owed by WebTV to BI during each year of such term shall * multiplied by * licensed or obtained by WebTV from BI during such year *; provided, however, that for purposes of calculating such * fee only, WebTV shall be deemed to have, at a minimum: *

9. INTELLECTUAL PROPERTY

9.1 Proprietary Rights.

9.1.1 Software. Except as set forth in this Section 9, nothing in this Agreement, and no use of the Software by Microsoft pursuant to this Agreement shall vest in Microsoft or be construed to vest in Microsoft any right of ownership in or to the Software, other than the rights and licenses to use the Software in accordance with the terms and conditions of this Agreement.

9.1.2 User Interface and MS IP. BI acknowledges and agrees that any User Interface developed by Microsoft or by the Parties in accordance with this Agreement shall not be considered Software, Derivative Technology of the Software, or BI IP, but shall be and remain MS IP and the exclusive property of Microsoft, and BI shall have no rights, title or interest in or to any MS IP.

9.1.3 Joint Developments. For the avoidance of doubt, the Parties acknowledge and agree that BI shall develop the Software, provide the services, and perform its other obligations under this Agreement without any assistance, cooperation or Confidential Information (other than the Proprietary Bit Range) from Microsoft and without engaging in any joint development activities or other collaborations with Microsoft (collectively, “Microsoft Assistance”). Notwithstanding the foregoing, if Microsoft desires, in its sole discretion, to provide Microsoft Assistance to BI, then the Parties shall enter into a written agreement, prior to Microsoft’s providing any such Microsoft Assistance, to determine each Party’s respective rights, title and interests in and to the software, other know-how, inventions, works, materials, information and other outputs developed directly or indirectly by Microsoft, BI or the Parties based upon such Microsoft Assistance, and each Party’s respective rights, title and interest in and to the intellectual property and proprietary rights associated with the foregoing, (including any rights, title and interests in and to any domestic or foreign patents, copyrights, trade marks, service marks, trade secrets, and applications and registrations therefor or related to the foregoing) (collectively “Joint Developments”). In the event BI, Microsoft or the Parties * with respect to such Joint Developments, such Joint Developments shall be *.

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9.2 Cooperation. BI shall assign to Microsoft all right, title and interests in and to the User Interface and other MS IP *, to the extent BI acquires or retains such rights, title and interests by operation of law or otherwise. From time to time upon Microsoft’s request, BI shall confirm such assignments by the execution and delivery of such assignments, confirmations, or other written instruments as Microsoft may request. Without limitation to the foregoing, Microsoft shall have the right perfect and protect in its own name all rights, title and interests in and to the User Interface and other MS IP *.

10. CONFIDENTIALITY; PRESS RELEASES

10.1 NDA. The Parties acknowledge and agree that the terms and conditions of the Microsoft Corporation Non-Disclosure Agreement (the “NDA”) entered into by the Parties, on February 16, 2000 are incorporated into this Agreement In the event that any of the incorporated terms of the NDA are inconsistent with or conflict with this Agreement, then the terms of this Agreement shall control. Without limitation to the foregoing, the Parties acknowledge and agree that the Proprietary Bit Range is Confidential Information of Microsoft.

10.2 Injunctive and Equitable Relief. Each Party acknowledges that monetary damages may not be a sufficient remedy for unauthorized disclosure or use of Confidential Information and that each Party may seek, without waiving any other rights or remedies, such injunctive or equitable relief as may be deemed proper by a court of competent jurisdiction.

10.3 Press Releases. Subject to compliance with the rules and regulations of the United States Securities and Exchange Commission and any applicable stock exchanges, neither Party shall issue any press release or make any similar public announcement(s) or disclosure(s) relating in any way whatsoever to this Agreement or the relationship established by this Agreement without the express prior written consent of the other Party. Without limitation to the foregoing, the Parties shall jointly determine the terms, context, format, and text of any announcement relating to this Agreement and the implementation of the provisions and requirements contained herein.

11. REPRESENTATIONS, WARRANTIES AND ADDITIONAL COVENANTS

11.1 Representations and Warranties. Each Party individually represents and warrants to the other that: (i) it is a corporation duly organized, validly existing, and in good standing under the laws of its jurisdiction of formation; (ii) it has full corporate power and authority and has taken all corporate action necessary to enter into and perform all of its obligations under this Agreement; (iii) the execution and delivery of this Agreement and the transactions contemplated herein do not and will not violate, conflict with, or constitute a default under its charter or similar organization document, its bylaws or the terms or provisions of any material agreement or other instrument to which it is a party or by which it is bound, or any order, award, judgment or decree to which it is a party or by which it is bound; (iv) this Agreement is its legal, valid and binding obligation, enforceable in accordance with the terms and conditions hereof, and (v) information, reports and status reports provided by such Party to the other Party pursuant to this Agreement shall be accurate and complete in all material respects.

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11.2 BI Additional Representations. Warranties and Covenants. BI represents, warrants and covenants to Microsoft that

11.2.1 (i) BI has full and sufficient rights to assign and grant the rights and licenses described herein to Microsoft pursuant to this Agreement; (ii) to the best of BI’s Knowledge, the BI Marks, the Software, the Filtering Functionality, * do not infringe, violate or misappropriate any domestic or foreign copyrights, trademarks, service marks, patents, trade secrets, know-how or other intellectual property or proprietary rights of any third party; nor is there any claim of such infringement, violation or misappropriation threatened or pending against BI; (iii) to the best of BI’s Knowledge, Microsoft’s and its Affiliates’, MSN Users’, customers’ and sublicensees’ use of the BI Marks, the Software, the Filtering Functionality, * does not infringe, violate or misappropriate any domestic or foreign copyrights, trademarks, service marks, patents, trade secrets, know-how, or other intellectual property or proprietary rights of any third party;

11.2.2 BI has facilities, personnel, experience and expertise sufficient in quality and quantity to perform all of its obligations hereunder (including without limitation providing the services, and Rules and Rule Updates) in a commercially reasonable manner, and BI shall perform all such obligations (including without limitation the provision of services and, Rules and Rule Updates) in a timely and professional manner, commensurate with the highest professional standards in the industry, and in compliance with all applicable laws. Without limitation of the foregoing, BI shall cause each Rule and Rules Update to be (i) appropriately tailored to its purposes according to the Specifications and Documentation and the purposes presented to MSN Users relating to the monitoring, managing and filtering of Spam; and (ii) up-to-date, complete, and accurately described MSN Users.

11.2.3 BI shall not intentionally impair the operation of MSN, MSNIA or any other MSN Service that uses the Software;

11.2.4 Neither the Software nor the Filtering Functionality shall contain any feature that prevents or interrupts the use of any MSN Service, any MS Server or any Device used by a MSN User, including but not limited to any computer virus, worm, lock, drop-dead device, Trojan-horse routine, trap door, time bomb, or any other code or instruction that may be used to access, modify, delete, damage, or disable the functionality of MSN, MSNIA or any other MSN Service, or prevent or impede the access or use thereof by MSN Users;

11.2.5 the Software * are (i) free from Major Errors, including material programming errors, and from defects in workmanship and materials and shall operate in conformity with the Documentation and Specifications; (ii) capable of providing the Filtering Functionality to an unlimited number of MSN Users; and (iii) in compliance with all applicable laws; and

11.2.6 (i) * shall be valid and in full force and effect promptly after the Effective Date, and shall continue in full force and effect for the duration of the Term and the Wind-Down Period, if any; (ii) * will at all times be *, including all Enhancements and Documentation; (iii) * is and shall be *, (iv) * will be cumulative, with each *; (v) * does not involve any *; (vi) * includes * pursuant to *; and (vii) and BI shall perform all of its obligations under this Agreement *.

11.3 Disclaimer of Warranties. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS SECTION 11, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER TO THE OTHER PARTY OR ANY OTHER ENTITY. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EACH PARTY EXPRESSLY DISCLAIMS TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW ANY AND

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ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WITHOUT LIMITATION (I) WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, (II) WARRANTIES AGAINST INFRINGEMENT OF ANY THIRD PARTY INTELLECTUAL PROPERTY OR PROPRIETARY RIGHTS, (III) WARRANTIES RELATING TO DELAYS, INTERRUPTIONS, ERRORS, OR OMISSIONS, (IV) WARRANTIES RELATING TO THE MS MARKS OR BI MARKS, AND (V) WARRANTIES OTHERWISE RELATING TO PERFORMANCE, NONPERFORMANCE, OR OTHER ACTS OR OMISSIONS BY SUCH PARTY OR ANY AFFILIATE OR OTHER THIRD PARTY.

12. LIMITATION OF LIABILITY

12.1 Limitation: Exclusion of Consequential Damages. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY OTHER PERSON FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE, OR INDIRECT DAMAGES ARISING UNDER OR IN ANY WAY RELATED TO THIS AGREEMENT (INCLUDING LOST PROFITS, LOSS OF BUSINESS OR DATA, BUSINESS INTERRUPTION AND DAMAGES THAT RESULT FROM INACCURACY OF THE INFORMATION OR INCONVENIENCE, DELAY OR LOSS) EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR LOSSES. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, (I) IN NO EVENT SHALL THE LIABILITY OF MICROSOFT FOR DAMAGES OR ALLEGED DAMAGES HEREUNDER, WHETHER IN CONTRACT OR TORT OR ANY OTHER LEGAL THEORY, * HEREUNDER, AND (II) IN NO EVENT SHALL THE LIABILITY OF BI FOR DAMAGES OR ALLEGED DAMAGES HEREUNDER, WHETHER IN CONTRACT OR TORT OR ANY OTHER LEGAL THEORY, *; PROVIDED, HOWEVER, THIS SECTION 12.1 SHALL NOT APPLY TO THE (A) THE INDEMNIFICATION OBLIGATIONS OF BI UNDER SECTION 14, OR (B) THE ABILITY OF MICROSOFT TO OBTAIN INJUNCTIVE RELIEF.

12.2 Allocation of Risks. Each Party acknowledges and agrees that (i) this Agreement represents the complete allocation of risks between the Parties, (ii) it has voluntarily accepted all risks assigned to it herein, and (iii) the disclaimer of warranties and limitation of remedies herein form an essential basis of the bargain.

13. TERM AND TERMINATION

13.1 Term and Renewal Terms. Subject to the other provisions of this Section 13, the Agreement shall commence on the Effective Date and shall have an initial term expiring on the date occurring two (2) years after the Launch Date (the “Initial Term”). Upon expiration of the Initial Term, the Agreement thereafter shall automatically renew for additional one (1) year terms (each such term shall be referred to herein as a “Renewal Term”). Notwithstanding the foregoing, (i) Microsoft shall have the option, at its sole discretion, to terminate this Agreement at the end of the Initial Term provided that Microsoft notifies BI in writing of its intention not to renew this Agreement at least sixty (60) days prior to expiration of the Initial Term; and (ii) each Party shall have the option to terminate this Agreement at the end of each Renewal Term, if any, provided that such Party notifies the other Party in writing of its intention not to renew this Agreement at least sixty (60) days prior to the end of the then current Renewal Term. The Initial Term and all subsequent Renewal Terms, if any, shall be collectively referred to herein as the “Term.”

13.2 Termination.

13.2.1 Microsoft Additional Rights.

(i) Microsoft may terminate this Agreement upon * prior written notice to BI, * during the Term.

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(ii) In addition to any other rights or remedies of Microsoft, all of which are expressly reserved, Microsoft may terminate this Agreement, at any time during the Term, upon * days’ prior written notice to BI in the event (a) BI receives a * indicating that the * (1) a continuous period that equals or exceeds *, or (2) a * days in any three (3) month period, or (b) a BI Claim or an Additional Indemnified Claim has arisen, and with respect to each such BI Claim, BI has not implemented a Cure for such BI Claim within * days of its receipt of notice of termination from Microsoft pursuant to this Section 13.2.1 (ii).

(iii) Microsoft may terminate this Agreement immediately upon delivery of written notice to BI within sixty (60) days following Microsoft’s receipt of any Transfer Notice.

13.2.2 Insolvency and Other Termination Rights. In addition to any other rights or remedies that a Party may have under the circumstances, all of which are expressly reserved, a Party may terminate this Agreement at any time if:

(a) the other Party becomes insolvent or makes any assignment for the benefit of creditors or similar transfer evidencing insolvency; or suffers or permits the commencement of any form of insolvency or receivership proceeding; or has any petition under any bankruptcy law filed against it, which termination pursuant to this Section 13.2.2(a) shall be effective immediately upon written notice or as otherwise specified herein;

(b) except as set forth in Section 2.4.2, Section 13.2.2(a) or Section 13.2.2(c) of this Agreement, the other Party is in material breach of any warranty, representation, term, condition or covenant, and fails to cure such material breach within thirty (30) days after written notice thereof, such termination to become effective immediately upon the expiration of such thirty (30) day period; or

(c) the other Party is in breach of the NDA, such termination to become effective upon the delivery of notice of such breach from the non-breaching Party. In addition, Microsoft shall have the right to terminate this Agreement immediately upon delivery of written notice to BI if BI is in breach of Section 2, Section 3, Section 6, or Section 8.

13.3 Wind-Down Period.

13.3.1 In the event that this Agreement is terminated, Microsoft shall have the right, but not the obligation, subject to the payment of applicable Wind-Down Fees, to continue using the Software and the BI Marks during the Wind-Down Period, to provide the Filtering Functionality to MSN Users (in accordance with the rights and licenses granted hereunder) who requested the Filtering Functionality prior to the effective date of termination of this Agreement. The “Wind-Down Period” shall commence on the effective date of termination of this Agreement and terminate on the earlier of:

(a) the date occurring six (6) months after the effective date of termination of this Agreement, or in the event Microsoft terminates this Agreement pursuant to Section 13.2.1 (iii), the date occurring twelve (12) months after the effective date of termination of this Agreement, or

(b) the date on which this Agreement would have expired by its terms.

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13.3.2 The “Wind-Down Fees” shall be calculated by multiplying the * fee * in which this Agreement is terminated by *; provided, however, such Wind-Down Fees shall be * if (a) this Agreement is terminated by Microsoft pursuant to Section 13.2.1(ii) or Section 13.2.2, (b) BI receives * during the * period prior to the effective date of termination of this Agreement or during the Wind-Down Period, (c) BI receives a * indicating that the * at any time during the * period prior to the effective date of termination of this Agreement or during the Wind-Down Period, (c) BI is in breach of any representation, warranty or covenant under Sections 2, 3, 6, 11.2, 13.5 or 14 of this Agreement, (d) a *has occurred, or (e) a BI Claim or an Additional Indemnified Claim has arisen and, with respect to each such BI Claim, BI has not implemented a Cure for such BI Claim within * days of BI’s delivery of notice of such BI to Claim to Microsoft as required under Section 14.4. The Wind-Down Fees shall be *, with * the Wind-Down Period. Each such * shall be equal to the * divided by the *.

13.3.3 Without limitation to Section 13.6, during the Wind-Down Period, BI shall continue to provide Microsoft with Enhancements in accordance with Section 2.3.1, the Rules and Rule Updates in accordance with Section 3 and support services in accordance with Section 6 hereof.

13.3.4 At the conclusion of the Wind-Down Period, if any, Microsoft shall discontinue use of the Software, and shall remove the Software and any portion thereof from the MS Servers and Microsoft shall return or destroy, as requested by BI, all copies of the Software in Microsoft’s possession.

13.4 Release-Events on Termination.

13.4.1 Except as expressly set forth in this Agreement, the termination or expiration of this Agreement shall not release any Party from any obligations (including payment obligations under Section 5.1 or Exhibit D) that have previously accrued or are expressly required to survive the termination of this Agreement hereunder. Unless this Agreement is terminated by either Party during Period 1 or by Microsoft pursuant to Section 2.4.2, Section 13.2.1(ii) or Section 13.2.2, within thirty (30) days following the date of termination of this Agreement, Microsoft shall pay BI *. Microsoft shall not have any other obligations to pay * under this Agreement pursuant to Section 5.1 or Exhibit D.

13.4.2 Upon termination or expiration of this Agreement, each Party shall, at the other Party’s direction, return or certify as to the destruction of Confidential Information of such other Party. Except as expressly set forth herein, no Party shall be liable to the other for damages of any sort resulting solely from terminating this Agreement in accordance with its terms. Immediately upon termination or expiration of this Agreement for any reason, Microsoft shall cease all use of the BI Marks and the Software subject to the extension provided for in Section 13.3.

13.4.3 If Microsoft’s rights under Section 4 are terminated or suspended, in whole or in part, then all of BI’s rights with respect to the MS Marks shall terminate immediately.

13.5 *

13.5.1 *

13.5.2 *

13.5.3 *

13.5.4 *

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13.5.5 *

13.5.6 *

13.6 Survival. The following Sections shall survive the termination and expiration of this Agreement: 2.4.2 (with respect to *), 2.6, 4.5, 8, 9, 10, 11, 12, 13.3.4, 13.4, 13.5, 13.6, 14, 15, 16 and 17.

In addition, Sections 2 (except for Section 2.1), 3, 4 (except for 4.4.3), 6, 8, and 13.3 shall survive the termination and expiration of the Agreement for the duration of the Wind-Down Period.

14. Indemnification

14.1 Claims. A Party (the “Indemnifying Party”) shall, at its sole expense and the request of the other Party, defend any third-party claim (a “Claim”) brought against such other Party or such other Party’s Affiliates, directors, officers, employees, licensees or independent contractors (each, an “Indemnified Party”) to the extent that such Claim, if true, would constitute a breach of a warranty, representation or covenant of the Indemnifying Party set forth in this Agreement (collectively, the “Indemnified Claims”).

14.2 Additional Indemnification. Without limitation to Section 14.1 hereof, BI (as the Indemnifying Party) shall, at its sole expense, indemnify, defend and hold Microsoft and its Affiliates, directors, officers, employees, licensees, and independent contractors (as Indemnified Parties) harmless from any Claim brought against Microsoft or such other Indemnified Parties the extent such Claim arises from (i) the use of the BI Marks, the Filtering Functionality, *, or the Software in accordance with the terms of this Agreement or * (including without limitation any Claim that the BI Marks, the Filtering Functionality, * or the Software infringes upon or violates or misappropriates any domestic or foreign patents, copyrights, trade secrets, know-how, trademarks, service marks or other intellectual property or proprietary rights of any third party or contains material which is otherwise in violation of applicable law), (ii) the fault or negligence of BI or any of BI’s Affiliates, directors, officers, employees, agents, independent contractors, or distributors or (iii) the execution or performance under * by BI, Microsoft or the *, including any indemnification obligation under * (any Claim described in this Section 14.2 shall be referred to as an “Additional Indemnified Claim”).

14.3 Claims Procedure. The Indemnified Party shall promptly notify the Indemnifying Party in writing of any Indemnified Claim or Additional Indemnified Claim, specifying the nature of the action and the total monetary amount sought or other such relief as is sought therein. The Indemnified Party shall cooperate with the Indemnifying Party at the Indemnifying Party’s expense in all reasonable respects in connection with the defense of any such Indemnified Claim or Additional Indemnified Claim. The Indemnifying Party may upon written notice to the Indemnified Party undertake to control and conduct all proceedings or negotiations in connection therewith, assume and control the defense of such Indemnified Claims or Additional Indemnified Claims, and if it so undertakes, it shall also undertake all other required steps or proceedings to settle or defend any such Indemnified Claim or Additional Indemnified Claim, including the employment of counsel which shall be reasonably satisfactory to the Indemnified Party, and payment of all reasonably incurred expenses. Notwithstanding the foregoing, the Indemnified Party shall have the right to employ separate counsel to provide input to the defense, at the Indemnified Party’s own cost. The Indemnifying Party shall reimburse the Indemnified Party upon demand for any payments made or loss suffered by it at any time after the date of tender, based upon the judgment of any court of competent jurisdiction or pursuant to a bona fide compromise or settlement of Indemnified Claims or Additional Indemnified Claims. The Indemnifying Party shall not settle any Indemnified Claim or Additional Indemnified Claim under this Section 14.3 on the Indemnified Party’s behalf without first obtaining the Indemnified Party’s written permission, which permission shall not be

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unreasonably withheld, and the Indemnifying Party shall indemnify and hold the Indemnified Party harmless from and against any costs, damages and fees reasonably incurred by the Indemnified Party, including fees of attorneys and other professionals, that are attributable to such Indemnified Claims or Additional Indemnified Claims. The Indemnifying Party shall not be responsible for any indemnification obligations arising hereunder pursuant to the terms and conditions of any settlement of an Indemnified Claim or Additional Indemnified Claim by the Indemnified Party unless such settlement was approved by the Indemnifying Party, which approval shall not be unreasonably withheld.

14.4. BI Notice and Remedy. Without limitation to this Section 14, BI shall notify Microsoft immediately upon obtaining Knowledge of any threatened or pending claim arising with respect to the BI Marks, the Software, *, or the Filtering Functionality (“BI Claims”), including any claim that (i) the BI Marks, the Software, *, the Filtering Functionality or any portion thereof, infringes, violates or misappropriates, any domestic or foreign patent, copyright, trademark, service mark, trade secret, know-how, or other intellectual property or proprietary right of any third party or violates applicable laws, or (ii) Microsoft’s or BI’s use of any of the foregoing infringes, violates or misappropriates any domestic or foreign patent, copyright, trademark, service mark, trade secret, know-how, or other intellectual property or proprietary right of any third party or violates applicable laws. Upon delivery of such notice, BI shall, at BI’s expense: (a) procure for Microsoft the right to continue to use the Software, *, and the Filtering Functionality in accordance with the rights and licenses granted to Microsoft under this Agreement or *, as the case may be; or (b) replace or modify the BI Marks or such Software, Source Code or the Filtering Functionality, as the case may be, with a version that does not give rise to such BI Claim, provided that such replacement or modified version complies with the Specifications to Microsoft’s satisfaction, as determined in Microsoft’s sole discretion (each activity undertaken by BI in fulfillment of (a) or (b) shall be referred to as a “Cure”). If a Cure is not available to BI within thirty (30) days of BI’s delivery of notice to Microsoft of such BI Claim, in addition to any damages and expenses reimbursed by BI under this Section 14 and without limiting any of Microsoft’s other rights and remedies all of which are expressly reserved, BI promptly shall *.

15. NOTICES

All notices, requests, demands and other communications which are required or may be given pursuant to the terms of this Agreement shall be in writing and shall be deemed delivered (i) on the date of delivery when delivered by hand; (ii) on the date of transmission when sent by electronic mail or facsimile transmission during Normal Business Hours with telephone confirmation of receipt; provided, an original also is sent the same day in accordance with (iv), below; (iii) one (1) day after dispatch when sent by reputable overnight courier maintaining records of receipt; or (iv) three (3) days after dispatch when sent by registered mail, postage prepaid, return-receipt requested, all addressed as provided below or as amended by a Party from time to time upon five (5) days’ notice to the other Party:

If to Microsoft:	Microsoft Network One Microsoft Way Redmond, WA 98052-6399 Attention: * Facsimile: * Telephone: * E-mail: *
With a required copy to:	Microsoft Corporation One Microsoft Way Redmond, WA 98052-6399 Attention: *

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	Facsimile: * Telephone: * E-mail: *
If to B1:	Brightmail, Inc. 301 Howard Street, Suite 1800 San Francisco, CA 94105 Attention: * Facsimile: * Telephone: * E-mail: *

16. INSURANCE

16.1 Minimum Insurance Coverage. During the Term, and the Wind-Down Period, if any, and for a period of * from the last date BI is obligated to provide or license any Software or services under this Agreement, BI shall procure and maintain insurance reasonably adequate to cover any and all liability that BI may incur as a result of the performance of its obligations under this Agreement or *. Such insurance shall be in a form and with insurers reasonably acceptable to Microsoft and shall consist of policies that comply with the following minimum requirements:

(a) commercial general liability insurance, with policy limits of not less than * for each occurrence of bodily injury or property damage, or combined single limits;

(b) umbrella policy with minimum limits of *; and

(c) professional liability and errors and omissions liability insurance with policy limits of not less than * for each claim with a deductible of not more than *.

16.2 Maintenance. BI’s insurance policy shall: (a) provide professional liability and errors and omissions liability insurance coverage from a date which is not later than the date at which BI began providing services related to or in conjunction with this Agreement; (b) provide that no cancellation, material reduction in amount, or material change in coverage shall be effective until at least thirty (30) days after receipt by Microsoft of written notice thereof; (c) provide for losses payable to Microsoft as its interests may appear, and (d) be reasonably satisfactory in all other respects to Microsoft. BI shall deliver to Microsoft a current certificate of insurance and certifications of renewal of the insurance policies and a report of a reputable insurance broker with respect to such insurance policies at least once during each calendar year during such time as the insurance is in effect and such other supplemental reports with respect thereto as Microsoft may reasonably request from time to time. In the event that Bl’s certificates and reports evidence coverage which Microsoft reasonably determines to be less than that required to meet BI’s obligations under this Agreement, then BI agrees that it shall promptly acquire such coverage and inform Microsoft in writing thereof. Failure by BI to furnish certificates of insurance or failure by Microsoft to request same shall not constitute a waiver by Microsoft of any of the insurance requirements set forth herein. BI shall notify Microsoft, in writing at least thirty (30) days in advance if BI’s insurance coverage is to be canceled or materially altered so as to no longer comply with the requirements of Section 16.1 and this Section 16.2.

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17. GENERAL PROVISIONS.

17.1 Independent Contractors. The Parties are independent contractors with respect to each other hereunder, and nothing in this Agreement shall be construed as creating an employer-employee relationship, a partnership, agency relationship or a joint venture between the Parties. Notwithstanding anything contained in this Agreement to the contrary, each Party shall be solely responsible for the performance of its obligations hereunder, neither Party shall be liable for any breach by the other Party, and nothing contained in this Agreement will be deemed to constitute a guarantee by one Party of performance of any of the obligations of the other Party.

17.2 Independent Development. Nothing in this Agreement shall be construed as restricting Microsoft’s right to acquire, license, sublicense or develop for itself, or have others develop for it, similar software or technology performing the same or similar functions as the Software, or to market and distribute such similar software or technology in addition to, or in lieu of, the Software.

17.3 Governing Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington applicable to contracts made and to be performed wholly within such jurisdiction by residents of such jurisdictions. In the event Microsoft initiates any claim or claims arising in connection with this Agreement, Microsoft hereby irrevocably and unconditionally consents to the exclusive jurisdiction of, and venue in, the state and federal courts sitting in San Francisco County, California. In the event BI initiates any claim or claims in connection with this Agreement, BI irrevocably and unconditionally consents to the exclusive jurisdiction of, and venue in, the state and federal courts sitting in King County, Washington. In any action or suit to enforce any right or remedy under this Agreement or to interpret any provision of this Agreement, the prevailing Party shall be entitled to recover its costs, including reasonable attorneys’ fees and court costs.

17.4 Assignment. Except for Microsoft’s right to grant sublicenses under Section 4, neither Party may assign or transfer control of this Agreement or any rights or obligations hereunder without the other Party’s prior written approval. Any attempted assignment, sublicense, transfer, encumbrance, conveyance or other disposal without such consent shall be void and shall constitute a material default and breach of this Agreement Notwithstanding the foregoing, (i) Microsoft may assign this Agreement or any rights or obligations it may have hereunder to any Person without BI’s prior written consent; provided that Microsoft will remain secondarily liable for its respective obligations in the event of such an assignment unless the assignee assumes such obligations in writing, and (ii) BI may assign its rights and obligations hereunder without Microsoft’s prior written consent solely in connection with a merger, transfer of control, reorganization, or sale of all or substantially all of its assets or equity interests on the condition that (A) BI provides Microsoft with at least sixty (60) days prior written notice of such assignment (a “Transfer Notice”), (B) BI also assigns all of its rights and obligations * simultaneously to the same assignee, and (C) such assignee agrees in writing to assume all of BI obligations under this Agreement and *.

17.5 Construction. In the event that any provision of this Agreement conflicts with governing law or if any provision is held to be null, void or otherwise ineffective or invalid by a court of competent jurisdiction, (i) such provision shall be deemed to be restated to reflect as nearly as possible the original intentions of the Parties in accordance with applicable law, and (ii) the remaining terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect. This Agreement has been negotiated by the Parties and their respective counsel and will be interpreted fairly in accordance with its terms and without any strict construction in favor of or against either Party.

17.6 Excusal of Performance. No Party shall be responsible for, or be in breach of this Agreement, if its performance is delayed for up to thirty (30) days as a result of any act of God, war, fire, earthquake, sickness, accident, civil commotion, act of government, or any other cause wholly beyond its control, including without limitation, denial of service attacks, and not due to its own negligence or that of

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its contractors or representatives, and which cannot be overcome by the exercise of due diligence. Without limitation of the foregoing, a subcontractor’s bankruptcy, inability or failure to pay its obligations as they come due, assignment of its assets for the benefit of creditors, institution of bankruptcy or receivership proceedings against it, or appointment of a trustee, conservator or receiver or other liquidating officer for it or its assets or other financial deficiency shall not be deemed to excuse performance of this Agreement by the Party responsible for such subcontractor’s performance.

17.7 Non-Waiver. No delay or failure by either Party to exercise any right under this Agreement and no partial exercise of any right under the Agreement shall constitute a waiver of that right or any other right No waiver of any breach of any provision of this Agreement shall constitute a waiver of any prior, concurrent or subsequent breach of the same or any other provisions hereof, and no waiver shall be effective unless made in writing and signed by an authorized representative of the waiving Party.

17.8 Headings. Headings in this Agreement are for convenience only and shall not be used to interpret or construe its provisions.

17.9 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute, together with all Appendices, Attachments, Exhibits and Schedules hereto, one and the same instrument.

17.10 Entire Agreement. This Agreement, together with all Appendices, Attachments, Exhibits and other Schedules hereto constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, communications, or proposals, whether oral or written, between the Parties on this subject. This Agreement shall not be modified except by a written agreement dated subsequent to the date of this Agreement and signed on behalf of the Parties by their respective duly authorized representatives.

17.11 Not an Offer. This document does not constitute an offer by any Party to any other Party. This Agreement shall not be effective unless and until signed by both Parties.

17.12 Expenses. Except as set forth in Section 5.2, each Party shall be solely responsible for its own costs and expenses incurred in the preparation, negotiation, implementation, and the performance of its obligations under this Agreement. Without limitation to the foregoing and for the avoidance of doubt, BI shall provide all Enhancements, Rules and Rule Updates, Installation Services and other services required hereunder to Microsoft * to Microsoft, other than as expressly required under Section 6.4.

[SIGNATURES ON FOLLOWING PAGE]

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IN WITNESS WHEREOF,

The Parties have caused this Agreement to be executed by their duly authorized representatives as of the dates set forth below.

MICROSOFT NETWORK, LLC		BRIGHTMAIL, INC.
By:	/s/ Ted Kummers	By:	/s/ Gary P. Hermanson
Name:	Ted Kummers	Name:	Gary P. Hermanson
Title:	VP, MSN-1A	Title:	CEO
Date:	September 30, 2000	Date:	September 30, 2000

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EXHIBIT A

DEFINITIONS

“Additional Indemnified Claim” shall have the meaning set forth in Section 14.2.

“Additional Services” shall have the meaning set forth in Section 6.4.

“Affiliate” shall mean with respect to any Person, any other Person that directly or indirectly Controls, is Controlled by, or is under common Control with such Person.

“Affiliate Option” shall have the meaning set forth in Section 8.1.

“Agreement” shall have the meaning set forth in the Preamble.

“BI” shall have the meaning set forth in the Preamble.

“BI Claims” shall have the meaning set forth in Section 14.4.

“BI IP” shall mean any and all copyrights, moral rights, mask-works, trademarks, trade names, trade secrets, patents, designs, algorithms and all other intellectual property rights, and all applications thereto, owned by BI, which was developed by BI prior to the Effective Date or any time thereafter but not as a result of BI’s exposure to any MS IP or other proprietary information of Microsoft. BI IP that predates this Agreement shall be identified and described by BI in a manner that adequately permits identification of the BI IP and discloses any restrictions applicable to BI’s use of such BI IP, including the source of BI’s authority to use or modify the BI IP in preparation of the Software, including all Software.

“BI Marks” shall mean the Mark(s) depicted in Exhibit E.

“BLOC” shall have the meaning set forth in Section 6.1.

“Business Day” shall mean any day of the week, other than Saturday, Sunday, or a day on which banks are officially closed in the state of Washington.

“Claim” shall have the meaning set forth in Section 14.1.

“Client” shall mean the Software component that provides communications to the Brightmail server set forth in Exhibit B.

“Confidential Information” shall have the meaning set forth in the NDA.

“Control” including its various tenses and derivatives (such as “Controlled”) shall mean, with respect to any Person, the presence of the following: (1) the legal, beneficial or equitable ownership, directly or indirectly, of more than fifty percent (50%) of the capital or voting stock (or other ownership or voting interest, if not a corporation) of such Person, or (2) the ability, directly or indirectly, to direct the voting of a majority of the directors of such Person’s board of directors, or if the Person does not have a board of directors, a majority of the positions on any similar body, whether through appointment, voting agreement or otherwise.

CONFIDENTIAL TREATMENT REQUESTED

“Cure” shall have the meaning set forth in Section 14.4.

“Derivative Technology” shall mean: i) for copyrightable or copyrighted material, any translation (including translation into other computer languages), portation, modification, correction, addition, extension, upgrade, improvement, compilation, abridgment or other form in which an existing work may be recast, transformed or adapted; (ii) for patentable or patented material, any improvement thereon; and (iii) for material which is protected by trade secret, any new material derived from such existing trade secret material, including new material which may be protected by copyright, patent or trade secret.

“Device” shall mean any computer or other device (and all related equipment) which contains the necessary features and functionality to access a server or computer which is operating using the Software.

“Documentation” shall mean shall mean the standard user manuals, operating guides, and all of the material relating to the Software or use thereof, including any and all subsequent versions, whether in print, machine readable media, or any other media provided by BI to Microsoft for use with the Software.

“Due Date” shall have the meaning set forth in Section 2.1.

“Effective Date” shall mean the date hereof.

“E-Mail Services’” shall have the meaning set forth in Section 8.1.

“Enhancement” shall mean an enhancement, improvement, modification, correction of an Error, patch, bug fix, filter update, material update or upgrade to the functionality or features of the Software.

“Error” shall mean a Major Error or a Minor Error.

*

“Exercise Period” shall have the meaning set forth in Section 8.1.

“Filtering Functionality” shall mean the Spam monitoring, management and filtering functionality of the Software (including Rules and Rules Updates) and services to be licensed and provided by BI to Microsoft in accordance with the terms of this Agreement, including the Specifications.

“Hotmail” shall mean the Hotmail e-mail accounts made available by MS Corp. via the Hotmail Service, excluding all such Hotmail accounts established and existing prior to the Effective Date.

“Initial Term” shall have the meaning set forth in Section 13.1.

“Indemnified Claims” shall have the meaning set forth in Section 14.1.

“Indemnified Party” shall have the meaning set forth in Section 14.1.

“Indemnifying Party” shall have the meaning set forth in Section 14.1.

“Installation Services” shall have the meaning set forth in Section 2.2.

“ITG” shall mean the Information Technology Group at Microsoft Corporation.

CONFIDENTIAL TREATMENT REQUESTED

“Joint Developments” shall have the meaning set forth in Section 9.1.3.

“Knowledge” shall mean either (i) actual knowledge or awareness of BI, its Affiliates, officers, directors or key employees, or (ii) knowledge or awareness that could be obtained by any of the foregoing through reasonable due diligence, inquiry or investigation.

“Launch Date” shall mean the first day of the calendar quarter to commence following the date on which Microsoft first uses the Software to make Filtering Functionality generally available to MSN Users. By way of example, if Microsoft first uses the Software to make Filtering Functionality generally available to MSN Users on January 15, 2001, the Launch Date shall be April 1, 2001.

“Major Error” shall mean (i) a failure of the Software to substantially conform to the Specifications and/or Documentation governing such Software, which failure materially impacts the operational or functional performance of such Software or the Filtering Functionality, or (ii) any defect, bug, inefficiency or error that renders the Software inoperative, causes it to fail catastrophically, or prevents Microsoft from using the Software or Filtering Functionality in the normal business operations contemplated by this Agreement.

“Mark” shall mean any trademark, service mark, trade dress, trade name, corporate name, proprietary logo or indicia and other source or business identifier.

“* Mail Box Account” shall mean the * e-mail account associated with a * subscription to MSNIA or * subscription to any service offered by Web TV or by MS Corp. (including each E-Mail Service) and shall expressly * established or used in conjunction with such single MSNIA, Web TV or MS Corp. subscription. The Parties acknowledge and agree that there is only * Mail Box Account associated with * subscription to MSNIA, Web TV, ITG, Hotmail and the Subscription Service Division of MS Corp.

“Microsoft” or “MS” shall have the meaning set forth in the preamble.

“Microsoft Assistance” shall have the meaning set forth in Section 9.1.3.

“Minor Error” shall mean any defect, bug, inefficiency or error, other than a Major Error, including any (i) defect, bug, inefficiency or error that does not prevent Microsoft from using the Software or Filtering Functionality in normal business operations (e.g., report page breaks are wrong), and (ii) any failure of the Software to conform to the Specifications (other than those failures that constitute Major Errors).

“MS Corp.” shall have the meaning set forth in Section 4.4.3.

“MS E-Mail” shall have the meaning set forth in Exhibit C.

“MS IP” shall mean all MSN Services and any and all domestic or foreign copyrights, moral rights, mask-works, trademarks, trade names, service marks, trade secrets, patents, know-how, designs, algorithms and all other intellectual property and proprietary rights, and all applications and registrations thereto, owned by Microsoft.

“MS Mark” shall mean the Mark depicted in Exhibit F; provided, however, that Exhibit F may be modified, replaced or updated by Microsoft or MS Corp. from time to time.

“MSN” or “The Microsoft Network” shall have the meaning set forth in the Recitals.

CONFIDENTIAL TREATMENT REQUESTED

“MSNIA” shall have the meaning set forth in the Recitals.

“MSN Services” shall have the meaning set forth in the Recitals.

“MSN Users” shall have the meaning set forth in the Recitals.

“MS Servers” shall have the meaning set forth in Section 4.1.1.

“NDA” shall have the meaning set forth in Section 10.1.

*.

“Normal Business Hours” shall mean 8 a.m. through 5 p.m. Monday through Friday, Pacific Standard Time.

“Option” shall have the meaning set forth in Section 8.1.

“Party” or “Parties” shall have the meaning set forth in the Preamble.

“Period” shall mean individually Period 1, Period 2, and each Renewal Term.

“Period 1” shall mean the period of time commencing on the Effective Date and terminating one (1) year after the Launch Date.

“Period 2” shall mean the one (1) year period of time commencing immediately upon the expiration of Period 1.

“Person” shall mean a natural person, a corporation, a limited liability company, a partnership, a trust, a joint venture, a governmental authority, or any other entity or organization.

“Proprietary Bit Range” shall mean any and all reserved sets of property identifications that Microsoft provides to BI.

“Quarterly Steering Meetings” shall have the meaning set forth in Section 7.

“Registered Mailboxes’” shall have the meaning set forth in Section 8.2.

“Release Conditions” shall have the meaning set forth in Section 13.5.2.

“Renewal Term” shall have the meaning set forth in Section 13.1.

“Rules” shall mean the set of rules used to detect and filter Spam that are provided by BI as part of the Software and that are released from time to time by BI.

“Rules Updates” shall mean any updates or revisions to the Rules used by BI to detect and filter Spam and any new Rules that are released by BI from time to time.

“Service Level Agreement” or “SLA” shall have the meaning set forth in Section 6.1.

CONFIDENTIAL TREATMENT REQUESTED

“Software” shall mean the (i) software, Documentation, and other materials set forth in Exhibit B, (ii) all Rules and Rules Updates, (iii) all Enhancements and accompanying Documentation, and (iv) all other materials, additional offerings and other modifications to the foregoing that BI provides and Microsoft accepts under this Agreement.

*

“Spam” shall mean any unsolicited commercial electronic mail message, including without limitation any electronic mail message that advertises a product or service for profit or for a business or non-profit purpose.

“Specifications” shall have the meaning set forth in Section 2.1.

“Term” shall have the meaning set forth in Section 13.1.

‘“Ticket” shall have the meaning set forth in Exhibit C.

“Transfer Notice” shall have the meaning set forth in Section 17.4.

“User Interface” shall have the meaning set forth in Section 2.6.

“Web Page” shall mean content in the World Wide Web portion of the Internet accessed via a single URL, and excluding content on other Web Pages accessed via Links in such content.

“Web Site” shall mean a collection of Web Pages related in some manner and interconnected via links within a specific domain.

“Web TV” shall mean Web TV Network, Inc.

“Web TV Option” shall have the meaning set forth in Section 8.2.

“Windows 2000 Operating System” shall mean the Windows 2000 release of the Windows 2000 operating system, and all service packs and hot fixes that may be developed for such release, from time to time.

“Wind-Down Period” shall have the meaning set forth at Section 13.3.1.

“Wind-Down Fees” shall have the meaning set forth at Section 13.3.2.

CONFIDENTIAL TREATMENT REQUESTED

EXHIBIT B

SOFTWARE SCHEDULE

Roll-out Plan and Delivery Schedule

*

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EXHIBIT B-1

SOFTWARE SCHEDULE

*

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EXHIBIT C

BI SUPPORT SERVICES AND REPORTING PROCEDURES

I. BI Support Services.

• Prepare and send Rules and Rules Updates to Microsoft’s email address (*) (the “MS E-Mail”) as new Spam is detected; provided, however, Microsoft may change the MS E-Mail from time to time, upon delivery of notice to BI.

• Respond to any requests from Microsoft for escalation relative to the Software, the Filtering Functionality, the Rules, the Rules Updates, or the file delivery, performance or functionality of the foregoing, as promptly as possible, but in no event later than * following receipt of any request from Microsoft.

• BI will acknowledge notifications from Microsoft of scheduled maintenance and architectural changes, if any, with 24 hours of receipt of notification from Microsoft.

• Monitor Rules and Rule Updates and verification of receipt by Microsoft of Rules and Rule Updates.

• Monitor Error responses received from the Brightmail Server(s) and other Software.

• Resend Rules and Rule Updates immediately upon request of Microsoft.

• Isolate and resolve any issues related to network transmission errors, to the extent such errors arise or otherwise occur within BI’s network or systems.

• Provide support for Software and Filtering Functionality, including support with respect to Errors.

II. Required Reporting to Microsoft of Rules and Rule Updates

BI immediately will report to Microsoft any failure to obtain verifications from Microsoft of receipt of Rules or Rule Updates in accordance with the following procedures.

Step 1: BI will contact Microsoft via the MS E-Mail if a successful verification of receipt is not received by BI from Microsoft within two (2) hours of the transmission of any Rules or Rules Update to Microsoft. Such e-mail will contain the information set forth below. BI will follow up such email within * with a telephone call disclosing the same information to * Microsoft may change such telephone contact information from time to time upon delivery of written notice to BI.

BI trouble ticket # (the “Ticket”)

Date

Time the trouble began

Description of trouble

Person reporting the trouble

Person trouble was reported to

CONFIDENTIAL TREATMENT REQUESTED

Step 2: Microsoft shall have the right to acknowledge the report from BI. The report shall contain all relevant information related to the repair that will be provided by BI to Microsoft via the MS E-Mail and telephone call required in Step 1.

Step 3: BI will provide status updates to Microsoft via the MS E-Mail and telephone.

Step 4: The Ticket will be closed once both Microsoft and BI have acknowledged to Microsoft’s satisfaction resolution of the problem. Notwithstanding the foregoing, BI shall resolve such problem within *.

III. Microsoft Discretionary Reporting to BI of Rules and Rule Updates.

Microsoft shall have the right to give BI * (or greater) notification of scheduled mail center maintenance windows.

Microsoft shall have the right to give BI * (or greater) notification of any intentions to remove or shut down the Software or Filtering Functionality.

Microsoft shall have the right to notify BI of outages or other unplanned service interruptions.

Microsoft may request a Rules or Rule Updates file resend.

Microsoft may request support to resolve issues related to performance metrics of the Software and/or Filtering Functionality, and BI immediately shall comply with such request in accordance with Section V.

Microsoft may request support to resolve issues related to the Software in accordance with Section V.

Microsoft will follow the steps listed below in reporting troubles to BI regarding Rules, Rule Updates and the other matters listed above:

Step 1: Microsoft will contact BI to request a resend of a Rules or Rule Updates file. The following information will be provided to BI:

Verbal passcode

Microsoft Name - (to be determined)

Most recent Rules set (time stamp)

Request acknowledgement when file is sent (if appropriate)

Step 2: BI will provide a time frame for the resend of the Rules or Rule Update file, which will be no longer than *. BI will resend such Rules or Rule Update in accordance with such time frame.

Step 3: Microsoft shall have the right to monitor such Rules or Rule Update file receipt.

Step 4: Microsoft shall have the right to verify receipt of the Rules or Rule Update file (via viewing of modification date) online.

CONFIDENTIAL TREATMENT REQUESTED

IV. BI Customer Support

• BI will provide telephone support from a knowledgeable engineer during the following times:

8 a.m. - 5:30 p.m. Monday through Friday, P.S.T.

This telephone support is located at 301 Howard Street, Suite 1800, San Francisco, CA 94105.

During the period commencing on the Effective Date and terminating at the end of the Term or the end of the Wind-Down Period (whichever is later), BI shall maintain one or more pager or telephone numbers operable twenty four (24) hours a day, seven (7) days a week for use by Microsoft for providing notice of Errors or otherwise requesting support under the Agreement. Pagers used by BI for this purpose shall be capable of receiving and displaying messages. In the notification, Microsoft shall identify whether the Error is a Major Error or a Minor Error.

V. Additional Maintenance and Support Obligations

In addition to those services required under Sections I through VI, BI shall act in accordance with the following rules and procedures and do the following:

BI shall provide maintenance and support services to Microsoft for the Software as follows:

(i) the continuous testing and monitoring of the features and functionality of the Software (including the Rules and Rule Updates) (ii) reporting any Errors in the Software (including the Rules and Rule Updates) or Filtering Functionality to Microsoft immediately;

(ii) the correction, modification or substitution of the Software as applicable in order to eliminate Errors reported by Microsoft to BI or discovered by BI, according to the procedure in subsection 2(b) below;

(iii) the notification of any changes to the Software which alter the basic program functions of the Software or add one (1) or more new functions.

(iv) responding to the request for support from Microsoft.

Immediately upon identifying an Error or receiving notice of an Error from Microsoft, BI shall conduct an initial evaluation of the Error, and BI and Microsoft shall jointly determine whether the reported Error is a Minor Error or a Major Error; provided, however, in the event of a discrepancy between the Parties which is not resolved within * shall have the right to determine whether the Error is a Major Error or a Minor Error. Once such determination is made, BI shall proceed as follows:

(i) In the event that a Major Error has occurred, BI will immediately initiate work on developing an Enhancement and will use its best efforts to deliver such Enhancement to Microsoft and install such Enhancement in accordance with the Agreement, within * of Microsoft’s report of the Error to BI or BI’s discovery of the Error, as the case may be. Without limitation to the foregoing, BI shall provide Microsoft with an Enhancement to cure such Error to Microsoft’s satisfaction no later than * after Microsoft’s report of the Error or BI’s discovery of the Error, as the case may be.

CONFIDENTIAL TREATMENT REQUESTED

(ii) In the event that a Minor Error has occurred, BI will use its best efforts to provide Microsoft with an Enhancement to cure such Minor Error, to Microsoft’s satisfaction, as soon as reasonably possible, but in no event later than * after Microsoft reports such Error to BI, or BI discovers such Error, as the case may be.

VI. Overall Performance

The * available on the * (including such *) caused by the * and the * shall * of such * the * on such *. Subject to the mutual written agreement of the Parties, the * on the * may be modified to reflect a better understanding of performance of the Software. MS shall have the right to measure such *.

The Software shall function in accordance with the Specifications.

CONFIDENTIAL TREATMENT REQUESTED

EXHIBIT D

PAYMENT SCHEDULE

Period 1

(a) Subject to paragraph (b) and (c) below, the * fee for Period 1 of the Agreement shall equal * and shall be payable by Microsoft in the following * and upon satisfaction of the following conditions.

*

(b) *.

(c) “Acceptance” as used in this Exhibit D shall mean accepted by Microsoft pursuant to the procedures set forth in Section 2.4 of the Agreement; provided, however, to the extent BI has timely delivered Software to Microsoft under Section 2.1 and has timely provided the Installation Services for such Software to Microsoft under Section 2.2, and Microsoft has not provided BI with a notice of acceptance, conditional acceptance of rejection of such Software within * following Microsoft’s receipt of such Software and BI’s completion of the foregoing, Microsoft shall be required to make the * to BI associated with such Software at the end of such *. For the avoidance of doubt, Microsoft shall * in the event Microsoft * of such * BI in accordance with Section 2.4 or this paragraph.

Period 2

(a) Subject to paragraph (b) below, the *fee for Period 2 of the Agreement shall equal * and shall be payable *.

(b) *.

Renewal Terms

(a) Subject to paragraph (b) below, the * fee for the initial Renewal Term shall equal *, payable in *.

(b) *.

CONFIDENTIAL TREATMENT REQUESTED

EXHIBIT E

BI MARKS

TRADEMARK USAGE GUIDELINES

Brightmail, Inc. Trademarks

The following words and logos are trademarks, service marks, and/or trade names of Brightmail, Inc.

(collectively “BMI Trademarks”) in the United States and/or other countries:

1. Brightmail, Inc.

[GRAPHIC]

2.

[GRAPHIC]

3.

4. Probe Network

5. Spam Wall

6. Brightmail

Trademark Usage Guidelines

1. <COMPANY NAME> shall submit to BMI product packaging, documentation, marketing materials, proposed signage display images, and intended website printouts in order to permit BMI to determine whether such products, brochures, images and/or website usage comply with BMI’s Trademark Usage Guidelines. All such materials shall be submitted to BMI at least [thirty (30) days] in advance of distribution to customers. <COMPANY NAME> shall submit new samples in the event of a material change in design or quality.

2. Upon qualifying a new release of any Integrated Technology, <COMPANY NAME> may mark each such Integrated Technology with the following BM I Trademarks;

CONFIDENTIAL TREATMENT REQUESTED

[GRAPHIC]

BMI will provide artwork to for the logos, and shall use such artwork without modification, including using the same form, size, and color’s product logo must not be larger than the BMI logos and all Trademarks and must be displayed in a manner clearly indicating that the product is a BMI product as well as a <COMPANY NAME> product. <COMPANY NAME>‘s product packaging and literature must clearly specify the version of BLT software for which the product has been certified.

3. All representations by <COMPANY NAME> of BMI’s Trademarks shall be exact replicas of those used by BMI or shall be used in accordance with these Trademark Usage Guidelines.

4. <COMPANY NAME> shall make such changes to its product packaging, documentation, marketing materials, proposed image displays and/or website design as BMI shall reasonably request to protect the value of BMI Trademarks used by <COMPANY NAME>.

5. The following rules apply to the use of BMI Trademarks in written materials:

a) The “Brightmail” trademark shall always be used as an adjective and be followed by the word “software” or “antispam service.” It shall never be used as a noun or verb, nor shall prefixes or suffixes be attached.

b) In the trademark “Brightmail,” the mark shall be set forth as one word. The “B” shall always be capitalized, the other letters shall always be lowercase or “small-caps.”

c) “Brightmail, Inc.” shall be used without abbreviation. In the trademark “Brightmail, Inc.”, the “B,” and “I” shall always be capitalized. The other letters may be either lowercase or capitalized as well.

d) The first usage of BMI Trademarks in materials shall be followed by a “T”.” Likewise, the first usage of BMI Trademarks (except the “Brightmail, Inc.” word mark and its logo) shall contain a “; or other designation for a footnote. The footnote shall state that “                     and                      are trademarks of Brightmail, Inc.”

6. <COMPANY NAME> agrees not to register any BMI Trademarks or trade names without BMI’s prior written consent, and agrees not to register any confusingly similar trademarks or trade names.

7. Upon written notice by BMI, <COMPANY NAME> shall immediately suspend use of BMI Trademarks and trade names if, in BMI’s reasonable judgment, <COMPANY NAME>‘s Integrated Technology is not of a quality that will enhance the value of BMI’s Trademarks.

CONFIDENTIAL TREATMENT REQUESTED

The MSN Logo for Online Use

Basic Elements of the MSN Logo - Overview

The visual identity developed for MSN helps position the brand as the easiest way to take advantage of the full power of the Web. The MSN logo consists of:

The MSN butterfly – a dynamic, colorful embodiment of the effortless, lively qualities associated with the MSN brand. For online use, a version of the MSN butterfly has been created using flat, RGB colors (with no drop shadow). For printed applications, the MSN butterfly is rendered with subtle shading and a drop shadow.

The MSN letters – a distinctive, proprietary arrangement of specially-drawn lowercase letters.

The trademark symbols – legal requirements which must appear in the positions shown on all applications of the logo.

Configurations

The butterfly, letters, and trademarks are arranged in two approved configurations – horizontal and vertical – which have been accommodate most space requirements. Use the preferred, horizontal version of the logo whenever possible.

Important note: The relationships between the elements of the MSN logo are fixed, and must not be altered in any way. Always use the authorized electronic artwork provided.

Clear Space Requirements

The MSN logo is most effective when surrounded by as much open space as possible. A minimum area of unobstructed clear space must surround the logo (both the horizontal and vertical versions) in all situations.

For online applications, this clear space must be at least 0.25x (“x’ equals the height of the MSN letters), as shown here.

CONFIDENTIAL TREATMENT REQUESTED

Please note that, while these diagrams illustrate the positive, full-color treatment of the logo, the same rules apply for reverse reproduction.

CONFIDENTIAL TREATMENT REQUESTED

Color

The logo should always appear in full-color when used online. For online applications with white or light-colored backgrounds, use the full-color (not reverse) version of the logo.

Reverse Applications

For online applications with black or dark-colored backgrounds, use the full-color reverse version of the logo.

Black is the preferred background color for reverse versions of the logo. Other acceptable background colors include dark blue and other dark colors that provide sufficient contrast, but do not clash visually with the MSN butterfly.

Color Palette Specifications – RGB

The colors shown here play an important part in the MSN visual identity, as a component of the MSN logo, and as accent colors on specific applications. Consistent use of these colors will help in building a distinctive MSN brand personality.

For online applications, use these web-safe RGB specifications.

Minimum Sizes

To ensure high quality reproduction, do not reproduce the MSN logo in sizes smaller than those indicated here.

CONFIDENTIAL TREATMENT REQUESTED

Do not reproduce the horizontal version in sizes narrower than 47 pixels (0.65 inch).

Do not reproduce the vertical version in sizes narrower than 21 pixels (0.3 inch).

Use of the Trademarks with the MSN Logo

The MSN name, and therefore the logotype has changed from a TM to a ^®. This change is being phased into all logo applications. The trademark symbols must appear on all applications of the logo – ^® next to the MSN letters, and TM next to the butterfly.

The trademarks are set in Microsoft Franklin Gothic Heavy, and print in black or blue (or on one-color versions, in that color). The point size of the trademark is based on the width of the logo, as, follows:

Horizontal logo 2.5” and wider: 5 point 2” up to 2.5”: 4 point below 2”: 3 point Vertical logo 1.5” and wider: 5 point below 1.5”: 3 point Positions the trademarks according to the diagrams to the right.

CONFIDENTIAL TREATMENT REQUESTED

Misuses – General

These examples illustrate incorrect use of the MSN logo for online use. While each example depicts only one version of the logo (horizontal or vertical), the principles apply to both.

Always use the authorized electronic artwork provided.

CONFIDENTIAL TREATMENT REQUESTED

EX-10.13.1

EXHIBIT 10.13.1

CONFIDENTIAL TREATMENT REQUESTED

SOFTWARE DEVELOPMENT AND LICENSE AND SERVICES AGREEMENT

This Software Development and License and Services Agreement (the “Agreement”) is made effective as of January 4, 2001 (the “Effective Date”), by and between WEBTV NETWORKS, INC., a Delaware corporation, with its principal offices at 1065 La Avenida, Mountain View, CA 94043 (“WebTV”), and BRIGHTMAIL, INC., a California corporation, with its principal offices at 301 Howard Street, Suite 1800, San Francisco, CA 94105 (“BI”) (each a “Party” and collectively, the “Parties”).

RECITALS

WHEREAS, BI is in the business of providing software (including Rules and Rule Updates) and services, which are capable of monitoring, managing and filtering Spam on web-based properties and services in a timely and efficient manner;

WHEREAS, BI and Microsoft Network LLC (“MSN”) have entered into Software Development and License and Services Agreement dated September 30, 2000 (the “MSN Contract”) which provides that WebTV may exercise an option to separately license the BI technology and procure services which are available to MSN under the MSN Contract; and

WHEREAS, the Parties desire to enter into an agreement whereby BI shall license to WebTV such software (including Rules and Rule Updates) as set forth on Exhibit B attached hereto, and provide to WebTV such services in accordance with the terms and conditions set forth in this Agreement.

NOW THEREFORE, in consideration of the premises, the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged and accepted, BI and WebTV hereby agree as follows:

1. Adoption of MSN Contract. The Parties agree to adopt and be bound by the terms of the MSN Contract, which terms are incorporated herein by reference except to the extent the MSN Contract is modified by this Agreement. The Parties acknowledge and agree they have reviewed and understand the terms of the MSN Contract. For purposes of this Agreement, Exhibits A, C and E of the MSN Contract are hereby adopted and incorporated herein by reference. For purposes of this Agreement, Exhibits B and D of the MSN Contract are deleted and are replaced by Exhibits B and D attached hereto and incorporated herein by reference. For purposes of this Agreement, all references in the MSN Contract to “Microsoft”, “MS Corp.”, “MS”, “MSN”, “MSNIA” and the like shall mean “WebTV.” For the avoidance of doubt, WebTV shall be able to use the Software in the provision of its services to any of its users regardless of the designation or title of such services when provided.

1

CONFIDENTIAL TREATMENT REQUESTED

2. No Amendment of MSN Contract. The Parties agree this Agreement does not constitute an amendment or modification of the MSN Contract, which agreement WebTV is not a party to, and that the MSN Contract remains fully in force and effect without amendment or modification, notwithstanding this Agreement.

3. Defined Terms. For purposes of this Agreement, all capitalized terms used in this Agreement (and as incorporated from the MSN Contract) which are defined in the MSN Contract shall have the same meaning in this Agreement as they have in the MSN Contract, unless expressly modified herein.

4. * Level. For purposes of this Agreement, Section 3.2 of the MSN Contract is deleted and replaced as follows:

3.2.1 Throughout the Term and the Wind-Down Period, if any, BI shall develop Rules and Rule Updates that are capable of monitoring, managing and filtering Spam and otherwise providing Filtering Functionality in conjunction with the Software. Without limitation to the foregoing, BI shall develop Rules and Rule Updates for commercial use in sufficient quality and quantity to cause the Software to provide Filtering Functionality to WebTV Network Users in a manner that identifies and filters *. * directed to a large number (currently at approximately * which may change from time to time) of * WebTV Network User mailboxes and determines *.

3.2.2 WebTV shall notify BI in a commercially reasonable time period following * in which the Software or Filtering Functionality has *. Such * also shall notify BI of each instance when * of the Software or Filtering Functionality is *, according to the results of *. Upon receipt of each *, BI immediately shall take all necessary actions to cause the Software and Filtering Functionality to *. With respect to each * or Wind-Down Fees payment due under this Agreement, such * or Wind-Down Fees payment, as the case may be, shall be *.

5. Fees. For purposes of this Agreement, Section 5.1 of the MSN Contract is deleted and replaced as follows: Except as expressly set forth in this Agreement, WebTV shall make fee payments in the amounts and in accordance with the schedule set forth in Exhibit D attached hereto.

6. Quarterly Meetings. For purposes of this Agreement, Section 7.1 of the MSN Contract is amended to delete Redmond, Washington as the place of quarterly meetings. The Parties shall agree on the location of such meetings.

2

CONFIDENTIAL TREATMENT REQUESTED

7. WebTV Option. As of the Effective Date, WebTV hereby exercises the WebTV Option specified in Section 8.2 of the MSN Contract, according to the terms of this Agreement.

8. Term and Renewal Terms. For purposes of this Agreement, Section 13.1 of the MSN Contract is deleted and replaced as follows: Subject to the other provisions of Section 13 of the MSN Contract, this Agreement shall commence on the Effective Date and shall have an initial term expiring on the date occurring three (3) years after the Launch Date the “Initial Term”). Upon expiration of the Initial Term, the Agreement thereafter shall renew for additional one (1) year terms (each such term shall be referred to herein as a “Renewal Term”) subject to written agreement by the Parties on any new terms (including fees) for such Renewal Term. Notwithstanding the foregoing, each Party shall have the option to terminate this Agreement at the end of each Renewal Term, if any, provided that such Party notifies the other Party in writing of its intention not to renew this Agreement at least sixty (60) days prior to the end of the then current Renewal Term; provided, however, that if prior to expiration of a Term, one party sends to the other party an offer of new terms (including fees) for a particular Renewal Term and the receiving party does not accept those terms in writing, then the Renewal Term shall be subject only to the same terms as the previous Term unless one party delivers notice in writing of its intention not to renew this Agreement within the above sixty (60) day time limit in which case the Agreement shall expire. The Initial Term and all subsequent Renewal Terms, if any, shall be collectively referred to herein as the “Term.”

9. Notices. Notwithstanding anything to the contrary in Section 15 of the MSN Contract, for purposes of this Agreement, notices to the Parties shall be sent to the addresses as follows:

If to WebTV:	WebTV Network, Inc. 1065 La Avenida Mountain View, CA 94043 Attention: * Facsimile: Telephone: * E-mail: *
Copy to:	WebTV Network, Inc. 1065 La Avenida Mountain View, CA 94043 Attention: * Facsimile: * Telephone: * E-mail:

3

CONFIDENTIAL TREATMENT REQUESTED

If to BI: Brightmail, Inc. 301 Howard Street, Suite 1800 San Francisco, CA 94105 Attention: * Facsimile: * Telephone: * E-mail: *

10. Insurance. Notwithstanding the provisions of Section 16 of the MSN Contract, BI shall have no additional insurance obligations under this Agreement.

11. Governing Law and Venue. For purposes of this Agreement, Section 17.3 of the MSN Contract shall be deleted, and replaced as follows: This Agreement shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and to be performed wholly within such jurisdiction by residents of such jurisdictions. In any action or suit to enforce any right or remedy under this Agreement or to interpret any provision of this Agreement, the prevailing Party shall be entitled to recover its costs, including reasonable attorneys’ fees and court costs.

12. Exceptions. The following provisions of the MSN Contract shall be deleted and shall not apply for purposes of this Agreement: Sections , 8.1.

IN WITNESS WHEREOF,

The Parties have caused this Agreement to be executed by their duly authorized representatives as of the dates set forth below.

WEBTV Networks, INC.		BRIGHTMAIL, INC.
By:	/s/ William H. Yundt	By:	/s/ Phil Fraher
Name:	William H. Yundt	Name:	Phil Fraher
Title:	Vice President	Title:	CFO
Date:		Date:	1/4/2001

4

CONFIDENTIAL TREATMENT REQUESTED

EXHIBIT B

SOFTWARE SCHEDULE

*

5

CONFIDENTIAL TREATMENT REQUESTED

EXHIBIT D

PAYMENT SCHEDULE

(a) After Acceptance of the Software pursuant to Section 2.4 of the Agreement, and within * (*) days following the end of *, WebTV will pay BI an amount equal to *($*) multiplied by *:

*

Within * (*) days following the end of each *, WebTV will report the * by WebTV from BI during such *; and pay BI an amount equal to * ($*) multiplied by *.

(b) With respect to each * fee, such * fee shall be *.

6

EX-10.13.2

EXHIBIT 10.13.2

23 January 2004

Matthew George

Director Network Services

MSNTV Network, Inc.

1065 La Avenida

Mountain View, California 94043

Re: Software Development and License and Services Agreement, Launch Date of March 26, 2001, term extended to June 28, 2004

Dear Mr. George:

This letter constitutes our agreement to extend our existing Term scheduled to end and/or renew on March 25, 2004. For the purposes of negotiating new terms for a Renewal Term, the parties agree to extend the term of the agreement to June 28, 2004 (“Initial Term”). Upon notice provided not later than June 28, 2004, MSNTV (as successor in interest to WebTV) will either renew the Agreement, subject to any mutually agreed renewal terms, or provide its notice not to renew. Should MSNTV give its notice not to renew, MSNTV shall have the right to wind-down in accordance with Section 13.3 of the Agreement. The foregoing constitutes the only modification to the Agreement. All other terms and conditions of the Agreement will continue to apply. All terms not defined herein will have the same meanings as provided by the Agreement.

Please sign below to indicate your agreement with the above.

Regards,

/s/ Mike Irwin

Mike Irwin

CFO

I have read, understood and agree to the above

As an authorized signer on behalf of MSNTB:

/s/ Matthew George

Matthew George

Cc: Law and Corporate Affairs

WebTV Network, Inc.

1065 La Avenida

Mountain View, CA 94043

EX-10.13.3

EXHIBIT 10.13.3

CONFIDENTIAL TREATMENT REQUESTED

AMENDMENT NUMBER ONE TO

THE SOFTWARE DEVELOPMENT AND LICENSE AND SERVICES AGREEMENT

This Amendment Number One to the Software Development and License and Services Agreement (“Amendment 1”) is entered into by and between Brightmail Incorporated, a California corporation, with a place of business at 301 Howard Street, Suite 1800, San Francisco, California 94105 (“BI”), and MICROSOFT CORPORATION (successor in interest to WebTV Networks), a Washington corporation, with principal offices at One Microsoft Way, Redmond, WA 98052, (“Microsoft”). The effective date of this Amendment 1 is 20 April 2004 (“Effective Date”).

BACKGROUND

A. Effective as of January 4, 2001, BI and Microsoft entered into a Software Development and License and Services Agreement (“Agreement”) with regard to Microsoft licensed rights to the Software for the purpose of using the Brightmail^® Solution Suite and related services, and which adopted and incorporated the terms of a certain Software Development and License and Services Agreement dated September 30, 2000, referred to as the “MSN Contract.”

B. MICROSOFT and BI now desire to amend the Agreement to modify the insurance requirements.

C. Unless indicated otherwise in this Amendment 1, capitalized terms used and not defined herein have the same meanings as in the Agreement.

Amendment

NOW, THEREFORE, the parties mutually agree to amend the Agreement as follows:

1. AMENDMENT. The Agreement is modified by deleting the requirement of * in Section 16.1 (c) of the MSN Contract and replacing it with *.

2. NO OTHER MODIFICATIONS EXIST. Except as expressly amended by this Amendment 1, the Agreement is in all respects ratified, confirmed and approved and all the terms, provisions and conditions set forth in the Agreement, which are not specifically modified by this Amendment 1, will be and remain in full force and effect from the Effective Date of this Amendment 1 for the entire Term of the Agreement.

3. ENTIRE AGREEMENT. In the event of any conflict of terms between the Agreement and the Amendment 1, the terms of the Amendment I will govern.

4. COUNTERPARTS. This Amendment 1 may be executed in any number of counterparts, each of which when so executed by an authorized signatory of the Parties will be deemed an original, and all of which together, shall constitute one and the sonic agreement.

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment 1, effective as of the Effective Date.

CONFIDENTIAL TREATMENT REQUESTED

BRIGHTMAIL INCORPORATED		MICROSOFT CORPORATION
By:	/s/ Mike Irwin	By:	/s/ Steven Gerri
Name:	Mike Irwin	Name:	Steven Gerri
Title:	CFO	Title:	General Manager
Date:	April 23, 2004	Date:	April 21, 2004

-2-

EX-10.14

EXHIBIT 10.14

LICENSE AGREEMENT

between

HARRISON 160, LLC,

as Licensor,

and

BRIGHTMAIL INCORPORATED,

as Licensee

dated as of November 13, 2003

TABLE OF CONTENTS

		Page
1.	Grant of License	1
2.	Term	1
3.	Policies and Procedures, Access and Security	1
4.	Use; Hazardous Materials; Compliance with Laws; Inspection	1
5.	Alterations	3
6.	Commitment Levels	4
7.	Condition of License Area	6
8.	Fees, Billing and Payment	6
9.	Removal of Equipment	6
10.	Insurance; Indemnity	6
11.	Casualty and Condemnation	7
12.	Events of Default	8
13.	Remedies/Termination	8
14.	Assignment and Sublicensing	9
15.	Notice	9
16.	Additional Capacity; Right of First Refusal	9
17.	Option to Renew	10
18.	Force Majeure	10
19.	Governing Law	10
20.	Successors	10
21.	Severability	10
22.	Days	10
23.	Limitations on Liability	11
24.	Time of Essence	11
25.	Waivers	11
26.	Covenants and Conditions; Construction of Agreement	11
27.	Consents	11
28.	Reservations	11
29.	Authority	12
30.	Survival	12
31.	Amendment	12
32.	Subordination; Estoppel Certificates	12
33.	Attorneys’ Fees	12
34.	No Real Property Interest Conveyed; No Joint Venture	12
35.	Entire Agreement	12
Exhibit A -License Area		A-1
Exhibit B -Policies and Procedures		B-1

- i -

Basic License Terms

1 Parties

Data Center Operator: 365 The Main Exchange, Inc. 365 Main Street San Francisco, California 94105 Contact: Chris Dolan 415-764-1601	Licensee: Brightmail, Inc.
Licensor: Harrison 160, LLC	Address of Licensee: 301 Howard Street, Suite 1800 San Francisco, CA 94105
Address of Licensor: Union Property Capital, Inc. 353 Sacramento Street, Suite 560 San Francisco, California 94111 With a copy to: Chris Dolan 365 Main Street San Francisco, California 94105	Licensee Contact: Eric Stromberg
Licensor Contacts: Martin B. Dalton         415-989-8846 Chris Dolan                  415-764-1601 JP Balajadia                  415-359-4481	Guarantor:

2 License Term

Base Term:	1 years
Optional Term:	2 — 1 year options
Early Access Date:
Commencement Date:	14 business days from the date here of

3 License Area Requirements

Building Address:

365 Main Street

San Francisco, California 94105

Description	Units	Non-recurring charge/unit		Recurring charge/unit		Non-recurring charges		Recurring charges
License Area (collocation) Square Feet:	280	$	—	$	—	$	—	$
License Area (office) Square Feet:	0	$	—	$	—	$	—	$
Rack/Cabinet Quantity:	14	$	1,100.00	$	440.00		Free Promotion	$	6,160.00
Security Cage:	1	$	1,950.00	$	—		Free Promotion	$	—
Cable Management (MDF to Rack):	0	$	60.00	$	—		Free Promotion	$	—
		$			Subtotal:			$	6,160.00

4 Electrical Charges

Power Billing Option (select one): Lump Sum MRC Billing: Actual Usage MRC Billing: x

Description	Units	Non-recurring charge/unit		Recurring charge/ unit		Non-recurring charges		Recurring charges
20A, 120V	62	$	400.00		Billed on Actual	$	24,800.00		Billed on Actual
30A, 208V	4	$	450.00		Billed on Actual	$	1,800.00		Billed on Actual
Plug Strip	0	$	—	$	—	$	—	$	—
Rack/Cabinet Grounding	14	$	75.00	$	—	$	1,050.00	$	—
Circuit Level Monitoring	66		25.00	$	—		Free Promotion	$	—
					Subtotal:	$	27,650.00	$	—

5 Cross Connect Charges

Description	Units	Non-recurring charge/unit		Recurring charge/unit		Non-recurring charges		Recurring charges
POTS	1	$	—	$	50.00	$	—	$	50.00
Cat. 5/T-1	4	$	—	$	100.00	$	—	$	400.00
DS3	0	$	—	$	150.00	$	—	$	—
OC - x (Fiber)	0	$	—	$	200.00	$	—	$	—
Custom	0	$	—	$	—	$	—	$	—
					Subtotal:	$	—	$	450.00

-1-

6 Additional Products and Feature Charges

Description	Units	Non-recurring charge/unit		Recurring charge/unit		Non-recurring charges		Recurring charges
IP Bandwidth	0	$	—	$	—	$	—	$	—
Bursting (Billed on 95th %, 20% prem.)	0	$	—	$	—	$	—	$	—
Riser Access	0	$	—	$	—	$	—	$	—
Storage	0	$	—	$	—	$	—	$	—
Roof Equipment	0	$	—	$	—	$	—	$	—
Security Card Reader (licensee cage)	0	$	—	$	—	$	—	$	—
Security Camera (licensee cage)	0	$	—	$	—	$	—	$	—
					Subtotal:	$	—	$	—

7 Grand Total

Description	Units	Non-recurring charge/unit	Recurring charge/unit	Non-recurring charges			Recurring charges
Total extension of all Charges:				$	27,650.00		$	6,610.00
Promotional Discount: (1-Months Free Rent plus the above already discounted NRC				$	(6,610.00	)
Security Deposit:				$	6,610.00
Subtotal:				$	27,650.00		$	6,610.00
TOTAL AMOUNT DUE AT INCEPTION (Includes NRC, Security Deposit and One Month License frees):							$	34,260.00

8 Permitted Use

9 Commitment Levels

a. Electrical Power: Licensor shall provide electricity to the License Area without interruption, provided that Licensor’s liability for any failure to do so shall be limited to Licensee’s remedies set forth below in this Section 9(a) of these Basic License Terms and in Section 13.4 of this Agreement (pursuant to which Licensee has the right to terminate this Agreement within sixty (60) days of any failure of Licensor to provide the Basic Capacity or the Additional Capacity as required under this Agreement). In the event of any power outage for reasons other than Licensee actions or omissions, Licensee shall be entitled to an abatement of one day’s License Fee for each hour that delivery of electricity to the License Area is disrupted during any twenty-four (24) hour period, provided in no event shall the License Fees be abated for a period longer than thirty (30) days. Except as otherwise expressly provided in the previous sentence, Licensor shall not in any way be liable or responsible to Licensee for any loss, damage or expense which Licensee may sustain or incur as a result of the unavailability of or interruption in the supply of electric current to the License Area or a change in the quantity or character or nature of such current and such unavailability shall not constitute an actual or constructive eviction, in whole or in part, or entitle Licensee to any abatement or diminution of or relieve Licensee from any of its obligations under this License Agreement, or impose any liability upon Licensor or its agents, by reason of inconvenience or annoyance to or interruption of Licensee’s business, or otherwise. This Section 9(a) of these Basic License Terms shall not limit Licensee’s right to terminate this Agreement pursuant to Section 13.4 of this Agreement in connection with any failure by Licensor to provide Basic Capacity or Additional Capacity as required under this Agreement, provided, however, that Licensee shall not be entitled to any abatement of License Fees in connection with any such termination.

b. Environmental Control: Licensor shall maintain conditions in the License Area as follows: (i) the relative humidity shall be maintained between 47.5% ambient and 52.5% ambient, and (ii) the temperature shall not exceed 78° Fahrenheit ambient. In the event that Licensor shall fail to maintain conditions as described above, Licensor shall make the necessary adjustments to obtain the conditions set forth herein within one (1) hour of receiving notice of such failure to maintain such conditions, but, except as specifically stated in these Commitment Levels, shall not in any way be liable or responsible to Licensee for any loss, damage or expense which Licensee may sustain or incur as a result of Licensor’s failure to maintain such conditions if the cause of such failure was not within Licensor’s reasonable control.

In the event that Licensor shall have failed to maintain conditions in the License Area as described in this Section 9(b) of these Basic License Terms more than twice in any ninety (90) day period, Licensee shall have the right to terminate this Agreement in accordance with Section 13.4 hereof.

c. Work Order Request: Subject to any other provisions of this Agreement which may limit or impair the availability of the following items or place conditions on the availability of such items, Licensor shall implement Licensee’s requests for the following work order items within the time periods designated below following fully executed work order:

Type of Work Order	Time Period
Increase Electrical Capacity	Qty: 1-10 - Five (5) days
(20 amp - 120V circuit)	Qty: 11-20 - Ten (10) days
	Qty: 21 + - agreed upon work order
Install Cross connects	24 Hours from approved work order
Security Access Badges	Three (3) days

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Licensee shall submit a work order for any such requested change in accordance with the provisions of this Agreement and the Policies and Procedures. If Licensor determines in its reasonable commercial judgment that Licensor has failed lo meet the work order commitment, Licensee shall receive a credit equal to 50% of Licensor’s standard charge for the service with respect to which this commitment has not been met. In the event that Licensor shall have failed l o act upon a work order request within the applicable time period set forth above more than twice in any ninety (90) day period, Licensee shall have the right lo terminate this Agreement in accordance with Section 13.4 hereof.

d. Preparation of License Area: Licensor shall use commercially reasonable efforts to make the License Area available to Licensee in the condition required under this Agreement and these Basic License Terms on or prior to the commencement of the Term as described in Section 2 of this Agreement. In the event Licensor fails to do so, Licensee shall be entitled to an abatement of one day’s License Fee for each day of Licensor’s delay in making the License Area available to Licensee, up to a maximum of thirty (30) days; provided, however, that this provision with respect to preparation of the License Area shall not apply if (i) Licensee has given Licensor incorrect or incomplete information with respect to the configuration of the License Area, which incorrect or incomplete information is the primary reason for Licensor’s delay in preparing the License Area, (ii) Licensee has altered or modified the requested configuration of the License Area after submission of such information to Licensor and acceptance thereby, and such alteration or modification is the primary reason for Licensor’s delay in preparing the License Area, or (iii) Licensee has requested that Licensor configure the License Area in accordance with specification Building. This Section 9(d) of these Basic License Terms shall not limit Licensee’s right to terminate this Agreement pursuant to Section 13.4 of this Agreement; provided, however, that Licensee shall not be entitled to any abatement of Licensee Fees in connection with any such termination.

e. Remote Hands: Licensor or its independent contractor shall respond to a request for “Remote Hands” as described in the table below. Licensor’s or its independent contractor’s response time in connection with such a request shall be measured from the time Licensor or its independent contractor receives and logs Licensee’s request with all necessary information requested by Licensor or its independent contractor until a representative of Licensor or its independent contractor first calls Licensee in response to such request. In the event Licensor or its independent contractor fails to satisfy the Remote Hands commitment, Licensee shall be entitled to an abatement of one day’s License Fee for each failed occurrence. In the event that Licensor shall have failed to comply with the applicable response times set forth below more than twice in any ninety (90) day period, Licensee shall have the right to terminate this Agreement in accordance with Section 13.4 hereof.

Response Table (Schedule 1

Severity	Alarm Description	Meaning	Generic Response	NOC “Target” Response Time	Field Staff “Target” Response Time
1	Critical	Site Down	Immediate	15 minutes	15 minutes
2	Major	Degrading Performance	ASAP	30 minutes	15 minutes
3	Minor	Required Maintenance	Normal	Next Business Day	As advised by NOC

f. Any abatement of License Fess or other credit permitted pursuant to these Basic License Terms shall be subject to the following conditions:

1) The failure of Licensor to satisfy the applicable commitment level shall not have been caused in whole or in part by any scheduled maintenance events, unavoidable delay, Licensee actions or inactions, Licensee-supplied power or equipment, actions or inactions of any third party excluding any third party directly involved in the operation and maintenance of the Building or any of Licensor’s agents, representatives or contractors, but including, without limitation, Licensee’s end users, third party network providers, traffic exchange points controlled by third parties, any power, equipment or services provided by third parties, or an event of force majeure.

2) Licensee must notify Licensor within thirty (30) days from the time Licensee becomes eligible to receive an abatement of License Fees or any other credit pursuant to these Basic License Terms. Licensee shall forfeit any right to receive such an abatement of License Fees or other credit if Licensee fails to timely notify Licensor. In addition, Licensee shall not be entitled to abatement of any License Fees if Licensee elects to terminate this Agreement pursuant to Section 13.4.

3) If Licensee is entitled to multiple credits or abatement of License Fees for multiple reasons under these Basic License Terms, such credits or abatement of License Fees shall be limited to a maximum of thirty (30) days’ License Fees.

4) In no event shall Licensee be entitled to a credit or abatement of License Fees if Licensee is in default under this Agreement and has received from Licensor a notice of such default or has otherwise failed to materially comply with the Policies and Procedures.

These Basic License Terms shall not be binding upon Licensor and Licensee until such time as the parties have agreed to and executed a License Agreement into which this summary of Basic License Terms shall be incorporated.

LICENSOR: Harrison 160, LLC a California Liability Company		LICENSEE:
By:	/s/ Illegible	By:	/s/ Mike Irwin
Print Name: Illegible		Print Name: Mike Irwin
Date Signed: 11/17/03		Date Signed: 14 Nov 2003

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License Terms and Conditions

These License Terms and Conditions together with any schedules and exhibits attached hereto and the immediately preceding summary of Basic License Terms (the “Basic License Terms”) when taken together comprise the “License Agreement” or “Agreement” between 160 Harrison, LLC, a California limited liability company (“Licensor”), and the licensee identified in the Basic License Terms (the “Licensee”).

1. Grant of License.

Licensor hereby grants Licensee the right during the Term of this Agreement to install, maintain and operate certain telecommunications and computing equipment as determined by Licensee in its sole discretion (the “Equipment”) within the space designated on Exhibit A attached hereto (the “License Area”) within the building commonly known as 365 Main Street, San Francisco, California 94105 (the “Building”). Licensor shall not be obligated to provide any telecommunications services or managed services to Licensee under this Agreement. Licensee acknowledges and agrees that any services to be provided by Licensor hereunder in connection with the Equipment or the License Area may be performed by an independent contractor or contractors on behalf of Licensor so long as such services are performed in accordance with the terms and conditions of this Agreement and Licensor is not released from its obligations hereunder with respect to such services.

2. Term.

The term of this Agreement shall be the term shown on the Basic License Terms (the “Term”), unless this Agreement is sooner terminated in accordance with Section 13.1 below, and shall commence on or before the date that is fourteen (14) business days after the later of (i) the execution of this Agreement by each of the parties hereto, and (ii) Licensor’s receipt of plans and specifications reasonably acceptable to Licensor for the work described on Exhibit A. Within ten (10) days after written request from Licensor, Licensee shall execute and return to Licensor an acknowledgment of the commencement date of the term of this Agreement.

3. Policies and Procedures, Access and Security

The Policies and Procedures of the Building in effect as of the date hereof are attached hereto as Exhibit B (the “Policies and Procedures”). Licensor reserves the right, from time to time, to adopt additional Policies and Procedures and to amend the Policies and Procedures then in effect. Licensee and Licensee’s Representatives (as defined in Section 4.1 (c) below) shall comply in all material respects with the Policies and Procedures, as so supplemented or amended. Notwithstanding the foregoing, if any such supplement or amendment of the Policies and Procedures materially adversely affects the operations of Licensee and Licensee provides to Licensor within thirty (30) days of Licensee’s receipt of such supplement or amendment a detailed written description of Licensee’s objections and the basis therefor together with an explanation of the material adverse impact on Licensee’s operations, the parties hereto shall negotiate such supplement or amendment in good faith, and the portion of the supplement or amendment to which Licensee timely objected shall not be applicable to Licensee until such time as Licensee and Licensor shall have mutually agreed on its applicability to Licensee. Nothing contained in this Agreement shall be construed to impose upon Licensor any duty or obligation to enforce the Policies and Procedures or terms, covenants or conditions in any other lease or license against any other lessee or licensee, and Licensor shall not be liable to Licensee for violation of the same by any other lessee or licensee, its employees, agents, visitors or licensees. If there shall be any inconsistencies between this Agreement and the Policies and by the Policies and Procedures, .the provisions of this Agreement shall prevail. Access to the Building and the License Area is governed by the Policies and Procedures.

4. Use; Hazardous Materials; Compliance with Laws; Inspection.

4.1 Use.

(a) Licensee shall use and occupy the License Area only for the use set forth in the Basic License Terms, and for no other purpose. Licensee shall not use or keep in the License Area any Hazardous Materials other than those specifically approved by Licensor in writing and permitted to be used under local governing code and ordinances in the operation of Licensee’s business that are used and stored in compliance with Legal Requirements (as defined in Section 4.2(a) below). As used herein, the term “Hazardous Materials” means and includes any flammable, explosive, or radioactive materials or hazardous, toxic or dangerous wastes, substances or related materials or any other

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chemicals, materials or substances, exposure to which is prohibited, limited or regulated by any federal, state, county, regional or local authority or which, even if not so regulated, may or could pose a hazard to the health and safety of occupants of the Building or Of property adjacent to the Building, including, but not limited to, asbestos, PCBs, petroleum products and by-products, substances defined or listed as “hazardous substances” or “toxic substances” or similarly identified in, pursuant to, or for purposes of, the California Solid Waste Management, Resource Recovery and Recycling Act (California Government Code Section 66700 et seq.), the Comprehensive Environmental Response, Compensation, and Liability Act, as amended (42 U.S.C. Section 9601, et seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section 1801, et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 6901, et Seq.), Section 25117 or Section 25316 of the California Health & Safety Code; and any so-called “Superfund” or “Superlien” law, or any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to or imposing liability or standards of conduct concerning any hazardous, toxic or dangerous waste, substance or material; or any substances or mixture regulated under the Toxic Substance Control Act of 1976, as now or hereafter amended (15 U.S.C. Section 2601 et seq.); and any “toxic pollutant” under the Clean Water Act, as now or hereafter amended (33 U.S.C. Section 1251 et seq.); and any hazardous air pollutant under the Clean Air Act, as now or hereafter amended (42 U.S.C. Section 7901 et seq.), provided, however, that Licensee may engage in the safe and lawful use and storage of quantities of office supplies including copier toner, cleaning supplies and other such substances customarily used in offices or colocation spaces. Licensee’s violation of this Section 4.1 (a) will be grounds for termination of this Agreement by Licensor in Licensor’s sole and absolute discretion if Licensee has not cured such violation within five (5) business days after receipt by Licensee of Licensor’s written notice of such violation.

(b) Licensee shall not place a load upon any area of the License Area, which load either exceeds the floor load per square foot that such area is designed to carry or violates Legal Requirements. Pursuant to Building specifications, the designated loads per square foot are: (i) two thousand (2000) pounds with respect to any raised floor, and (ii) two hundred fifty (250) pounds with respect to areas other than a raised floor.

(c) Licensee’s Indemnification. Licensee agrees to indemnify, defend and hold harmless Licensor, its successors and assigns, and its and their trustees, beneficiaries, directors, officers, shareholders, members, managers, employees, agents, and partners from all costs, expenses, damages, liabilities, claims, fines, penalties, interest, judgments, and losses of any kind, including, without limitation, reasonable attorneys’ fees and costs, arising from or in any way related to Licensee’s or Licensee’s officers, employees, contractors, representatives, affiliates, assignees, sublicensees, agents, invitees, and any trespassers on the License Area (collectively, “Licensee’s Representatives”) handling of Hazardous Materials during the Term or violation of any of the provisions of this Agreement pertaining to Hazardous Materials (collectively, “Environmental Losses”), including consequential damages, damages for personal or bodily injury, property damage, damage to natural resources occurring on or off the License Area, encumbrances, liens, costs and expenses of investigations, monitoring, clean up, removal or remediation of Hazardous Materials, defense costs of any claims (whether or not such claim is ultimately defeated), good faith settlements, reasonable attorneys’ fees and costs, and losses attributable to the diminution of value, loss or use or adverse effects on marketability or use of any portion of the License Area, whether or not such Environmental Losses are contingent or otherwise, matured or unmatured, foreseeable or unforeseeable. The foregoing indemnity shall not apply to (i) conditions caused by Hazardous Materials existing in, on or under the Building prior to the term of this Agreement, or (ii) conditions caused by the migration of Hazardous Materials discharged by parties other than Licensee or Licensee’s Representatives onto or under the Building or Licensed Area.

(d) Licensor’s Representation and Warranty. licensor hereby represents and warrants to Licensee that, to Licensor’s knowledge, Licensor has received no written notice from any Governmental Authority of any violation of Legal Requirements with respect to Hazardous Materials.

4.2 Licensee’s Compliance with Legal Requirements.

(a) Definitions.

“Legal Requirements” means all present and future laws, rules, orders, ordinances, regulations, statutes, requirements, codes, executive orders, rules of common law, and any judicial interpretations thereof, extraordinary as well as ordinary, of all Governmental Authorities, including, without limitation, the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. §9601 et seq. and the Resource Conservation and Recovery Act, 42 U.S.C. §9601 et seq., the Americans with Disabilities Act, 42 U.S.C. 912,101 et seq., and any law of like import, any statute, rule or regulation designating any substance as a hazardous material or substance, and all rules, regulations and government orders with respect thereto, and of any applicable fire rating bureau, or other body exercising similar functions, affecting Licensee’s use of the License Area, the Building or the maintenance, use or occupation

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thereof, or any street or sidewalk comprising a part of or in front thereof or any vault in or under the Building. “Governmental Authority” means any of the United States of America, the State of California, the City and County of San Francisco, any political subdivision thereof and any agency, department, commission, board, bureau or instrumentality of any of the foregoing, now existing or hereafter created, having jurisdiction over the Building or any portion thereof or the vaults, curbs, sidewalks, streets and areas adjacent thereto.

(b) Compliance with Legal Requirements. Licensee, at its sole expense, shall comply with all Legal Requirements applicable to the License Area or the use and occupancy thereof by Licensee. Licensee shall not do or permit to be done any act or thing upon the License Area which will invalidate or be in conflict with Licensor’s insurance policies. If, as a result of Licensee’s acts or omissions, the insurance rates for the Building shall be increased, then Licensee shall reimburse Licensor for the amount of any such increase upon demand by Licensor.

(c) City and County of San Francisco. Licensee shall have the sole responsibility to secure any and all governmental approvals relating to Licensee’s use of the License Area. Licensee shall secure such approvals prior to execution of this Agreement and hold Licensor harmless from any costs and fees incurred in the process, and from any fines or penalties imposed by any Governmental Authority arising from Licensee’s non-conformance with Legal Requirements.

4.3 Access and Inspection. Licensor and Licensor’s lender and consultants, and each of their respective officers, agents, employees, members or managers, shall have the right, but not the obligation, to enter into the License Area at any time, in the case of an emergency, and otherwise at reasonable times to inspect the License Area. In addition, licensor or Licensor’s agents may have access to the License Area at reasonable times for the purpose of showing the same to prospective purchasers, lenders, or licensees, and making such alterations, repairs, improvements or additions to the License Area as Licensor may deem necessary, provided that Licensee’s access to the License Area shall not be unreasonably impeded thereby, and provided further that the operations of Licensee shall not be unreasonably disturbed and all such work shall be completed as promptly as reasonably practicable. Licensor shall use commercially reasonable efforts to minimize any disruption of Licensee’s operations and use of the License Area during any access of the License Area by Licensor permitted hereunder. All such activities shall be without abatement of License Fees or liability to Licensee.

5. Alterations.

5.1 The term “Alterations” shall mean any modification of the License Area other than modifications described in Section 16 and on Exhibit A and the installation in the License Area of Licensee’s Equipment, together with customary cabling and trades fixtures to be installed in connection therewith, made by Licensee after the commencement of the Term, whether by addition or deletion. Licensor acknowledges that Licensor has approved the installation of Licensee’s Equipment and the modifications described in Section 16 and on Exhibit A, including customary cabling and trades fixtures to be installed in connection therewith, and that the initial installation of the foregoing shall not be subject to the requirements of this Section 5.

5.2 Licensor and Licensee acknowledge that the parties anticipate that Alterations will be made or constructed by Licensor upon the request of Licensee at Licensee’s sole cost and expense. In the event that Licensee desires to make or construct Alterations itself rather than requesting Licensor to do so, Licensee shall not make any Alterations to the License Area without Licensor’s prior written consent, which may be given or withheld in Licensor’s sole and absolute discretion; provided, however, that Licensor shall not unreasonably withhold its consent to the installation in the License Area by Licensee of customary cabling and trade fixtures. Any proposed Alterations itself that Licensee shall desire to make shall be presented to Licensor in written form with detailed plans. Any proposed Alterations being made or constructed by Licensee shall be bonded in the amount of one hundred fifty percent (150%) of the estimated costs, shall be undertaken at Licensee’s sole cost and expense and risk, shall be made in a safe and workmanlike manner, shall not cause or result in any mechanics or labor and materials liens for the work to be levied on the License Area and shall be subject to Licensor’s customary conditions of construction, as set forth in Licensor’s form of Consent to Alterations.

5.3 Indemnification. Licensee shall keep the License Area free from any liens and shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Licensee at or for use on or in the License Area. Licensee shall give Licensor not less than ten (10) days’ notice prior to the commencement of any work in, on or about the License Area, and Licensor shall have the right to post notices of non-responsibility in connection with such work. If Licensee shall contest the validity of any such lien claim or demand, then Licensee shall, at its sole expense defend and protect itself, Licensor and the License Area against the same, shall post adequate security in connection

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therewith and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof.

6. Commitment Levels.

Licensor shall use commercially reasonable efforts to provide or cause an independent contractor to provide on behalf of Licensor, at Licensor’s expense, except as otherwise set forth herein, the following, in accordance with the commitment levels described in the Basic License Terms, as applicable.

6.1 Electricity. Licensee has elected to be charged for electricity service on an actual usage basis (as described in Section 6.l(a) below). Licensor, subject to the provisions of this Section 6.1, shall make available to Licensee, AC electric capacity at a level not less than the level described in the Basic License Terms (the “Basic Capacity”). Except as otherwise provided in Exhibit A, Licensee shall be solely responsible, at Licensee’s sole cost and expense, for the installation of all power circuits and rack grounding to the base Building grounding grid system required in order to deliver the initial Basic Capacity to the License Area and to distribute it therein. Licensee shall use Licensor’s designated electrical contractor to perform the tap-in to the Building’s electrical system located at the remote power panel. In the event that Licensee shall require electrical capacity in excess of the Basic Capacity, then upon request, and subject to the availability of additional electrical capacity in the Building, as determined by Licensor in its sole and absolute discretion, Licensor shall make additional electric power available to Licensee; provided, however, that Licensor shall be obligated to supply to Licensee the Basic Capacity as set forth in the Basic License Terms and Exhibit A, and, if requested by Licensee, the Additional Capacity, as set forth and defined in Section 16, all on the terms and conditions of this Agreement. Licensee shall pay to Licensor a one-time charge equal to Licensor’s designated electrical contractor’s expense to install such electrical facilities and equipment necessary to enable Licensee to obtain such additional electrical capacity. Licensor’s current rate for additional power as of the date of this Agreement is set forth in the Basic License Terms, subject to increase during the term due to increases in Licensor’s costs and the charges of the Electricity Provider (as defined below). Licensee shall pay Licensor, as additional License Fees, on a monthly basis, for its consumption of electrical energy at the License Area, as provided herein. “Licensor’s Electricity Cost” means the cost per kilowatt hour and cost per kilowatt demand as charged by the applicable public utility, adjusted by applicable rate adjustments of the applicable public utility, to Licensor for the purchase of electricity from the public utility or other electricity provider furnishing electricity service to the Building from time to time (the “Electricity Provider”), including sales and other taxes or other impositions imposed by any Governmental Authority on Licensor’s purchase of electricity. If at any time during the term the cost elements comprising Licensor’s Electricity Cost shall be increased by the Electricity Provider, or Licensor’s Electricity Cost shall be increased for any other reason, then effective as of the date of such increase, Licensee’s payment for submetered electricity under this Section 6.1 shall be proportionately increased. Licensor reserves the right to contract with different Electricity Providers from time to time in its sole discretion, and without reference to whether any Electricity Provider selected by Licensor provides lower rates than any other electricity supplier. Licensee covenants that Licensee’s use and consumption of electric current shall not at any time exceed the capacity of any of the electrical facilities and installations in or otherwise serving or being used in the License Area and Licensee shall, upon the submission by Licensor to Licensee of written notice, promptly cease the use of any of Licensee’s electrical equipment which Licensor believes will cause Licensee to exceed such capacity. If, within twenty-four (24) hours of receiving such a notice from Licensor, Licensee shall fail to reduce its use and consumption to a level that complies with the terms of this Section 6.1, Licensor shall have the right to disconnect power to the applicable circuit. Any additional feeders, risers, electrical facilities and other such installations required for electric service to the License Area (other than those feeders, risers, electrical facilities and other such installations relating to the Additional Capacity (as defined in Section 16) and the initial installation of the Equipment) will be supplied by Licensor, at Licensee’s expense, upon Licensor’s prior consent in each instance, provided that, in licensor’s judgment, such additional electrical facilities and installations, feeders or risers are necessary for Licensee’s use of the License Area and are permissible under Legal Requirements and insurance regulations, and provided further that the installation of such feeders or risers will not cause permanent damage or injury to the Building or the License Area or cause or create a dangerous or hazardous condition or entail excessive or unreasonable alterations or repairs or interfere with, or disturb, other licensee or occupants of the Building. In addition, subject to Section 16 below, Licensor shall have no obligation to consent to such additional feeders, risers, electrical facilities and installations if in Licensor’s judgment, the same would give Licensee a disproportionate amount of the electrical current supplied to the Building in derogation of the needs of other licensees or occupants of the Building.

The calculations and determinations of the charges for electric energy consumed by Licensee shall be based on the readings of one or more submeters to be installed by Licensor, applied to Licensor’s Electricity Cost, as defined below. The cost for installation of such submeters shall be borne by Licensor. Licensee shall pay Licensor’s Electricity Cost for electricity consumed as determined thereunder as measured and calculated from time to time by such submeter or

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submeters. In addition, Licensee shall pay to Licensor, as additional License Fees the amount of any taxes or other impositions imposed by any Governmental Authority on Licensor’s receipts from the sale of electricity to Licensee (other than those based on Licensor’s income).

6.2 Environmental Controls. Licensor shall use commercially reasonable efforts to provide heating, ventilation and air conditioning (“HVAC”) to the License Area twenty-four (24) hours a day, seven (7) days a week, three hundred sixty-five (365) days a year, through use of the Building standard heating system.

6.3 Security. Licensor, or an independent contractor on behalf of Licensor, shall provide security services for the Building twenty-four (24) hours a day, seven (7) days a week. Such security services shall be consistent with those provided at buildings comparable to the Building, including, without limitation, monitoring alarm and surveillance systems, responding to emergencies, escorting visitors, safekeeping licensee cage keys, and monitoring and controlling access to the Building. Licensee shall provide to Licensor the names of Licensee’s Representatives who are authorized to access the Building and the License Area in accordance with the Policies and Procedures attached hereto as Exhibit B. Notwithstanding the foregoing, Licensee acknowledges and agrees that neither Licensor’s agreement to provide such security services nor Licensor’s actual provision of the same pursuant to this Agreement shall directly or indirectly create any liability (and Licensee hereby waives any claim based on any such liability) on the part of Licensor to Licensee, any persons occupying or visiting the License Area or the Building, or any other person or entity with respect to any loss by theft, injury or loss of life, or any other damage suffered or incurred in connection with any entry into the License Area or any other breach of security with respect to the License Area or the Building; provided, however, that the foregoing acknowledgment and agreement shall not apply to any such loss or damage that results from Licensor’s failure to use commercially reasonable efforts to comply with its obligations under this subparagraph or from Licensor’s willful misconduct.

6.4 Fire Detection and Suppression. Licensor shall maintain a very early smoke detection system and a double interlock pre-action and detection system in the Building. In addition, Licensor shall provide and maintain fire extinguishers in the Building, including clean agent extinguishers for use in “mission critical” portions of the Building, as determined by Licensor. Licensee shall review and approve the smoke detection and tire suppression systems prior to commencement of the Term.

6.5 Remote Hands. Licensor, or an independent contractor on behalf of Licensor, shall provide personnel capable of performing certain limited maintenance services in accordance with the Licensee’s written directions (“Remote Hands”) on equipment belonging to Licensee installed in the License Area. Remote Hands shall be available twenty-four (24) hours a day, seven (7) days a week. Licensee shall access and utilize Remote Hands in accordance with the Policies and Procedures. Notwithstanding anything to the contrary contained herein, in no event shall Licensor be responsible for the repair, configuration, tuning or installation of the Equipment or the License Area or any damage or loss caused by Remote Hands, except to the extent resulting from Licensor’s negligence or willful misconduct.

6.6 Changes in Configuration. Licensor, or an independent contractor on behalf of Licensor, shall implement Licensee requests for changes in electrical capacity (to the extent additional capacity is available and in accordance with Section 6.1 above), installation of cross connects and any other modifications to Licensee’s License Area that Licensor is required by this Agreement to provide to Licensee upon Licensee’s request, in accordance with the applicable commitment level set forth in the Basic License Terms.

6.7 Elevators. Licensor, or an independent contractor on behalf of Licensor, shall use commercially reasonable efforts to provide passenger elevator service to the License Area twenty-four (24) hours a day, seven (7) days a week, three hundred sixty-five (365) days a year. Such elevator service shall be subject to such rules and regulations as Licensor may promulgate from time to time with respect thereto.

6.8 Cleaning and Rubbish Removal. Licensor, or an independent contactor on behalf of Licensor, shall provide janitorial service consistent with a telecommunications building similar to the Building. Building trash containers are provided for office generated trash only and shall not be used by Licensee for disposal of construction- related materials, equipment or other bulky debris. Licensee shall, at Licensee’s sole cost, provide refuse and rubbish removal service at the License Area at times, and pursuant to regulations established by Licensor from time to time.

6.9 Water. Licensor shall furnish water in such quantities as Licensor deems sufficient for ordinary drinking, lavatory and cleaning purposes in the License Area.

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7. Condition of License Area.

Licensee understands that the License Area and related services are provided on an “AS-IS” basis, and Licensor makes no warranty that the space or such services are suitable for Licensee’s intended purpose. Licensee acknowledges that: (a) Licensee has made such investigations as it deems necessary with reference to such matters and assumes all responsibility therefor as the same relate to its use of the License Area, and, (b) neither Licensor, Licensor’s agents, nor any broker has made any oral or written representations or warranties with respect to said matters other than as set forth in this Agreement. Installation of any Equipment by Licensee shall be deemed conclusive evidence that Licensee accepts the same “as-is” and agrees that Licensor is under no obligation to perform any work or provide any materials to prepare the License Area or the Building for Licensee except as set forth on Exhibit A. WITHOUT LIMITING THE FOREGOING, LICENSOR MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN FACT OR BY OPERATION OF LAW, STATUTORY OR OTHERWISE, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, EXCEPT THOSE EXPRESSLY STATED HEREIN.

8. Fees, Billing and Payment.

Licensee agrees to pay all fees detailed in the Basic License Terms and any additional fees described in this Agreement (“License Fees”) when due. Upon execution of this Agreement, Licensee will pay all amounts designated in the Basic License Terms as being payable upon the execution of this Agreement. Thereafter, ongoing License Fees will be billed monthly starting on the date any Equipment is placed in the License Area. Payment will be due ten (10) business days from Licensee’s receipt of Licensor’s invoice, provided that such invoice shall be deemed to have been delivered when deposited by Licensor, postage prepaid, in the U.S. mail. Notwithstanding anything to the contrary contained in this Section 8 or the Basic License Terms, no License Fees shall be payable by Licensee if Licensee terminates this Agreement in accordance with the provisions of Section 13.4(b).

9. Removal of Equipment.

Licensee agrees not to remove any Equipment from the License Area except Equipment owned by Licensee without the prior written consent of Licensor. Any such removal must be undertaken in full compliance with the Policies and Procedures. Before authorizing any removal, Licensor will verify that all License Fees and other amounts due and payable under this Agreement have been paid by Licensee. Upon the expiration or earlier termination of this Agreement, Licensee shall remove all Equipment from the License Area and from the Building in accordance with the Policies and Procedures. If Licensee fails to do so, Licensor may treat the Equipment as abandoned and charge Licensee for the removal and/or storage costs. Licensor has no duty to preserve or care for any Equipment abandoned or deemed abandoned hereunder, and Licensee hereby waives and releases any claims it may have in connection with any such removal or storage.

10. Insurance; Indemnity.

10.1 Insurance. At all times during the Term of this Agreement, Licensee shall maintain and pay for (a) commercial general liability insurance in an amount not less than $2,000,000 per occurrence, (b) workers’ compensation insurance in an amount not less than that prescribed by applicable law, (c) employer’s liability insurance in an amount not less than $2,000,000 per occurrence, (d) commercial automobile liability insurance applicable to bodily injury and property damages, covering owned, non-owned, leased and other hired vehicles in an amount not less than $1,000,000 per accident, (e) insurance coverage on all of Licensee’s Equipment and property in the License Area with full replacement cost coverage and a deductible not to exceed $1 00,000 per occurrence, and (f) umbrella or excess liability insurance with a combined single limit of not less than $2,000,000 to apply over the above mentioned policies. Such commercial general liability insurance and umbrella or excess liability insurance shall name Licensor as an additional insured. In addition, all insurance required under this Section 10.1 shall (i) be non-cancelable except upon ten (10) days’ prior written notice to Licensor, (ii) be issued by an insurer with an AM Best’s Rating of B+ or better and (iii) be primary in nature. Licensee shall provide Licensor with certificates evidencing the required coverages prior to bringing any Equipment into the Building. If Licensee fails to maintain the required coverages, Licensor may, but shall not be obligated to, purchase such coverage for Licensee, at Licensee’s cost. Licensee shall insure that all of its subcontractors and agents maintain insurance in the amounts required in this Section 10.1.

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10.2 Indemnity.

(a) Except for any matter resulting from Licensor’s negligence or willful misconduct, Licensee shall indemnify, protect, defend and hold harmless Licensor and its agents, partners and Lenders (as defined in Section 30 below), from and against any and all claims, loss of rents and/or damages, liens, judgments, penalties, reasonable attorneys’ and consultants’ fees, expenses and/or liabilities arising out of, involving, or in connection with, the use and/or occupancy of the License Area by Licensee. If any action or proceeding is brought against Licensor by reason of any of the foregoing matters, Licensee shall upon notice defend the same at Licensee’s expense by counsel reasonably satisfactory to Licensor and Licensor shall cooperate with Licensee in such defense. Licensor need not have first paid any such claim in order to be defended or indemnified. Subject to Licensor’s reasonable approval of counsel and the restrictions on settlement contained below, Licensee will have the sole right to conduct and control the defense of any claim or action covered by Licensee’s indemnification obligations under this Section 10.2 and all negotiations for the settlement or compromise thereof, provided that Licensor may, in its sole discretion, participate in the defense of any such claim or action at Licensor’s expense. Notwithstanding anything to the contrary contained in the foregoing sentence, if the named parties to any proceeding subject to the indemnity provisions hereof include both Licensor and Licensee and Licensor or Licensee shall have been advised by its counsel that representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them, Licensor will have the right to engage its own counsel in connection with the defense of any such claim or action at Licensee’s expense. Licensee may not, without Licensor’s prior written consent, settle, compromise or consent to the entry of any judgment in any such commenced or threatened claim or action, unless such settlement, compromise or consent: (i) includes an unconditional release of Licensor from all liability arising out of such commenced or threatened claim or action; and (ii) is solely monetary in nature and does not include a statement as to, or an admission of fault, culpability or failure to act by or on behalf of, Licensor or otherwise adversely affect Licensor. If Licensee fails to appoint an attorney within ten (10) business days after Licensor has notified Licensee of any claim or action, Licensor will have the right to select and appoint an attorney to handle such claim or action and the reasonable cost and expense thereof will be paid by Licensee until such time that Licensee has appointed an attorney and such attorney has assumed the defense of such claim on behalf of Licensor.

(b) Licensor shall have no liability or responsibility for the content of any communications transmitted via third party services, and Licensee shall defend, indemnify and hold Licensor harmless from any and all claims (including claims by any Governmental Authority seeking to impose penal sanctions) related to such content or for claims by third parties relating to Licensee’s use of the License Area. Licensor does not operate or control the information, services, opinions or other content of third party services that may utilize equipment in the Building or provide services therein. Licensee agrees that it shall make no claim whatsoever against Licensor relating to the content of any such services or respecting any information, product, service or software ordered through or provided by virtue of such third party services.

10.3 Exemption of Licensor from Liability. Licensor shall not be liable for injury or damage to the person or goods, wares, merchandise or other property of Licensee, Licensee’s employees, contractors, invitees, customers, or any other person in or about the License Area, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction or other defects of pipes, tire sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from any other cause, whether such injury or damage results from conditions arising upon the License Area, or from other sources or places, other than damages proximately caused by reason of Licensor’s willful acts or omissions or gross negligence and not covered by insurance required to be carried by Licensee under this Agreement. Licensor shall not be liable for any damages arising from any act or neglect of any other licensee of Licensor. Notwithstanding any other provision of this Agreement, Licensor shall not be liable to Licensee for any indirect, special, consequential, exemplary or punitive damages (including but not limited to damages for lost profits, lost revenues or the cost of purchasing replacement services) arising out the performance or failure to perform Licensor’s obligations under this Agreement.

11. Casualty and Condemnation.

In the event of material damage to, destruction of or condemnation of the Building or the License Area, Licensor shall have the right, in Licensor’s sole discretion, to terminate this Agreement upon notice to Licensee, and upon delivery of such notice neither Licensor nor Licensee shall have any further obligations to the other party under this Agreement, except those obligations that expressly survive the termination of this Agreement.

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12. Events of Default.

Each of the following shall be an “Event of Default” under this Agreement: (a) Licensee’s breach of any provision of this Agreement or any agreement referred to herein, including without limitation, violation of the Policies and Procedures, if not cured within fifteen (15) business days after receipt of written notice of such breach, provided that if such breach is not a monetary default and cannot reasonably be cured within such fifteen (15) business day period, so long as Licensee has commenced curing such breach and continues to diligently prosecute such cure to completion, such fifteen (15) business day cure period may be extended by Licensor in its sole and absolute discretion, (b) the failure of Licensee to make any payment of License Fees or any other monetary payment required to be made by Licensee hereunder, whether to Licensor or to a third party, when due, to provide reasonable evidence of insurance or surety bond, or to fulfill any obligation under this Agreement which endangers or threatens life or property, where such failure continues for a period of three (3) business days after receipt of written notice of such breach; (c) the failure by Licensee to provide (i) reasonable written evidence of compliance with Legal Requirements or any other documentation or information which Licensor may reasonably require of Licensee under the terms of this Agreement, where any such failure continues for a period of ten (10) business days following written notice to Licensee; (d) the failure of Licensee to comply with any of the provisions of Section 4 of this Agreement, where any such failure continues for a period of ten (10) business days following written notice to Licensee: (e) Licensee’s abandonment of the Equipment in License Area or the Building; or (f) Licensee’s commencement of any case, proceeding or other action under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, conservatorship or relief of debtors, seeking to have an order for relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent or Licensee’s admitting in writing its inability to pay its debts as they become due. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity.

13. Remedies/Termination.

13.1 Upon occurrence of an Event or Default, Licensor shall have available to it all remedies at law or in equity and, in addition to any other remedy available to Licensor at law or in equity, Licensor may elect to terminate this Agreement by written notice to Licensee, and this Agreement shall terminate as of the effective date of the notice. If Licensee files a petition under the Bankruptcy Code or under any other similar federal or state law, Licensee unconditionally and irrevocably agrees that Licensor shall be entitled, and Licensee unconditionally consents, to relief from the automatic stay so as to allow Licensor to exercise its rights and remedies under this Agreement with respect to the Building or the License Area. In such event, Licensee hereby agrees it shall not, in any manner, oppose or otherwise delay any motion filed by Licensor for relief from the automatic stay. Licensor’s enforcement of the rights granted herein for relief from the automatic stay is subject to the approval of the bankruptcy court in which the case is then pending.

13.2 Reserved.

13.3 Interest. Any monetary payment due Licensor hereunder not received by Licensor when due shall bear interest at the lower of (i) twelve percent (12%) per annum or (ii) the highest interest rate allowable by law from the date due until paid in full.

13.4 Termination by Licensee.

(a) In the event Licensor fails to provide Basic Capacity as provided under this Agreement, including the Additional Capacity, Licensee shall have the right, as its sole remedy, to terminate this Agreement within sixty (60) days of any such failure by providing written notice thereof to Licensor.

(b) In addition to the termination right of Licensee set forth in Section 13.4 above, Licensee shall have the right, as its sole remedy, to terminate this Agreement (i) if Licensor has not completed the work in the License Area required to be completed by Licensor pursuant to Section 9(d) of the Basic License Terms within fourteen (14) business days after the later of (A) the execution of this Agreement by each of the parties hereto, and B) Licensor’s receipt of plans and specifications reasonably acceptable to Licensor, provided that Licensee shall provide written notice to Licensor of any such termination within ten (10) business days following the expiration of such fourteen (14) business day period, and failing such timely notification, Licensee shall be deemed to have waived its right to terminate this Agreement pursuant to this Section 13.4(b)(I); (ii) if incidents of failure to satisfy the Commitment Levels have exceeded the maximum frequency permitted under Sections 9(b), (c) and (e) of the Basic License Terms, in each case, upon notice to Licensor within thirty (30) days of the event giving rise to Licensee’s termination right.

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(c) Following receipt by Licensor of any termination notice from Licensee delivered pursuant to the terms and conditions of this Section 13.4, Licensor shall refund the unapplied portion of the security deposit together with any prepaid but unapplied License Fees and any prepaid but unapplied installation fees (not to exceed a total of $27,000 in the aggregate) paid to Licensor by Licensee and Licensee shall vacate the License Area and restore the License Area in accordance with the Policies and Procedures and the terms and conditions of Section 9 within thirty (30) days of the date of such termination notice, whereupon the parties shall have no further obligations to each other under this Agreement except those obligations that expressly survive its termination. If Licensee elects to terminate this Agreement pursuant to this Section 13.4, Licensee shall not be entitled to any abatement of License Fees or any other remedy hereunder.

13.5 Breach by Licensor. Licensor shall not be deemed in breach of this Agreement unless Licensor fails within a reasonable time to perform an obligation required to be performed by Licensor. For purposes of this Section 13.4, a reasonable time shall in no event be less than thirty (30) days after receipt by Licensor, and any lender whose name and address shall have been furnished Licensee in writing for such purpose, of written notice specifying the obligation of Licensor that has not been performed: provided, however, that if the nature of Licensor’s obligation is such that more than thirty (30) days are reasonably required for its performance, then Licensor shall not be in breach if performance is commenced within such thirty (30) day period and thereafter diligently pursued to completion.

14. Assignment and Sublicensing.

14.1 Licensee’s Assignment or Sublicensing. Licensee shall not assign, mortgage, pledge or otherwise transfer this Agreement, in whole or in part, nor sublicense or permit use by any party other than Licensee of all or any part of the License Area, without obtaining in each instance the prior written consent of Licensor, which consent Licensor shall not unreasonably withheld, subject to the terms and provisions of Licensor’s form of Consent to Assignment/Sublicensing. Notwithstanding the foregoing, Licensee shall not be required to obtain prior written consent from Licensor with respect to an assignment or transfer of this Agreement in connection with any merger, consolidation or sale of all or substantially all of its assets, provided that Licensee’s successor-in-interest has a net worth equal to or greater than the net worth of Licensee as of the date hereof. Any purported assignment or sublicensing contrary to the provisions hereof without Licensor’s written consent shall be void. The written consent by Licensor to any assignment or sublicensing shall not constitute a waiver of such consent to any subsequent assignment or sublicensing.

14.2 Licensor’s Assignment. If Licensor conveys its interest in the License Area or the Building, Licensor shall provide Licensee with notice of such conveyance and Licensor shall be automatically relieved from all liability as respects the further performance of its covenants or obligations hereunder after the effective date of such conveyance and from any and all further obligations, liabilities, and claims arising from or connected with this Agreement.

15. Notice.

15.1 Notice Requirements. All notices required or permitted by this Agreement shall be in writing and may be delivered in person (by hand or by courier) or may be sent by certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile transmission, and shall be deemed sufficiently given if served in a manner specified in this Section 15. The addresses noted in the Basic License Terms shall be that party’s address for delivery or, mailing of notices. Either party may by written notice to the other specify a different address for notice. A copy of all notices to Licensor shall be concurrently transmitted to such party or parties at such addresses as Licensor may from time to time hereafter designate in writing.

15.2 Date of Notice. Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on the date of delivery shown on the receipt card. Notices delivered by U.S. Postal Service Express Mail or overnight courier that guarantee next day delivery shall be deemed given upon delivery. Notices transmitted by facsimile transmission or similar means shall be deemed delivered upon telephone confirmation of receipt, provided a copy is also delivered via overnight courier or mail. If notice is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day.

16. Additional Capacity; Right of First Refusal.

Licensee shall have the right to install additional power circuits, rack grounding to the base Building grounding grid system, feeders, risers, electrical facilities and other such installations similar to the installations contained in the License Area as required for up to ten (10) additional racks/cabinets (“Additional Capacity”) in an area adjacent to the License Area, subject to Licensee’s execution of a License Agreement similar in form to this Agreement containing

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license fees calculated at rates equivalent to those used to calculate the License Fees contained in this Agreement. In addition, Licensor shall notify Licensee in writing in the event any third party has offered to license any area adjacent to the License Area (“Adjacent Area”) at least seven (7) days prior to entering into any license agreement with respect to such Adjacent Area by delivering to Licensee a notice describing the material economic terms of the proposed License of the Adjacent Area (the “Notice”). Licensee may, upon written notice to Licensor within five (5) days after receipt of the Notice, elect to license the Adjacent Area for the remainder of the Term, including any Option Term, on substantially the same terms and conditions as contained in this Agreement (“Right of First Refusal”). If Licensee fails to timely exercise its Right of First Refusal, Licensee shall be deemed to have waived such Right of First Refusal and Licensor shall have no further obligation to Licensee with respect to the licensing of the Adjacent Area described in the Notice; provided, however, that if Licensor does not enter into a license agreement with respect to the Adjacent Area containing license fees of no less than ninety-five percent (95%) of the license fees described in the Notice within ninety (90) days of the date of the Notice, such Adjacent Area shall once again be subject to the Right of First Refusal provided herein. In the event that Licensee enters into a license agreement for an Adjacent Area, Licensor shall provide Licensee with electrical capacity comparable to the average circuits per rack or cabinet provided in this Agreement at rates to be agreed upon by Licensor and Licensee.

17. Option to Renew.

Licensor hereby grants Licensee two (2) consecutive options to extend the Term, each for a period of one (1) year (each, an “Option Term”) on the same terms and conditions as this Agreement (other than the Term), which applicable renewal option shall be deemed to have been exercised automatically unless Licensee shall have delivered to Licensor written notice of Licensee’s election not to exercise such renewal option (the “Opt-out Notice”) at least ninety (90) days prior to the expiration of the Term, or first Option Term, as applicable. Notwithstanding the foregoing, if, as of the date of delivery of the Opt-out Notice, or as of the end of the then current Term, Licensor has provided written notice to Licensee that Licensee remains in default under this Agreement beyond the expiration of any applicable notice and cure period, the applicable renewal option shall not be deemed to have been exercised automatically, the then current term shall expire on the scheduled expiration date, and Licensee shall have no further rights under this Section 17.

18. Force Majeure.

Except for monetary obligations, neither party shall be responsible for failure to act in accordance with the terms of this Agreement if such failure is due to causes beyond the party’s reasonable control, financial inability excluded, such as earthquake, flood, acts of God, war, or terrorist attacks, whether physical or electronic, or failure of the internet; provided that the party who is unable to act promptly provides written notice detailing the problem and further provided that such party use commercially reasonable efforts to overcome such delay.

19. Governing Law.

This Agreement shall be governed by and construed under the laws of the State of California.

20. Successors.

This Agreement shall inure to the benefit of and be binding on the parties, and their heirs, successors, assigns and legal representatives, but nothing contained in this Section 19 shall be construed to permit an assignment or other transfer except as provided in Section 14.

21. Severability.

The invalidity of any provision of this Agreement, as determined by a court of competent jurisdiction, shall in no way affect the validity of any other provision hereof.

22. Days.

Unless otherwise specifically indicated to the contrary, the word “days” as used in this Agreement shall mean and refer to calendar days.

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23. Limitations on Liability.

The obligations of Licensor under this Agreement shall not constitute personal obligations of Licensor, the individual partners, managers or members of Licensor or its or their individual partners, directors, officers, employees, members, investors or shareholders, and Licensee shall look to the License Area and the Building, and to no other assets of Licensor, for the satisfaction of any liability of Licensor with respect to this Agreement, and shall not seek recourse against Licensor or the individual partners or members of Licensor, or its or their individual partners, directors, officers, members, investors or shareholders, or any of their personal assets for such satisfaction.

24. Time of Essence.

Time is of the essence with respect to the performance of all obligations to be performed or observed by the parties under this Agreement.

25. Waivers.

No waiver by Licensor of any Event of Default hereunder by Licensee shall be deemed a waiver of any other term, covenant or condition hereof, or of any subsequent Event of Default by Licensee of the same or of any other term, covenant or condition hereof. A party’s consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of such party’s consent to, or approval of, any subsequent or similar act by the other party, or be construed as the basis of an estoppel to enforce the provision or provisions of this Agreement requiring such consent. The acceptance of License Fees by Licensor shall not be a waiver of any Event of Default by Licensee. Any payment by Licensee may be accepted by Licensor on account of moneys or damages due Licensor, notwithstanding any qualifying statements or conditions made by Licensee in connection therewith, which such statements and/or conditions shall be of no force or effect whatsoever unless specifically agreed to in writing by Licensor at or before the time of deposit of such payment.

26. Covenants and Conditions; Construction of Agreement.

All provisions of this Agreement to be observed or performed by Licensee are both covenants and conditions. In construing this Agreement, all headings and titles are for the convenience of the parties only and shall not be considered a part of this Agreement. Whenever required by the context, the singular shall include the plural and vice versa. This Agreement shall not be construed as if prepared by one of the parties, but rather according to its fair meaning as a whole, as if both parties had prepared it.

27. Consents.

Whenever the consent, approval, judgment or determination of Licensor is required or permitted under this Agreement, Licensor may exercise such judgment in Licensor’s sole and absolute discretion in granting or withholding such consent or approval or in making such judgment or determination without reference to any extrinsic standard of reasonableness, unless the provision providing for such consent, approval, judgment or determination specifies that Licensor’s consent or approval is not to be unreasonably withheld, or that such judgment or determination is to be reasonable, or otherwise specifies the standards under which Licensor may withhold its consent. The review and/or approval by Licensor of any item to be reviewed or approved by Licensor under the terms of this Agreement or any Exhibits hereto shall not impose upon Licensor any liability for accuracy or sufficiency of any such item or the quality or suitability of such item for its intended use. Any such review or approval is for the sole purpose of protecting Licensor’s interest in the Building, and no third parties, including Licensee or Representatives and visitors or Licensee or any person or entity claiming by, through or under Licensee, shall have any rights hereunder.

28. Reservations.

Licensor reserves to itself the right, from time to time, to grant, without the consent or joinder of Licensee, such easements, rights and dedications that Licensor deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights, dedications, maps and restrictions do not unreasonably interfere with the use of the License Area by Licensee. Licensee agrees to sign any documents reasonably requested by Licensor to effectuate any such easement rights, dedication, map or restrictions.

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29. Authority.

If either party hereto is a corporation, trust, limited liability company, partnership, or similar entity, each individual executing this Agreement on behalf of such entity represents and warrants that he or she is duly authorized to execute and deliver this Agreement on its behalf.

30. Survival.

Sections 4.l(a) (Use), 9 (Removal of Equipment), 10.3 (Indemnity), 10.4 (Exemption of Licensor from Liability) and 33 (Attorney’s Fees) shall survive the expiration or earlier termination of the Agreement.

31. Amendment.

The Agreement may be changed only by a written agreement signed by both parties. As long as they do not adversely change Licensee’s obligations hereunder, Licensee agrees to make such reasonable non-monetary modifications to this Agreement as may be reasonably required by a lender in connection with the obtaining of normal financing or refinancing of the Building (“Lender”).

32. Subordination; Estoppel Certificates.

This Agreement shall be subject and subordinate to any ground lease, mortgage, deed of trust or other hypothecation or security device now or hereafter placed upon the License Area or the Building (collectively, “Security Device”), to any and all advances made on the security thereof and to all renewals, modifications, and extensions thereof. Lessee agrees that the holders of any such Security Devices shall have no liability or obligation to perform any of the obligations of Licensor under this License. Any Lender may elect to have this Agreement superior to the lien of its Security Device by giving written notice thereof to Licensee, notwithstanding the relative dates of documentation or recordation thereof. Any Lender who succeeds to the interests of Licensor hereunder shall have the option to either terminate this Agreement upon notice to Licensee or to maintain this Agreement in full force and effect, in the sole discretion of such Lender. The agreements in this Section 32 shall be effective without the execution of any further documents; provided, however, that upon written request from Licensor or Lender in connection with a sale, financing or refinancing of the Building, Licensee and Licensor shall execute such further writings as may be reasonably required to separately document any subordination provided for herein. In addition, Licensee shall, within ten (10) days after the written notice from Licensor, execute, acknowledge and deliver to Licensor an estoppel certificate in the form reasonably requested by Licensor or any Lender, together with any additional information, confirmation and/or statements reasonably requested by Licensor.

33. Attorneys’ Fees.

If either party commences an action or arbitration against the other party arising out of or concerning this Agreement, the prevailing party in such litigation or arbitration shall be entitled to reasonable attorneys’ fees and costs in addition to such relief as may be awarded.

34. No Real Property Interest Conveyed; No Joint Venture.

Licensee’s interest is as a licensee; with such license revocable upon an Event of Default. Nothing in this Agreement grants Licensee an easement, leasehold, or other property or ownership right in the License Area or the Building or creates a partnership or joint venture between Licensor and Licensee. Licensee acknowledges and agrees that this agreement does not comprise a leasehold or any other interest in real estate involving the Building, the License Area or otherwise. Except as expressly provided herein, nothing in this Agreement shall be construed to limit Licensor’s right to maintain and operate the Building and the License Area in its sole discretion.

35. Entire Agreement.

This Agreement, consisting of the Basic License Terms and the Exhibits attached hereto, contains the entire agreement between the parties regarding the subject matter hereof, and there are no verbal or other agreements which modify or affect this Agreement. The Agreement supersedes all prior discussions and agreements made by or on behalf of Licensor and Licensee regarding the subject matter hereof.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as this 11 day of November, 2003.

LICENSEE:		LICENSOR:
Brightmail Incorporated a California Corp.		HARRISON 160, LLC,
		a California limited liability company
By:	/s/ Michael Irwin	By:	/s/ Illegible
	Print Name: Michael Irwin Title: CFO		Authorized Signatory

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Exhibit A

365 Scope of Work

365 will provide the following in accordance with the exhibit drawing for Cage #6 (Brightmail) dated 11-4-03:

• Supply and install (5) Bud Industry 4-Post / 19” open cabinets designated as “4” on the exhibit drawing (cabinets C7.06.0 1, C7.06.02, C7.06.03, C7.06.04, C7.06 .05)

• Supply and install (4) Chatsworth 2-Post open / 19” racks designated as “T” on the exhibit drawing (racks C7.06.06, C7.06.07, C7.06.08, C7.06.09)

• Supply and install (4) - 4” wire minders between the “T’ racks

• Supply and install rack mounted and ceiling mounted 18” ladder rack for cabling provided by others.

• Supply and install power as designated on the exhibit drawing.

• Ground cabinets to under floor grid system.

• Supply and install secure cage as designated on the exhibit drawing.

• Rackable racks (designated as “R” on the exhibit drawing) will be provided by Licensee (C7.06.10, C7.06.11, C7.06.12, C7.06.13, C7.06.14, C7.06.15, and C7.06.16). Power is included to these racks.

• “Future” rack positions will not be installed at C7.06.17, C7.06.18, C7.06.19, C7.06.20, C7.06.21, C7.06.22, C7.06.23, and C7.06.24. This area will be left open.

• Cross-Connect cable to be installed from 365 patch panel to Cage #6

• All other cage cabling and patch panels to be provider under separate contract with Licensee vendor.

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[GRAPHIC]

A-2

Exhibit B

Policies and Procedures

1. The License Area is to be used by Licensee solely for lawful purposes in accordance with these Policies and Procedures and the other terms and conditions of the License Agreement.

2. Licensee Access - Licensee shall designate in writing, its primary contact (“Primary Contact”) and three representatives having authorization to add/remove Licensee representatives from the “Licensee Access List.” Only those individuals identified in writing by Licensee on the Licensee Access List may access the License Area and the Building It is the responsibility of Licensee to inform security personnel of Licensor of any change of status for authorized personnel.

3. Licensee acknowledges that the security and access provisions employed by Licensor or an independent contractor on behalf of Licensor shall not be construed as Licensor’s acceptance of responsibility or liability or the security of persons or property within the Building or the License Area. Licensor does not guaranty the security of Licensee’s property or Equipment. Licensor may require access to the License Area in order to install or maintain infrastructure systems to support the Building and the Building systems, provided that Licensee’s access to the License Area shall not be unreasonably impeded thereby, and provided further that the operations of Licensee shall not be unreasonably disturbed and all such work shall be completed as promptly as reasonably practicable. Licensor shall use commercially reasonable efforts to minimize any disruption of Licensee’s operations and use of the License Area during any access of the License Area by Licensor permitted hereunder.

4. The Primary Contact, utilizing the Security Authorization Form, must identify visitors in advance of their visit to the Building. A temporary cardkey (good for one visit) will be issued when the authorized visitor presents their authorized company ID and surrenders their valid driver’s license or valid photo ID in exchange for the temporary ID. Such form of identification will be held at security until each visitor completes his or her activities in the Building. A Licensee Representative must accompany any visitor to the License Area or the Building.

5. Upon entering and leaving the Building, each Licensee Representative and authorized visitor must sign in or out in the Building logbook. Upon signing out and returning the security access card, a visitor’s photo identification will be returned.

6. Licensee shall cooperate in keeping the Building locked and in restricting access to unauthorized personnel. On entering or leaving the Building, each Licensee Representative and authorized visitor must make sure the door is shut and not left ajar. At no time shall entrance be granted by Licensee or any Licensee Representative to anyone except employees or contractors for whom security access has been authorized by use of the Security Authorization Form.

7. Licensee, Licensee’s Representatives, authorized visitors and guests shall not obstruct corridors, halls, stairways, sidewalks, building entrance ramps, or site driveways at any time. Corridors, halls, stairways, sidewalks, building entrance ramps and site driveways shall be used for egress and ingress only. There shall be no congregating in hallways.

8. Parking - Only Licensee and Licensee’s Representatives may access the Building parking area. Parking is permitted on a first come first serve basis. Licensee vendors and/or contractors may not have access to the parking garage unless otherwise approved by Licensor. Licensee and its employees shall not allow any unauthorized persons to have access to the parking garage without written approval by Licensor. Licensee and Licensee’s Representatives shall park in the designated parking spaces. Any vehicles parked outside the designated areas will be subject to removal from parking garage at owner’s expense.

9. All activities in the License Area and the Building must be in compliance with all laws, including all applicable local, state, and federal laws, rules, codes and regulations. Prior to commencement of any work in the License Area, Licensee must obtain any necessary federal, state, and municipal permit, licenses and approvals. Licensor must also approve all work to be undertaken by Licensee in advance.

10. Licensee is responsible for installation of its own Equipment. All of the Equipment must fit inside the License Area. All Equipment must be UL approved. All cabling used by Licensee must meet national electrical and fire

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standards. All cables must be clearly labeled. Licensee shall not place or leave any Equipment or other items outside the License Area without the express written consent of Licensor.

11. Licensee shall maintain the License Area in a neat and orderly manner and shall promptly remove all trash, packing materials, boxes, etc. that Licensee has brought or had delivered to the Building.

12. Upon the expiration or earlier termination of Licensee’s License Agreement, Licensee shall remove all Equipment from the License Area and shall repair, or reimburse Licensor for the reasonable costs to repair any damage caused by Licensee during the course of any such removal, except for ordinary wear and tear.

13. Licensee will not permit any third party to locate any equipment in the License Area without the prior written consent of Licensor, which consent shall not be Unreasonably withheld. Any such permitted use shall be subject to these Policies and Procedures and the other terms and conditions.

14. The following items are banned from the Building, and Licensee agrees not to bring these items into the Building or the License Area: alcohol, cameras (unless used exclusively for taking photographs of the License Area and Licensee’s Equipment), controlled substances, explosives, flammable liquids, gases or chemicals, tape recorders, chemical agents, weapons of any kind, wet cell batteries and all similar equipment and materials; provided, however, that Licensee may engage in the safe and lawful use and storage of quantities of office supplies including copier toner, cleaning supplies and other such substances customarily used in offices or colocation spaces. There is no smoking permitted in the Building. There is also no smoking permitted in front of the Building front entrance. There will be a designated smoking area adjacent to the loading dock. No food or drink will be allowed in the License Area. No animals are permitted in the Building.

15. Licensee shall maintain and operate the Equipment in a safe manner, so as to avoid interference, physical or electronic, with other occupants of the Building and their equipment. Licensee shall not disrupt, adversely affect or interfere, physically or electronically, with other licensees of space in the Building or with any other licensee’s use and enjoyment of such licensee’s license area within the Building or the common areas of the Building.

16. Any interference, physical or electronic, caused to the equipment of other licensees of the Building by the installation, operation, maintenance replacement or repair of Licensee’s Equipment shall result in the immediate disconnection and removal of such Equipment by Licensor, at Licensee’s sole risk, cost and expense if such interference is not cured within twenty-four (24) hours of receipt of notice of noncompliance (“Interference Cure Period”). Licensor reserves the right to take other reasonable actions to prevent such interference after the expiration of the Interference Cure Period.

17. Relocation of License Area. Licensor may, in Licensor’s reasonable discretion and at Licensor’s expense, change the location or the configuration of the License Area or other space within the Building provided that such change does not materially adversely affect the operations of Licensee in the Licensed Area. Licensor and Licensee shall cooperate in good faith to minimize any disruption in Licensee’s operations that might be caused by such changes in location or configuration of the License Area.

18. Work Orders - Licensee will be required to complete a “Request for Work Order” form to Licensor in connection with any proposed changes to Licensee’s use or configuration of the License Area. Upon submission of the work order, Licensor will evaluate the request and return a written estimate and schedule for the work. All work orders requiring changes to the existing License Agreement will result in an Amendment to License Agreement to be approved by Licensee prior to any work being performed in the License Area, which approval shall not be unreasonably withheld.

19. Remote Hands (Data Center Technicians) - Licensor, or an independent contractor on behalf of Licensor, shall provide Data Center Technicians capable of performing certain limited maintenance services with respect to the Equipment in accordance with the Licensee’s written directions. Licensee shall access Remote Hands by contacting the Licensor’s Help Desk. All written instructions shall be submitted along with the ticket.

20. Help Desk Call In - Licensor shall provide a Help Desk phone number for Licensee to call in to report troubles. The Help Desk will create a ticket that will be sent via e-mail to Licensee and to the Data Center Technician on site. The Help Desk will monitor the ticket and notify Licensee when the ticket item is closed or escalate to the appropriate level based on escalation procedures.

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21. Escalation protocol - The Help Desk is the communications facilitator whose function is to assist in communicating events that occur in the Data Center environment to all the people who need to be informed during an event. The people who are paged are notified according to the “criticality” levels that the Help Desk members report. To perform this function effectively, the Help Desk uses the “escalation protocol” flow chart. This flow chart guides the Help Desk through the process of reporting and managing an event from the moment it is discovered by, or reported to, the Help Desk. The flow chart describes how to instruct the Help Desk to page out according to “Class”, how to escalate and de-escalate the event, and how to close the event. Since this procedure is general in nature and cannot anticipate all possible contingencies, the Data Center Technicians staffing the Help Desk may, at times, need to use their own judgment regarding the definitions for a specific event classification. For any unscheduled event that is escalated using the Help Desk, a Post Incident Report (PIR) will be written to document the event.

22. Shipping and receiving - It is the Licensee’s responsibility to notify Licensor of the impending receipt pf any shipments through the Help Desk. Licensor, or an independent contractor on behalf of Licensor, will take receipt of Licensee supplied equipment for a limited period of time and store it in a secure environment. It is the Licensee’s responsibility to notify the shipping location of the impending receipt via e-mail. Licensor, or an independent contractor on behalf of Licensor will only release a shipment upon obtaining an authorized signature and verifying identification. Security personnel use commercially reasonably efforts to monitor incoming and outgoing packages to ensure that goods entering and leaving the premises are accompanied by duly completed documentation. Once Licensor has released a shipment to Licensee, Licensor is no longer responsible for tracking the shipment and it becomes Licensee’s responsibility.

23. No work will be done below the raised floor area without the prior written approval of Licensor.

24. No exposed cables shall be installed under raised flooring.

25. Licensee shall not inscribe, paint or affix advertisements, identifying signs or other notices on any part of the corridors, doors, public areas, common areas or the grounds of the License Area or any subdivision related thereof.

26. Licensee shall be allowed full use of provided common areas of the Building (bathrooms, coffee station, hallways, etc.). Licensee and Licensee’s Representatives shall not conduct activities in common areas that interfere with the activities of other licensees of the Building or Licensor. Licensee should make a concerted effort to keep all such areas clean and neat at all times. Licensee and Licensee’s Representatives shall only use the common areas of the Building for their designated purposes.

27. Failure by Licensee or Licensee’s Representatives to materially comply with the Policies and Procedures in effect from time to time may result in (a) removal of Licensee or any Licensee Representative from the Building, (b) restriction of Licensee’s access to the Building, (c) impositions of additional charges, and/or (c) termination of the License Agreement.

28. Licensor reserves the right, in Licensor’s sole discretion, to amend these Policies and Procedures at any time subject to the provisions of Section 3 of the License Agreement. Licensee acknowledges that the Policies and Procedures are subject to such change from time to time.

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ADDENDUM # 1

This Addendum #1 is made as of January 13, 2004 by and between HARRISON 160, LLC (Licensor) and BRIGHTMAIL INCORPORATED (Licensee), and modifies the License Agreement between Licensor and Licensee dated November 13, 2003.

Not withstanding anything to the contrary contained in the License Agreement Licensor and Licensee agree to the following modifications;

1. The Licensor will provide the additional below listed cross-connects;

Description	Units	Non-recurring charge/unit		Recurring charge/unit			Non-recurring charges		Recurring charges
POTS	4	$	—	$	50.00		$	—	$	200.00
OC –x (Fiber)	4	$	—	$	200.00		$	—	$	800.00
Bundled Discount	1	$	—	$	(400.00	)	$	—	$	(400.00	)
Subtotal:							$	—	$	600.00

2. Billing commencement for the above additional rent will commence on February 1, 2004 in the total amount of $600.00 monthly recurring charges for the term and any extensions thereof as set forth on the License Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as this 14th day of January     , 2004.

LICENSEE:		LICENSOR:
Brightmail Incorporated		HARRISON 160, LLC,
a __________________________________		A California limited liability company
By:	/s/ Eric Stromberg	By:	/s/ Illegible
	Print Name: Eric Stromberg		Authorized Signatory
	Title: Dir. IT

ADDENDUM # 2

This Addendum #2 is made as of January 13, 2004 by and between HARRISON 160, LLC (Licensor) and BRIGHTMAIL INCORPORATED (Licensee), and modifies the License Agreement between Licensor and Licensee dated November 13, 2003.

Not withstanding anything to the contrary contained in the License Agreement Licensor and Licensee agree to the following modifications;

1. The Licensor will provide the additional below listed Internet Protocol (IP) Bandwidth. Bursting cap based on 250 Mbps;

Description	Units	Non-recurring charge/unit		Recurring charge/unit		Non-recurring charges		Recurring charges
IP Bandwidth	10	$	—	$	100.00	$	650.00	$	1,000.00
Bursting 95%		$	—	$	100.00	$	—		Bill on Actual
Total Monthly Charge:						$	650.00	$	1,000.00

2. Billing commencement for the above additional rent will commence on February 1, 2004 in the total amount of $1,000.00 monthly recurring charges for the term and any extensions thereof as set forth on the License Agreement. A set-up charge of $650 will be billed with the first months service invoice.

3. Licensee may terminate this Addendum #2 at anytime without cause provided that it gives Licensor at least 60 days prior written notice of its intent to terminate this Addendum #2.

4. Licensee will not originate the transmission of or store material in violation of any Federal or state laws or regulations and will use Licensor’s services in a responsible manner.

5. Bandwidth usage will be calculated by Licensor using the 95th percentile of samplings taken at 5 minute intervals on a monthly basis. Samples are taken by Licensor via SNMP from the Licensor switch or router port Licensee is directly connected to and are the greater of input or output bits per second. 95th percentile is determined by sorting the sample data from smallest to largest and discarding the top 5 percent, with the remaining largest sample designated as the 95th percentile. Licensee will have access to daily, weekly, monthly and yearly bandwidth graphs.

6. Service Level: network will be available 99.9% of the time or better.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as this 29th day of January     , 2004.

LICENSEE:		LICENSOR:
Brightmail Incorporated, a California Corporation		HARRISON 160, LLC, A California limited liability company
By:	/s/ Michael Irwin	By:	/s/ Illegible
	Print Name: Michael Irwin		Authorized Signatory
	Title: CFO

EX-10.15

EXHIBIT 10.15

Herakles, llc

Herakles, LLC

Terms & Conditions

(Exhibits A, B, C, D & E incorporated into this Agreement.)

AGREEMENT

This Agreement (“Agreement”), made as of the date set out on the last page hereof, sets forth the Terms and Conditions by which Herakles, LLC, a Delaware Limited Liability Corporation (“Herakles”), shall provide Customer with the Services listed in the Accepted Service Agreement. The (“Accepted Service Agreement”) executed by Customer requesting provision of Services from Herakles is hereby expressly incorporated into and forms a part of this Agreement.

ARTICLE 1: DEFINITIONS

Exhibit A - Accepted Service Agreement: The Accepted Service Agreement is a commitment by Herakles to deliver the Services and an acceptance from the Customer of the terms, conditions, and services to be provided. The executed Accepted Service Agreement, once executed, will be attached hereto and incorporated by reference as Exhibit A.

Exhibit B - Customer Installation Specifications: Customer equipment installation guidelines are attached hereto and incorporated by reference as Exhibit B.

Exhibit C - Acceptable Use Policy: The policies and guidelines established by Herakles governing the use of the Herakles Network. The Acceptable Use Policy is attached hereto and incorporated by reference as Exhibit C.

Exhibit D - IP Address Policy: Policies and guidelines established by Herakles governing the allocation and use of IP addresses. The IP Address Policy is attached hereto and incorporated by reference as Exhibit D.

Exhibit E - Service Level Agreement: The statement of Herakles’ minimum commitment to service levels, operational protocols, physical specifications, and performance standards. A commitment by Herakles to provide a state-of-the-art colocation facility, optimally engineered for high-speed access to Updated 02/04 the Internet backbone for dependable high performance service. The Service Level Agreement (SLA) is attached hereto and incorporated by reference as Exhibit E.

Agreement: This Agreement together with any attachments, including but not limited to, the Accepted Service Agreement, Installation Specifications, Accepted Use Policy (AUP) IP Address Policy and the Service Level Agreement (SLA).

Colocation Facility: Herakles’ facility located at 1100 North Market Blvd., Sacramento, CA 95834, from which the Services shall be provided.

Commencement Date: The date on which this Agreement is executed by both Herakles and Customer.

Confidential Information: Any non-public information regarding the business of a party to this Agreement or an affiliate of such party provided to the other party where such information is marked or otherwise identified as being “proprietary” or “confidential”, or where such information is, by its nature, confidential.

Customer Information: The credit information which may be required by Herakles prior to issuing an Accepted Service Agreement, which credit information shall be submitted by Customer in the form requested by Herakles.

Colocation: The colocation Services provided by Herakles that specifically provide for the Customer lodging its equipment at the Colocation Facility.

Security and Safety Policy: The policies and procedures governing physical access to the Herakles Data Center. It is Herakles’ policy to admit and assist any authorized person(s) who have a valid business need to the facility. A copy of the Security and Safety Policy can be provided.

Services: The use by Customer of computing, telecommunications, software, and information services provided by Herakles, which services also include the provision of access to computing, telecommunications, software and information services provided by others via the Internet on a seven days per week, 24 hours per day basis.

Term: The period of time specified in the Accepted Service Agreement during which Customer agrees to purchase the Services, including any extension thereof agreed to by the parties, which shall begin on the Commencement Date.

ARTICLE 2: SERVICE AGREEMENTS

2.1 Service Agreements. Subject to Herakles’ satisfaction with the Customer Information submitted in conjunction with a Service Agreement, Herakles’ delivery to Customer of an Accepted Service Agreement shall constitute Herakles’ agreement to provide the Services requested in a Service Agreement at the location, prices, purchase commitment and for the Term set out in such Service Agreement. Nothing in this Agreement shall be construed to obligate Customer to submit, or Herakles to accept, Service Agreements.

2.2 Covenants by Herakles. Herakles agrees that, upon issuance by it of an Accepted Service Agreement, it shall provide the Services at its Colocation Facility and on its network in consideration for the charges to be paid by Customer pursuant to Article 4 (Billing Provisions) and in accordance with the terms and conditions of this Agreement and any corresponding Accepted Service Agreement. Herakles shall retain all title to equipment or materials used to deliver the Services, except as otherwise agreed to by the parties in writing.

ARTICLE 3: COLOCATION FACILITIES

3.1 Grant of License.

(a) Subject to the provisions of this Agreement, Herakles hereby grants to Customer a nonexclusive license to install, operate, and maintain certain communications equipment of Customer in the Colocation Facility in the area approved by Herakles in the Accepted Service Agreement (the “Colocation Area”).

(b) Customer shall not directly interconnect its equipment to the facility of any other carrier or to

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another customer’s equipment at the Colocation Facility without the express written consent of Herakles, which consent Herakles shall not unreasonably withhold. The foregoing is merely a precautionary measure to prevent incompatibility with connection to the Data Center or other reasonable safety precautions directly related to such connections to the Data Center. Herakles shall not use the aforementioned restriction as a means solely to prevent Customer from using the services of other carriers. (c) Customer shall maintain the Colocation Area in orderly and safe condition, and shall return the Colocation Area to Herakles at the conclusion of the Term in the same condition (reasonable wear and tear excepted) as when such Colocation Area was delivered to Customer.

3.2 Use of Colocation Facility. Customer shall use the Colocation Facility solely for the purpose of installing, maintaining and utilizing the communications equipment and other personal property of Customer installed in the Colocation Facility pursuant to the terms of this Agreement and the Accepted Service Agreement. Customer shall not use the Colocation Facility, or allow access thereto or use thereof, except as allowed by the terms of this Agreement and the Security and Safety Policy. Except as otherwise provided, Customer’s equipment shall remain the sole property of Customer. Customer hereby waives any right, title, or interest in or to any of Herakles’ equipment or property that may be used in the Colocation Facility or in the provision of Services, whether located in the Colocation Facility or the Colocation Area, or elsewhere.

3.3 Customer-Supplied Equipment.

(a) Herakles shall not be responsible for the operation or maintenance of any equipment supplied by Customer. At Customer’s request, Herakles may install equipment supplied by Customer in order to provide the Services; unless specifically agreed by Herakles in writing, Herakles shall not thereafter be responsible for the repair, operation or maintenance of such equipment. Herakles shall not be responsible for the transmission or reception of signals through equipment supplied by Customer or for the quality of, or problems with, such transmission.

(b) Herakles, LLC assumes Customer owns all equipment installed in the Herakles Data Center. If third parties are involved in the ownership of the equipment it must be communicated to Herakles prior to the execution of this Agreement. Herakles reserves the right to hold any and all Customer Updated 02/04 equipment and/or deny access if payment is past due.

3.4 Availability. The furnishing of Internet Connectivity under this Agreement is subject to the availability of carriers to furnish Services.

3.5 Warranties Regarding Service. Any and all warranties regarding provision of the Services (and any remedies for breach thereof) are contained only in this Agreement, and/or Herakles’ Service Level Agreement and the Accepted Service Agreement. Herakles shall bear no liability for any warranty not embodied in such documents.

3.6 Access by Customer. Customer shall have access to the Colocation Facility and the Colocation Area as set forth in the Security & Safety Policy. General guidelines are listed below.

(a) If Customer does not require escorted access to the Colocation Facility, Customer shall have access 24 hours per day, 7 days per week.

(b) If Customer requests to have escorted access at the Colocation Facility, time and materials will be charged at then current rates. Additional charges may be applied in the event Herakles is required to escort a customer or customer representative due to said customer being out of compliance with the Security and Security Policy procedures.

(c) Herakles shall be given a minimum of 10 business days’ notice for any new installation of equipment, if installation must be performed in the presence of an authorized Herakles technician. The first two hours of the Technician’s time will be free with any additional time to be charged at then current rates.

(d) Herakles shall be given notice for maintenance visits by Customer, which visits shall be at a time mutually acceptable to the parties.

(e) Herakles shall be given at least 30 (thirty) minutes notice for Customer emergency visits.

(f) Herakles reserves the right to amend the Security and Safety Policy from time to time. Customer will receive notice of changes within 30 days and has the right to cancel, without 2 penalty, if Customer does not agree with the change.

3.7 Change in Service. Herakles reserves the right to change the terms of provision of Service hereunder by providing written notice to Customer at least 30 days prior to the date on which the change becomes effective. Herakles reserves the right to provide such notice and change the terms of provision of Services with less than 30 days notice if Herakles is so required by reason of its agreements with its suppliers or service providers. Subject to actual notice to Customer, use of the Services by Customer after the effective date of such change in Services shall constitute acceptance by Customer of the new terms and conditions. If Customer does not agree to the change in terms and conditions, Customer has the right to cancel this Agreement and any underlying Service Agreement without any liability by giving Herakles written notice as specified in this Agreement.

3.8 Colocation. The following additional service provisions shall apply to Customer’s use of the Colocation Area pursuant to an Accepted Service Agreement:

(a) During the Term, Customer shall pay for all services outlined in the Accepted Service Agreement

(b) Herakles shall perform such janitorial services, environmental systems and other maintenance and actions as are reasonably required to maintain the Colocation Facility in suitable condition for the placement and operation of communications equipment. Customer may, from time to time and in all cases subject to an Accepted Service Agreement, contract Herakles to maintain Customer’s equipment in the Colocation Area according to Customer’s instructions.

(c) Customer acknowledges that the charges for Services established in each Accepted Service Agreement have been determined by Herakles in reliance on such Services being provided for the full Term and agrees that if Customer terminates an

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Accepted Service Agreement or if the Accepted Service Agreement is terminated due to a failure of Customer to satisfy the requirements of this Agreement prior to the end of the Term, Customer shall pay a termination charge equal to the expenses incurred by Herakles in returning the Colocation Area to a condition suitable for use by other parties, in addition to a percentage of the monthly recurring fees set forth in the Accepted Service Agreement for the Colocation Area, calculated as follows: 100% of the remaining monthly recurring fees that would have been charged for the Colocation Area for months 1-12 of the Term.

3.9 Internet Services. The following shall apply to the provision by Herakles to Customer of dedicated Internet access services (“Internet Services”) pursuant to an Accepted Service Agreement: a) In the event Customer terminates Internet Services or if the delivery of Internet Services is terminated due to a failure of Customer to satisfy its obligations under the Agreement or any Accepted Service Agreement prior to the end of Term, Customer shall pay a termination charge equal to the charges paid or to be paid by Herakles for services purchased from other suppliers where such suppliers have been approved by Customer in writing in advance, used to deliver the Internet Services to Customer, plus the percentage of the monthly recurring charges for the terminated Internet Services calculated as follows: (i) 100% of the remaining monthly recurring charge for the Internet Services for the term of the Agreement.

ARTICLE 4: BILLING PROVISIONS

4.1 Monthly Invoices. Customer acknowledges that the charges for Services are as specified in any applicable Accepted Service Agreement. Herakles shall invoice all charges relating to its provision of Services to Customer on a monthly basis, unless otherwise set out in an Accepted Service Agreement. Nonrecurring charges are non-refundable and shall be due and payable by Customer immediately upon receipt of the invoice and monthly recurring charges shall be payable in advance on the first day of each calendar month during the Term, beginning on the Commencement Date. Adjustments for Services commenced or terminated in any billing period will be prorated to the number of days Services were actually provided in that month. Invoicing for Services by Herakles shall not begin until the Commencement Date. Invoices shall be sent to the billing address set forth in the Customer Contact form required at the time of contract execution.

4.2 Payment. All invoices shall be due and payable immediately upon receipt by Customer, and shall become past due 30 days after invoice date. The Updated 02/04 unpaid balance of any past due invoices shall bear interest at a rate of 1.5% per month or the maximum rate allowed by law, whichever is less, prorated on a daily basis.

Interest applies from the date the invoice becomes past due to and including the date that payment is received by Herakles. There is a $25.00 service charge for each check returned to Herakles as having insufficient funds.

4.3 Taxes. Customer shall be liable for and shall pay all taxes levied against its personal property situated at the Colocation Facility. Any state or local tax, fee, charge, or surcharge shall be payable by Customer only for Services that local tax, fee, charge, or surcharge shall be payable by Customer only for Services that are subject to such imposition.

4.4 Regulatory and Legal Changes. If any change in applicable law or regulation occurs that materially increases the cost of delivery of Services, Herakles and Customer shall negotiate in good faith an increase in the charges to Customer to reflect the increase in cost. If the parties are unable to agree on new charges within 30 days of delivery by Herakles of a written request for renegotiation, then Herakles may charge the increased cost to Customer, provided, however, that by doing so Customer shall be deemed to have been granted the right, exercisable only for a period of 30 days from the date on which the increased charge applied, to terminate the applicable Accepted Service Agreement upon 30 days’ prior written notice without paying any applicable termination charge.

4.5 Electricity. If any change in the cost or availability of electricity occurs beyond Herakles’ reasonable control that materially increases the cost of delivery of Services, Herakles and Customer shall negotiate in good faith an increase in the charges to Customer to reflect the increase in cost. If the parties are unable to agree on new charges within thirty (30) days of delivery by Herakles of a written request for renegotiation, then Herakles may charge the increased cost to Customer, 3 provided, however, that by doing so Customer shall be deemed to have been granted the right, exercisable only for a period of thirty (30) days from the date on which the increased charge applied, to terminate the applicable executed Service Agreement upon thirty (30) days’ prior written notice without paying any applicable termination charge.

4.6 Modifications. Customer shall reimburse Herakles for all costs incurred by Herakles in (a) making modifications or improvements to the Colocation Facility requested by Customer, (b) for fire suppression, supply of electricity or other utilities, and (c) the costs of any work or service performed for or facilities furnished to Customer, all to a greater extent or in a manner more favorable to Customer than that performed for or furnished to others within the Colocation Facility.

4.7 Disputed Invoices. If Customer disputes any charges contained in an invoice, Customer shall pay the undisputed portion of the invoice in full and submit a documented claim respecting the disputed amount, to be submitted to Herakles within 30 days of receipt of the invoice for such Services. Each party agrees to deal with such claim as expeditiously as possible in accordance with the provisions of Section 10.8. If Customer does not submit a claim within such 30-day period in accordance with this Section 4.7, Customer shall be deemed to have waived all its rights to dispute such amounts.

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4.8 Fraudulent Use of Services. Customer shall be solely responsible for all charges incurred respecting the Services, even if such charges were incurred as a result of fraudulent or unauthorized use of the Services, unless Herakles has actual knowledge of such fraudulent or unauthorized use and fails to inform Customer thereof or to otherwise limit or preclude such use. Nothing in this Section 4.9 shall obligate Herakles to detect or report unauthorized or fraudulent use of the Services.

4.9 Abandonment. If payment is unpaid for more than 30 days and the Customer has not notified Herakles in writing of their intent to bring their account current the equipment will be considered abandoned. Herakles has the right to dispose of any and all abandoned property, including computer equipment 30 days after written notice has been given to the Customer.

4.10 Option to Renew. This Agreement will automatically renew annually, unless notified in writing of intent to terminate (up to five years from the origination date) if a new Agreement has not been executed.

ARTICLE 5: TERMINATION OF SERVICES

5.1 Termination by Herakles.

Herakles shall have the following rights to terminate any Accepted Service Agreement and cancel the delivery of Services to Customer:

(a) Non-payment. Herakles may, upon 30 days’ prior written notice, discontinue the Services without incurring any liability if the Customer has a past due balance for the provision of Services.

(b) Violation of law. Any Accepted Service Agreement shall be subject to cancellation, without notice, for any violation of any law, rule, regulation or policy of any government authority having jurisdiction over the Services or by reason of any order or decision of a court or other government authority having jurisdiction over the Services that prohibits Herakles from furnishing such Services to Customer, where such violations are directly related to services.

(c) Other causes. Any Accepted Service Agreement shall be subject to cancellation, upon 30 days’ prior written notice (and only if the reason for such cancellation notice is not remedied by Customer within such period), if Customer breaches the terms and conditions of an Accepted Service Agreement or this Agreement (including the provisions of Herakles’ then current Acceptable Use Policy), if the Customer is engaged in a fraudulent use of the Services, or for any misrepresentation in any Customer Information or other information contained in an Accepted Service Agreement.

(d) Insolvency. Herakles may immediately discontinue or suspend delivery of the Services without incurring any liability by reason of Customer filing for bankruptcy, reorganization, being declared insolvent or failing to discharge any petition therefore within 60 days of such petition being filed.

5.2 Termination Charge. If Herakles discontinues Services pursuant to Section 5.1, in addition to any other remedies it may have pursuant to Article 3 and at law, Herakles shall be entitled to collect any termination charge set forth in an Accepted Service Agreement.

5.3 Resumption of Service. If Herakles has discontinued the Services it shall have the sole discretion to decide the terms, if any, under which it will restore such Services at the request of Customer. Nonrecurring charges shall apply to any restoration of Service.

5.4 Default by Herakles. If Herakles fails to perform or observe any material covenants or obligations, Customer may give Herakles notice of Herakles’ failure and if Herakles does not cure such failure within 30 days after the delivery of such notice (except that if Herakles’ failure cannot reasonably be cured within said 30 day period, this period shall be extended for a reasonable additional time, provided that Herakles commences to cure Herakles’ failure within the 30 day period and proceeds diligently thereafter to effect such cure), such failure shall be deemed grounds for Customer to declare Herakles in default and terminate this Agreement without penalty.

ARTICLE 6: OBLIGATIONS

6.1 Obligations of the Customer. Customer shall be responsible for:

(a) The payment of all charges applicable to the Services including charges incurred as a result of fraud or unauthorized use of the Services, except for fraud perpetrated by Herakles; and

(b) Damage or loss to the Colocation Facility or equipment installed thereon, unless caused by the negligence of Herakles’ employees or agents.

6.2 Securing Equipment.

Customer shall, at its own cost, secure and maintain its equipment located at the Colocation Facility and shall ensure that neither it nor any person accessing the site on behalf of Customer damages any part of the Colocation Facility, the Colocation Area or any equipment located in or around the Colocation Facility, nor shall Customer leave behind any debris or other materials. Customer shall not perform or permit any violation of laws, rules, regulations or ordinances of any governmental agency with respect to the Colocation Facility, and Customer shall not act in any way that is a nuisance to other users of the Colocation Facility or to Herakles. Customer shall ensure that neither it nor any person accessing the site on behalf of Customer permits any explosive, flammable or combustible material or any hazardous or toxic materials, of any manner whatsoever, to be located in or around the Colocation Facility, except in strict compliance with all applicable laws and regulations. Customer shall be responsible for following all security procedures in place at the Colocation Facility and shall be liable for any loss or damage to its or other parties’ equipment due to Customer not following such procedures. If unauthorized parties gain access to the Colocation Facility by using access cards, keys or other access devices provided to Customer by Herakles, Customer shall be responsible for any damages incurred as a result thereof. Customer shall be responsible for the cost of replacing any security devices lost or stolen after delivery thereof to Customer.

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6.3 Waiver of Liability; Indemnification. Herakles and Customer hereby agree that:

(a) Neither party shall be liable to the other party, and each party hereby waives any claim it might have against the other party, for any injury or damage to property in or around the Colocation Facility by or from any cause whatsoever other than due to the negligence (or omission) or willful act of the other part. Customer expressly acknowledges that Herakles shall permit third parties to install equipment at the Colocation Facility, and agrees that Herakles shall not be liable to Customer for any damages, costs, or losses incurred by Customer that are caused by the acts, equipment, or failure to act of such third parties.

(b) Each party agrees to indemnify and hold harmless the other party from any and all claims, suits, or causes of action for damages, including court costs and attorney’s fees, that may arise out of any injury to or death of any person, or any damage to property, or any losses incurred by any person, whenever such injury, death, damage or loss is caused in whole or in part by the acts or omissions of the indemnifying party. The foregoing shall not include, and Customer shall not be responsible or liable for the acts or omissions of any third party, including third party vendors, except where and only to the extent Customer has caused such acts or omissions.

(c) Neither party shall be liable to the other party or anyone claiming under or through the other party for any injury, inconvenience, loss or damage to the other party caused by failure of equipment, or by the malfunctioning or interruption of any service, utility, facility, or installation supplied by the other party, or the owner, principals, employees or agents of each, or any other person, if the failure, malfunction or interruption was beyond the reasonable control of the other party.

(d) In no event shall either party be responsible or liable for any indirect, incidental, special, consequential, or punitive damages of any kind, or damages for loss of profits, revenue, data or use, incurred by either party or any third party, even if the other party has been advised of the possibility of such damages. Except for Herakles indemnification and confidentiality obligations under this Agreement, Herakles’ liability for damages under this Agreement shall in no event exceed 1 million dollars. Except for Customer’s indemnification and confidentiality obligations under this Agreement, Customer’s liability shall not exceed the amount of fees paid by Customer under this Agreement, The provisions of this Agreement allocate the risks between Herakles and Customer. Herakles’ pricing reflects this allocation of risk and the limitation of liability specified herein.

6.4 Disclaimer of Warranties.

Customer hereby acknowledges that Herakles exercises no control whatsoever over the content, accuracy or quality of the information passing through its network or any products ordered by Customer via its network. The Colocation Facility, the Colocation Area, the Services and any information or products obtained by Customer through the Services are provided by Herakles “AS IS” without any warranties whatsoever, express or implied.

EXCEPT AS EXPRESSLY STATED HEREIN, THE WARRANTIES OF MERCHANTABILITY AND FITNESS OF THE COLOCATION FACILITY, THE COLOCATION AREA, THE SERVICES, SUCH INFORMATION AND PRODUCTS FOR A PARTICULAR PURPOSE ARE HEREBY SPECIFICALLY DISCLAIMED.

ARTICLE 7: RESTRICTIONS

7.1 Restrictions. Customer’s use of the Services is subject to the following restrictions:

(a) Customer shall, at all times while using the Services abide by Herakles’ Acceptable Use Policy as established by Herakles and modified from time to time, as well as the Acceptable Use Policies of any other network which Customer may utilize while using the Services. Customer shall indemnify and hold harmless Herakles and its directors, officers, agents and contractors from and against any and all allegations, claims, expenses, including reasonable attorneys’ fees, liability or suits made, threatened or brought in relation to or arising from any violation of the foregoing restrictions. Customer acknowledges receipt of a current copy of Herakles’ Acceptable Use Policy;

(b) Herakles shall have no liability or responsibility for the content of any communications transmitted by Customer or any other party using the Services, and Customer shall hold Herakles harmless for any and all claims, including claims by governmental entities seeking to impose penal sanctions, related to such content.

ARTICLE 8: CONFIDENTIAL INFORMATION

8.1 Disclosures and Use. Either party to the other may disclose confidential Information and all such information constitutes the confidential and proprietary information of the disclosing party. The receiving party shall retain it in strictest confidence and not disclose it to any third party, except as authorized by this Agreement or with the disclosing party’s express written consent. Each party agrees to treat all Confidential Information of the other in the same manner as it treats its own proprietary information, but in no case will either party exercise less than reasonable care.

8.2 Proper Use. Both parties agree:

(a) to use Confidential Information only for the performance of any Accepted Service Agreement or as otherwise expressly allowed by this Agreement;

(b) not to make copies of Confidential Information, in whole or in part, except as otherwise expressly allowed by this Agreement; and

(c) if copies are made of Confidential Information in compliance with the terms hereof, to include on such copies wording stating the confidential nature of such information.

8.3 Exceptions. Each party’s confidentiality obligations hereunder shall not apply to information which:

(a) is already known to the receiving party;

(b) becomes publicly available through no action or inaction of the receiving party;

(c) is lawfully obtained by the receiving party from a third party entitled to release such information and which places no restriction on disclosure, or for which written approval for release has been received from the disclosing party;

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(d) is developed independently by the receiving party without reference to the disclosing party’s Confidential Information; or

(e) the receiving party is required to disclose by law.

8.4 Remedies. Notwithstanding any other provision of this Agreement, the party damaged by a breach of these confidentiality provisions shall be entitled to seek equitable relief to protect its interests, including without limitation, preliminary and permanent injunctive relief. Nothing in this Agreement shall be construed to limit any other remedies available to the damaged party.

8.5 Survival. The provisions of this Article 8 shall survive the termination of any applicable Accepted Service Agreement.

ARTICLE 9: INSURANCE

9.1 Required Coverage. During the Term, Customer shall obtain and keep in force, at Customer’s sole cost and expense, the following:

(a) Standard form personal property insurance insuring all equipment, alterations, fixtures and personal property of any kind for which Customer is legally liable or which Customer has had installed at or around the Colocation Facility, for fire, extended coverage, vandalism, malicious mischief, special extended coverage (“all-risk”) and sprinkler leakage. Such insurance shall be in an amount not less than 100% of the full replacement cost thereof.

(b) Commercial general liability insurance insuring Customer against any and all claims for bodily injury and property damage arising out of this Agreement and Customer’s use, occupancy or maintenance of the Colocation Facility and all areas. Such insurance shall have a combined single limit of not less than $1,000,000 per occurrence with not less than a $2,000,000 aggregate limit. The policy shall list Herakles as an additional insured ( not including any Commercial auto liability). In no event shall the limits of such insurance limit the liability of Customer under this Agreement.

(c) Workers compensation insurance in accordance with statute.

9.2 Waiver of Rights. Deleted

9.3 Certificate of Insurance.

A Certificate of Insurance acceptable to Herakles, LLC shall be delivered to Herakles, LLC by the Commencement Date and annually thereafter at least 30 days prior to the expiration date of the original policy or any renewal thereof.

ARTICLE 10: GENERAL TERMS

10.1 Force Majeure. Neither party shall be liable for any failure of performance of equipment due to causes beyond such party’s reasonable control, including but not limited to: acts of God, fire, flood or other catastrophes, any law, order, regulation, direction, action, or request of any governmental entity or agency, or any civil or military authority, national emergencies, insurrections, riots, wars, unavailability of rights-of-way or materials, or strikes, lock-outs, work stoppages, or other labor difficulties (collectively, a “force majeure”); provided however, that in no event shall such force majeure excuse the Customer from paying for any Services incurred hereunder.

10.2 Assignment. Customer may transfer or assign the Services or the right to the use thereof without the express prior written consent of Herakles, provided that the transferee agrees to be bound by the provisions of any existing Accepted Service Agreement and this Agreement. Unless Herakles otherwise agrees in writing, upon an assignment Customer shall remain liable for all charges due under each Accepted Service Agreement.

10.3 Notices. Any notice given by one party to the other shall be deemed to have been properly given when delivered, if delivered in person, or if sent via facsimile, overnight courier, electronic mail or mail, one business Updated 02/04 day after the sending thereof, provided such notice is addressed:

(i) to Customer at the address given on the Customer Contact Form or

(ii) to Herakles: Contracts Herakles, LLC, 1100 North Market Boulevard, Sacramento, California 95834, (fax: 916-679-0106). Each party shall promptly notify the other of any change to its address listed on any Accepted Service Agreement according to the provisions of this Section 10.3.

10.4 Severability. Any provision of this Agreement which shall prove to be invalid, void or illegal shall in no way affect, impair or invalidate any other provision hereof and the remaining provisions hereof shall remain in full force and effect to the greatest extent permitted by law.

10.5 Rules and Regulations. In addition to complying with the Acceptable Use Policy, Customer and its employees, agents and invitees shall abide by and observe all reasonable rules and regulations established by Herakles for the maintenance and use of the Colocation Facility. Notice of such rules and regulations shall be posted by Herakles or provided by Herakles to Customer; provided, however, that Herakles may periodically amend or supplement the rules and regulations in its reasonable discretion and Customer shall be bound thereby.

10.6 Amendment. This Agreement, including any Accepted Service Agreements executed hereunder, and any tariff applicable to the delivery of Services, constitutes the entire understanding of the parties related to the subject matter hereof. The parties may amend this Agreement at any time, and Customer shall be bound by the amended terms and conditions from the effective date of such amendment. If a conflict arises between this Agreement and any Accepted Service Agreement, the Accepted Service Agreement shall prevail.

10.7 Dispute Resolution; Interpretation. Any controversy or claim arising out of this Agreement (other than Section 8.4) or any Accepted Service Agreement shall be submitted to binding arbitration in accordance with the dispute resolution procedure set forth in this Agreement.

10.8 No Waiver. No failure by either party to enforce any rights hereunder shall constitute a waiver of such right.

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10.9 Time of the Essence. Time is of the essence of this Agreement and of the obligations required hereunder.

10.10 Further Assurances. The parties agree to execute all documents and instruments reasonably required in order to consummate the terms of this Agreement.

10.11 Facsimile. The parties hereto and their respective successors are hereby authorized to rely upon the signatures of each person and entity on this Agreement which are delivered by facsimile as constituting a duly authorized, irrevocable, actual, current delivery of this Agreement with original ink signatures of each person and entity.

10.12 Counterpart. This Agreement may be executed in any number of counterparts and each such counterpart shall be deemed to be an original, but all of which, when taken together, shall constitute one Agreement. The Parties have read the Agreement and agree to be bound by the terms and conditions hereof.

10.13 Attorney’s Fees. In any action, proceeding or arbitration between the parties arising out of this Agreement, any Accepted Service Agreement, or any resulting transaction, the prevailing party shall be entitled to reasonable attorney’s fees and costs.

CUSTOMER:

Legal Name: Brightmail Incorporated

/s/ Illegible on behalf of Mike Irwin

Signature

Mike Irwin

Print Name

CFO

Title

4.13.2004

Date

301 Howard Street

18^th Floor

San Francisco, CA 94105

Address

HERAKLES, LLC

/s/ Cindy Rodoni

Signature

Cindy Rodoni

Print Name

Director of Business Development

Title

April 13, 2004

Date

1100 N. Market Blvd.

Sacramento, CA 95834

Address

Dispute Resolution

The following procedures shall be used to resolve any controversy or claim (“dispute”) as provided in this Agreement. If any of these provisions are determined to be invalid or unenforceable, the remaining provisions shall remain in effect and binding on the parties to the fullest extent permitted by law.

Arbitration

The parties agree that any dispute or claim in law or equity arising between the parties out of this Agreement, any Accepted Service Agreement, or any resulting transaction (other than those where Section 8.4 governs) shall be decided by neutral, binding arbitration. The arbitrator shall be a retired judge or justice, or an attorney with at least 5 years of business and commercial law experience, unless the parties mutually agree to a different arbitrator, who shall render an award in accordance with substantive California law. The parties shall have the right to conduct discovery in accordance with California code of Civil Procedure 1283.05. In all other respects, the arbitration shall be conducted in accordance with Title 9 of Part III of the California Code of Civil Procedure. Judgment on any such arbitration award may be entered in any court having proper jurisdiction. This Agreement and any Accepted Service Updated 02/04 Agreement shall be governed and construed in accordance with the laws of the State of California. No potential arbitrator may serve as arbitrator unless he or she has agreed in writing to abide by and be bound by these procedures. Unless otherwise provided in this Agreement, the arbitrator may not award non-monetary or equitable relief of any sort. The designated arbitrator shall have no power to award (i) damaged inconsistent with this Agreement or (ii) punitive damages or any other damages not measured by the prevailing party’s actual damages, and parties expressly waive their right to obtain such damages in arbitration or in any other forum. In no event, even if any other portion of these provisions is held to be invalid or unenforceable, shall the arbitrator have the power to make an award or impose a remedy that could not be made or imposed by a court deciding the matter in the same jurisdiction. All aspects of the arbitration shall be treated as confidential. Neither the parties nor the arbitrator may disclose the existence, content or results of the arbitration, except to have the award entered as a judgment in any court having jurisdiction. All arbitration proceedings shall take place in Sacramento County, California.

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Herakles, LLC

Data Center

Sacramento, California

Security & Safety Policy

Version 2.3

Copyright 2002 by Herakles, LLC

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Table of Contents

1.0	Purpose & Scope	6
	1.1 Purpose	6
	1.2 Agreement to Comply	6
	1.3 Security Briefing	6
	1.4 Right to Modify	6
2.0	General Information	7
	2.1 Hours of Operation	7
	2.2 Solicitation	7
	2.3 Confidentiality & Non-Disclosure	7
	2.4 Incoming and Outgoing Phone Calls	7
	2.5 Restrooms/Break Room	7
	2.6 Customer Labs	7
	2.7 Conference Rooms	7
	2.8 Smoking Areas	7
	2.9 Parking	7
	2.10 Contraband and Weapons	8
	2.11 Alcohol and Controlled Substances	8
	2.12 Photographic and Video Equipment	8
	2.13 Video/Audio Surveillance	8
	2.14 Tours	8
3.0	Access Policy	9
	3.1 Authorized Access	9
	3.2 Emergency Access	9
	3.3 Unannounced Access	9
	3.4 Escorted Access	10
	3.5 Malfunctions Following Access	10
	3.6 Equipment Transport	10
4.0	Badges and Keys	11
	4.1 General Badge and Key Restrictions and Conditions	11
	4.2 Deactivated, Misplaced or Lost Badges	12
	4.3 Misplaced or Lost Space Access Keys	12
5.0	Access Procedures	13
	5.1 Sign In/Out	13
	5.2 Personal Property	13

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	5.3 Entering Herakles Data Centers	13
6.0	Approved Vendors / Contractors	15
	6.1 Contractors & Vendors	15
	6.2 Proof of Insurance	15
7.0	Restricted Areas	16
	7.1 General	16
	7.2 Personnel Offices	16
	7.3 Telephones/Copiers/Fax Machines	16
8.0	Property Removal Procedures	17
	8.1 General	17
	8.2 Property Passes	17
9.0	Equipment Deliveries and Storage	18
	9.1 Equipment Deliveries	18
	9.2 Storage	18
	9.3 Unpacking & Staging Equipment	18
10.0	Colocation Floor	19
	10.1 Storage of Materials	19
	10.2 Inspections	19
	10.3 Keys (Cabinets, Cages)	19
	10.4 Customer Equipment and Connections	19
11.0	Personal Safety	20
	11.1 Safety First	20
	11.2 Reporting Accidents and Injuries	20
	11.3 In Case Of Fire	20
	11.4 Evacuation Route	21
	11.5 Customer, Visitor, Contractor Misconduct	21
Appendix A — Forms		22
	Data Center Tour Request	23
	Data Center Security Authorization	24
	Data Center Picture ID Badge Request	26
	Data Center Visitor Sign-In / Sign-Out	27
	Data Center Property Pass	28

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Mutual Non-Disclosure Agreement	30
Shipping and Receiving Request	32
Visitor / Contractor Authorization	33
Customer Inventory	35
Key Management Log	36
Customer Receipt and Acceptance	37

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1.0 Purpose & Scope

1.1 Purpose

In order to protect the proprietary interests, safety and security of Herakles staff and its customers. Access and operating guidelines for Herakles Data Centers have been established and are recorded in this document.

Contact a Herakles representative¹ with questions or concerns about a particular facility, policy or procedure.

1.2 Agreement to Comply

Persons accessing the Herakles Data Center agree to comply with security, safety, authentication and inventory processes reasonably presented by Herakles Data, to document access to the Herakles Data Center and are required to provide Picture Identification (ID).

1.3 Security Briefing

A Security Briefing for the Herakles Data Center is provided to each Authorized Person on his or her first visit to a Herakles Data Center. Each Authorized Person is required to acknowledge in writing receipt of a Security Briefing and understanding of the safety, security and operating requirements of the Herakles Data Center.

1.4 Right to Modify

This document summarizes Herakles policies concerning security and safety at Herakles Data Centers.

Herakles reserves the rights to modify, rescind, delete or add to the provisions of this document from time to time at its sole and absolute discretion, the President/CEO must approve all changes, Herakles will attempt to provide customers with notification of changes when they occur. Herakles must provide prior written notice of such changes before changes take effect. The policies contained in this document apply to all customers, contractors, and their representatives.

¹ A Herakles Representative is any employee of HeraklesData

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2.0 General Information

2.1 Hours of Operation

The Herakles Data Center operates 24 hours a day, 365 days per year. Authorized access is available 24x7x365.

2.2 Solicitation

Solicitation by customers for any cause or organization is prohibited. Authorized access is available

Distribution of literature on Herakles, LLC property by customers, their employees, or their representatives is prohibited.

2.3 Confidentiality & Non-Disclosure

Information about the Herakles Data Center facility including equipment, products, management, sales, and customer identities is confidential. Herakles Data Center customer employees, their representatives, and contractors are required to sign a Herakles Data Center Non-disclosure Agreement. A copy of a nondisclosure agreement is included in the appendices of this document.

2.4 Incoming and Outgoing Phone Calls

Incoming and outgoing toll free phone calls can be made from the Herakles Data Center; however, no long distance, collect, or any other calls that incur a cost to the Herakles Data Center are allowed.

2.5 Restrooms/Break Room

Restrooms are provided in the Herakles Data Center.

Consumption of food or drink in the colocation area, and customer labs or equipment staging areas is prohibited.

2.6 Customer Labs

Lab space at Herakles Data Centers is available for use by customers for a fee. Labs are reserved on a first come first served basis. Labs must be reserved forty-eight 48 hours in advance. Contact the Herakles Data Center Receptionist to reserve lab space.

2.7 Conference Rooms

Conference rooms at the Herakles Data Center are available for use by customers. Conference rooms are reserved on a first come first served basis and must be reserved 48 hours in advance. If a conference room is needed for more than 8 hours, additional advance notice is recommended. Contact the Herakles Data Center Receptionist to reserve a Conference Room.

2.8 Smoking Areas

Smoking is not allowed within the facility.

2.9 Parking

Parking areas are provided in the front of the building. Parking at the side and rear of the building is restricted. Do not park in these locations unless instructed to do so by a Herakles representative. Parking is not permitted in front of construction equipment and vehicle areas, loading areas, doors,

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fire accesses, where loading/unloading is underway or where construction, repair or maintenance on the building is being conducted.

Persons desiring an escort to their vehicle should contact a Herakles Data Center Security Officer.

2.10 Contraband and Weapons

Contraband and weapons are prohibited on Herakles Data Center premises. Persons in possession of prohibited items will be escorted to the lobby and will be required to leave the facility immediately. Police will be notified as circumstances dictate, at the discretion of Herakles Data Center management.

At the discretion of Herakles Data Center management, persons evicted for violation of this policy may not be allowed to re-enter a Herakles Data Center.

2.11 Alcohol and Controlled Substances

The use of drugs or alcohol while on Herakles Data Center premises is prohibited. Persons suspected of being under the influence of drugs or alcohol while on the premises will be escorted to the lobby and will be required to leave the facility immediately. Police will be notified as circumstances dictate, at the discretion of Herakles Data Center management.

At the discretion of Herakles Data Center management, persons evicted for violation of this policy may not be allowed to re-enter a Herakles Data Center.

2.12 Photographic and Video Equipment

The use of Photographic Audio and/or Video Equipment on Herakles Data Center premises is prohibited. Herakles representatives may authorize camera usage. Security must have written authorization prior to visit.

Persons observed violating this policy or preparing to record audio or video on Herakles Data Center property will be required to turn over all film and will be escorted to the lobby and will be required to leave the facility immediately. Police will be notified as circumstances dictate, at the discretion of Herakles Data Center management.

At the discretion of Herakles Data Center management, persons evicted for violation of this policy may not be allowed to re-enter a Herakles Data Center.

2.13 Video/Audio Surveillance

To ensure the security and safety of its contents and personnel, the Herakles Data Center is monitored by a surveillance system.

2.14 Tours

Tours of Herakles Data Centers are available by appointment only. Tour requests are submitted using a Tour Request form. A copy of the Tour Request form is included in the Appendix A of this document.

Direct questions or concerns about tours to a Herakles representative.

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3.0 Access Policy

3.1 Authorized Access

Physical access to a Herakles Data Center is granted on a limited basis to Herakles customers that have a current, executed, and countersigned Herakles Agreement to place equipment in the Herakles Data Center.

Customers may designate up to five representatives as “Authorized Persons” for access to the Herakles Data Center facility where their equipment resides. Customers may only designate their employees, consultants or vendors of equipment located in the Herakles Data Center as Authorized Persons.

Facility access is granted to Visitors, Contractors and Vendors when pre-arranged by a customer and Herakles, LLC. Visitors, Contractors and Vendors are provided with a temporary Visitor or Contractor badge that allows limited access to the Herakles Data Center. Requests for access by these individuals must be submitted and approved by an authorized representative of the customer and Herakles, LLC prior to the individual visiting a Herakles Data Center.

Representatives who require only occasional access and are not listed as one of the “Authorized Persons” can be granted access on a Visitor basis. Requests for access by these individuals must be submitted and approved by an authorized representative of the customer and Herakles, LLC prior to the individual visiting a Herakles Data Center.

Before installing equipment in a Herakles Data Center, customers complete the Security Authorization form, creating an Authorized Persons List by supplying Herakles with the names of the individuals authorized to access their equipment. For each person on the Authorized Persons List the customer specifies whether or not they are approved to bring in and remove equipment. Customers also provide the names of individuals that have signature and change authority for their Authorized Persons List. Refer to the sample Security Authorization form contained in Appendix A of this document.

Customers are responsible to notify Herakles of changes to the Authorized Persons List. In all cases, Herakles is not responsible for any claims or actions by former employees or former agents allowed on Herakles ‘s premises due to a lack of notification from the customer to deactivate access for any Authorized Person(s).

3.2 Emergency Access

Thirty (30) minute advance notice to Herakles is required for emergency access to a Herakles Data Center. In emergency or extraordinary circumstances, a customer wishing to have Authorized Persons gain access to the Herakles Data Center shall provide as much notice as is reasonably practicable under the circumstances.

3.3 Unannounced Access

Authorized Persons may not access the Herakles Data Center without prior notice. If an Authorized Person is present at the entrance to the Herakles Data Center and Herakles has not received prior notice, the Authorized Person will be required to wait outside the Herakles Data, Center until confirmation of the visit and approval have been obtained.

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3.4 Escorted Access

Herakles reserves the right to require that a representative of Herakles accompany any person during such time that the person has physical access to the Herakles Data Center.

3.5 Malfunctions Following Access

In the event any equipment, software or facilities in the Herakles Data Center to which an Authorized Person gains access ceases to function properly immediately after any customer-authorized person has had physical access to the Herakles Data Center, (i) such malfunction shall be deemed to be caused by customer, and (ii) Herakles shall not be deemed to be in violation of its obligations under any access, hosting, or maintenance agreements with customer unless the customer can demonstrate by clear and convincing evidence that the malfunction or failure is due to Herakles, LLC actions or inactions.

3.6 Equipment Transport

All equipment implementations are reviewed and approved by Herakles (using its reasonable judgment) before the equipment is brought to the Herakles Data Center, to assure that the configuration will be in compliance with Herakles guidelines, within contracted criteria and that it in no way poses a conflict or physical threat to the Herakles Data Center, Herakles, LLC network or other customer equipment. Customers may only bring equipment into the Data Center that is approved by Herakles, LLC.

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4.0 Badges and Keys

4.1 General Badge and Key Restrictions and Conditions

Badges and space access keys are stored in a secure location within the Herakles Data Center. Badges and keys are issued and returned daily to the Herakles Data Center Security Station.

• Herakles Data Center badges and space access keys are the property of Herakles, LLC

• Only Customer Authorized Persons will be issued badges and keys.

• A representative of the customer, who has signature authority for Herakles Data Center badges and keys, must notify Herakles of changes in the status or a customer employee, temporary employee or contractor designated as an Authorized Person. A Security Authorization form is used for this notification. Refer to the Security Authorization form in Appendix A for required information.

• Each individual requesting access to a Herakles Data Center is required to complete and sign a Badge Request form before a badge is provided and activated. A copy of this form is included in Appendix A of this document.

• Data Center Picture ID badges for customer Authorized Persons are issued on the date customer equipment is installed. This process takes 45 - 60 minutes. Data Center Picture ID badges are available on the next customer visit to the Herakles Data Center.

• Space access keys are initialized the day of the Customer installation at the Herakles Data Center.

• The Customer or Authorized Person must sign the Key Management Log in order to receive the space access key. Refer to the Key Management Log in Appendix A for details.

• Individuals are personally responsible for the badge or space access key issued to them.

• Individuals are prohibited from allowing any other person to use their badge or space access key.

• Badges must be prominently displayed at all times while in the Herakles Data Center facility.

• Individuals are prohibited from allowing or assisting others to enter any door in the Herakles Data Center.

• Access to equipment other than the customer’s own equipment is prohibited. Alteration, damage, or disturbance of other equipment is prohibited.

• The Customer or Authorized Person in possession of the space access key is responsible for ensuring that the cabinet or cage has been secured whenever the individual is absent from the cage or cabinet, and upon leaving the Herakles Data Center.

• Badges and space access keys must be returned to the Herakles Data Center Security Station when exiting the facility or upon demand.

• Any individual who uses an 10 badge or space access key to gain entry into a Herakles facility in violation of any of these listed restrictions or conditions is considered to be trespassing.

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4.2 Deactivated, Misplaced or Lost Badges

Lost ID badges represent a security risk and are handled as follows:

• A Herakles Data Center security officer must be notified immediately if a badge is forgotten, misplaced, lost or stolen.

• Herakles Security validates the current employment status of personnel that have been issued a Data Center Picture ID badge if they are observed in the facility without it.

• For individuals that have lost their badges, their Data Center Picture ID badge is deactivated and the individual is issued a temporary access control card, valid for 24 hours. If the original card is located, the temporary access control card may be returned to Herakles Security, and the original Data Center Picture ID badge will be reactivated. If the original card is not located within 24 hours, the temporary access control card is returned to Herakles Security and the individual is issued a replacement Data Center Picture ID badge. Contact a Herakles representative for information about fees associated with replacing Herakles Data Center Picture ID badges.

4.3 Misplaced or Lost Space Access Keys

Lost space access keys present a security risk and are handled as follows:

• A Herakles Data Center security officer must be notified immediately if a space access key is misplaced, lost or stolen.

• Keys will be considered missing if not returned to the Herakles Security Officer as described in Section 4.1.

• If a space access key is misplaced or lost by the Customer or Authorized Person, Herakles will immediately arrange for re-keying of the cabinet or cage space. Contact a Herakles representative for information about fees associated with re-keying and replacing space access keys.

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5.0 Access Procedures

5.1 Sign In/Out

All personnel except employees permanently assigned to work full time at the Herakles Data Center who are in possession of a Picture ID badge, are required to sign in and out at the Herakles Data Center Security Station using the Sign In/Out form.

Persons signing in or out of the facility must provide all information requested on the Sign In/Out form. Refer to Appendix A for a copy of the Visitor Log Sign-In/Out form.

5.2 Personal Property

Personal property, including equipment (software, tools, etc.) brought into the Herakles Data Center facility, is inspected and inventoried on a Property Pass form upon arrival. The Property Pass is countersigned by a Herakles representative to verify that the individual is authorized to transport equipment.

Personal productivity tools (laptops), will be inventoried on a Property Pass during the initial customer visit to the Data Center. The Property Pass inventorying personal productivity tools will be retained at the Herakles Data Center Security station. Appropriate badging or badge designation will be provided to individuals to allow the use of the personal property while visiting the Herakles Data Center.

A copy of the Property Pass form is retained at the Herakles Data Center Security station. The Security Officer and/or a Herakles representative at the Security Station inspect both the Property Pass and the equipment when the individual leaves the facility. Refer to the copy of the Property Pass form in Appendix A of this document.

5.3 Entering Herakles Data Centers

Both temporary access control cards for visitors and contractors and Data Center Picture ID badges for Authorized Persons are secured at the Herakles Data Center Security Station when the customer is not in the facility. Badges are issued before any person may enter a Herakles Data Center facility. The following is a detailed description of the process:

• The Herakles Security Officer greets the individual and requests their driver’s license for identification. The driver’s license is retained at the Herakles Data Center Security Station until the individual leaves the facility.

• At the request of the Herakles Security Officer, the individual signs the Sign In/Out form in the Herakles Data Center Visitor Log.

• If the Herakles Security Officer is not already in possession of written confirmation that access for the individual has been pre-arranged and authorized by both the Customer and Herakles, LLC, the Security Officer validates that the individual has clearance to enter the facility and obtain access to the requested areas by contacting the customer.

• The Herakles Security Officer ensures that all equipment hand carried into the facility is inspected and inventoried on a Property Pass form. The Property Pass is countersigned by Herakles Command Center team member and a Security Officer to verify the equipment.

• The Herakles security Officer will search all bags, purses and backpacks prior to granting access to the data center. Contraband, weapons and cameras of any kind are prohibited from the property.

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• The Herakles Security Officer issues the customer’s Herakles Data Center Picture ID badge or a temporary Visitor or Contractor badge as applicable.

• A Herakles representative/Security Officer escorts the individual through the bio checkpoint and to the customer cage or cabinet in the colocation area. The Herakles representative may remain with the visitor or contractor depending on the type of clearance given and the existing conditions.

• With the individual present, the Herakles representative unlocks the customer cage or cabinet and logs the action.

• Customers and their representatives enter and leave the colocation area by scanning their badge each time.

• The Herakles Security Officer ensures that all equipment hand carried out of the facility is inspected and inventoried on a Property Pass form. A Herakles representative verifies that the individual is authorized to remove the equipment and countersigns the Property Pass.

• When leaving the facility, customers and their representatives sign the Sign In/Out form in the Herakles Data Center Visitor Log at the Herakles Data Center Security Station and return their badge to the Security Officer. At this time the Security Officer returns their driver’s license to them.

• Also when leaving the facility, customers and their representatives will return space access key(s) to the Herakles Data Center Security Station, and sign the customer Key Management Log.

PRIVATE/PROPRIETARY/LOCK

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6.0 Approved Vendors / Contractors

6.1 Contractors & Vendors

All contractors must be pre-approved before any work may be performed at a Herakles Data Center. The following is a list of requirements needed to complete the approval process:

• Scope of work

• Time line with starting and ending dates

• Proper insurances filed with Herakles (e.g. workmen’s compensation insurance, liability insurance)

• Copy of a current State Contractor’s License

• Copy of a local business license.

• Customers and their representatives enter and leave the colocation area by scanning their badge each time.

6.2 Proof of Insurance

Proof of liability coverage (certificate of insurance), if requested, will be submitted to the Herakles Data Center and maintained on file at the Herakles Data Center location.

Please refer to your Herakles Agreement or a Herakles representative for the levels and types of insurances that are required.

PRIVATE/PROPRIETARY/LOCK

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7.0 Restricted Areas

7.1 General

Customer, vendor, and visitor accesses are restricted areas specifically authorized for their work. Herakles representatives may escort Customers, vendors or Visitors to restricted areas if necessary.

7.2 Personnel Offices

Offices and conference rooms located in the general administrative area are restricted to Herakles Data Center employees assigned to those specific offices.

7.3 Telephones/Copiers/Fax Machines

Telephones, copiers and fax machines have been provided for Herakles Data Center employees. Telephones located in the employee private offices are restricted for use by the employees assigned to those offices. Copy machines and the fax machines in office areas are restricted to Herakles Data Center personnel use only.

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8.0 Property Removal Procedures

8.1 General

Transport or removal of property from the Herakles Data Center without a properly authorized and signed Property Pass form is prohibited. A copy of the Property Pass form is available in Appendix A of this document.

8.2 Property Passes

Herakles Data Center or customer property being removed from the Herakles Data Center facility must be accompanied by the proper paperwork and authorizations. Herakles Data Center property removed from the Herakles Data Center facility must have an authorized Property Pass form signed by an appropriate Herakles representative before removing equipment.

If customer equipment needs to be removed, the individual removing equipment must have a Security Authorization form on file that indicates approval of the individual for equipment removal. After the Herakles Security Officer verifies that this Security Authorization is in place, the individual removing the equipment will complete and sign a Property Pass form. The Herakles Security Officer keeps a copy of the Property Pass at the Herakles Data Center Security Station.

The Herakles Security Officer notifies an appropriate Herakles representative for the customer removing the equipment so that customer records can be updated. The Herakles representative updates inventory logs for the customer to reflect equipment changes.

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9.0 Equipment Deliveries and Storage

9.1 Equipment Deliveries

For security reasons, shipments are received at Herakles Data Centers should be scheduled. Customers are required to fill out a Receiving form prior to the arrival of their shipment at a Herakles Data Center. A copy of this form is included in Appendix A of this document.

The following information must be labeled on all shipments to the Herakles Data Center. Shipments that do not include the correct information will be refused.

Herakles, LLC

c/o (Customer Name)

1100 North Market Blvd.

Sacramento, Ca 95834-1931

Attention: Facilities

Customer Reference #

Shipments must include a packing slip from the sender.

Shipping and Receiving hours are 8 AM-5PM, Monday–Friday local time. Contact your Herakles representative to make arrangements to accept shipments outside these hours.

Customers should be present to take ownership of their shipments when it arrives at Herakles Data Center. Customers that cannot be present to receive a shipment can contact a Herakles representative to make arrangements for Herakles to receive the shipment.

When receiving equipment on behalf of a customer, Herakles accepts the item, secures it in a Shipping Receiving cage and notifies the customer of receipt. Herakles is not responsible for lost or damaged items. Customers are responsible for promptly taking ownership of their shipments.

9.2 Storage

Equipment and materials should be claimed and moved within 48 hours of their arrival. Contact a Herakles representative for information regarding longer storage periods. Lengthy storage periods or unclaimed items will result in a storage fee.

9.3 Unpacking & Staging Equipment

Unpacking of equipment and material should be done within the Shipping and Receiving area for large shipments. A dumpster is provided for disposal of non-hazardous materials. Pallets must be broken down before disposal. Foam pellets and other packing material must be controlled and stored within a container before disposal.

Customers and vendors are responsible for the prompt removal of refuse and all related expenses. This includes removal of all material that is unsuitable or does not fit into the available disposal containers.

An inventory of the equipment moved in or out of the Herakles Data Center is required at the time of the movement, and should be provided to Herakles, LLC representative.

Herakles makes certain equipment available at its data centers for the temporary use by customers. When available, this equipment is provided upon request, on an as is basis without warranties of any kind. Herakles approval is required for the use of all Herakles, LLC-owned equipment and tools. Customers use Herakles equipment, tools and any other property at their own risk.

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10.0 Colocation Floor

10.1 Storage of Materials

Cages, cabinets, and open racks must be kept clean and orderly. Storage of extraneous supplies and equipment in the colocation area is not permitted.

10.2 Inspections

To ensure the safety and security of the Herakles Data Center, its staff and its contents, Data Center personnel routinely inspect customer areas for the following:

• Fire hazards

• Electrical hazards

• Leaking or smoking equipment

• Improper storage of materials and equipment not permitted on site.

10.3 Keys (Cabinets, Cages)

In order to assure the security of the Herakles Data Center and Customer installations, key use is controlled and restricted. See Section 4.3 above for details.

10.4 Customer Equipment and Connections

Customers are required to provide an accurate inventory of equipment including size, type, power requirements and specifications, and heat output using a Customer Inventory form, prior to the installation of their equipment. Refer to the Customer Inventory form in Appendix A of this document.

Customers are required to notify Herakles in advance, before removing equipment or bringing additional equipment into the Herakles Data Center facility.

Customers may not connect or disconnect any equipment except as specifically pre-approved by an authorized employee of Herakles, LLC, at least 48 hours in advance of proposed installation, except as otherwise approved by Herakles, LLC.

All connections from customer equipment to any Herakles equipment must be clearly labeled.

Equipment must be configured and operated at all times in compliance with the manufacturer’s specifications, including clearance and power requirements.

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11.0 Personal Safety

11.1 Safety First

Persons entering a Herakles Data Center must cooperate in promoting a safe environment and prevent accidents by observing the following common sense rules:

• Learn this Security & Safety Policy, and the location of fire alarm boxes, fire extinguishers and exits.

• Do not operate electrical equipment with wet hands.

• Be alert for fire and safety hazards.

• Promptly report unsafe or potentially hazardous conditions to the Herakles Data Center Security Officer. Examples are:

• Wet or slippery floors

• Unattended equipment in hallways or in walkways

• Exposed wiring

• Careless use or misuse of equipment.

11.2 Reporting Accidents and Injuries

All accidents involving a personal injury, regardless of the nature of the injury, must be reported to the Herakles Data Center Security Officer.

If the injury is an emergency, dial 911 and wait for emergency personnel to arrive to assist you.

Filing a false injury claim by stating you were injured while on the Herakles Data Center property when in fact you were not could result in prosecution. Herakles, LLC will pay up to $1,000 reward for information leading to the arrest and conviction of persons filing a false injury report.

11.3 In Case Of Fire

Herakles Data Centers use pre-action, zoned fire suppression. For more information about fire suppression, contact a Herakles representative.

• If you hear an alarm leave the building immediately. Local fire department is dispatched immediately after an audible alarm has sounded. Do not attempt to re-enter the Herakles Data Center building under any circumstances. Let the professional fire fighter and Data Center personnel handle the situation. After the fire department has determined that the situation is clear of danger, Data Center personnel will provide notification that access to the facility is available.

• If you smell smoke or suspect a piece of equipment may generate sparks, smoke or fire, contact Herakles Data Center personnel immediately.

• Portable fire extinguishers are available throughout the Herakles Data Center. For small, contained fires, if time does not allow for contact with Data Center personnel use the portable fire extinguisher.

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11.4 Evacuation Route

Building evacuation routes are described to customers during a Security Briefing that is provided to customers during their initial visit to the Herakles Data Center.

11.5 Customer, Visitor, Contractor Misconduct

Misconduct is prohibited at Herakles Data Centers. It includes but is not limited to the following examples:

• Misuse or abuse of Herakles Data Center property or equipment

• Unauthorized use or interference with property or equipment of any other Herakles Data Center customers

• Harassment of any individual

• Engaging in any activity that is in violation of local, state or federal law, or aiding in criminal activity while on Herakles Data Center property or in connection with the Herakles Data Center Services. Assist or permit persons in engaging in any of the activities described above.

Persons violating this policy will be escorted to the lobby and will be required to leave the Herakles Data Center facility immediately. Police will be notified as circumstances dictate, at the discretion of Herakles Data Center management.

At the discretion of Herakles Data Center management, persons evicted for violation of this policy may not be allowed to re-enter a Herakles Data Center.

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Appendix A — Forms

The following forms are included with this Security and Safety Policy as Appendix A:

• Data Center Tour Request

• Data Center Security Authorization

• Data Center Picture ID Badge Request

• Data Center Visitor Sign-In/Sign-Out

• Data Center Property Pass

• Mutual Non-Disclosure Agreement (NDA)

• Shipping & Receiving Request

• Visitor / Contractor Authorization.

• Customer Inventory

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Herakles, LLC

Data Center Tour Request

Sacramento Data Center Only

Purpose of visit and any special requests relative to content or focus:

Desired Tour Date and Time:

1^st Choice Date: Time: 2^nd Choice Date: Time: 3^rd Choice Date: Time

A minimum of 48 hours notice is required to reserve a tour time, at least one-week advance notice is preferred. Please include all three times slots to facilitate scheduling. Tour cannot begin before 9:00 AM and must start no later than 3:00 PM Monday through Friday.
Name of the Sales Representative accompanying the tour (NOTE: If no Sales representative is present the tour will be cancelled):	Stage of Sales Cycle:
Contact Information for Tour Requestor	Audio Visual Needs: (Check all that are required)
Name:	Overhead:
Phone:	Laptop Connection:
Cell Phone:	Easel:
E-mail:
Client Company Name: (Required Field)
Please provide the full names of all tour attendees so we can prepare ID badges
NAME	NAME
1.	11.
2.	12.
3.	13.
4.	14.
5.	15.
6.	16.
7.	17.
8.	18.
9.	19.
10.	20.

Instructions:

Sales Representatives e-mail or fax this tour request form to: tours@heraklesdata.com or fax to requested is available the Sales Representative will receive an email response confirming the tour: available, the Sales Representative will be contacted by telephone to coordinate another time.

Additional Information:

Data Center tours can be scheduled for any business day, Monday through Friday. A maximum of two tour times are available each day. Tours cannot begin before 9:00 AM and must start no later than 3:00 PM. A sales representative must accompany all tours. There is a limit of 10 guests per tour.

A minimum of 48 hours notice is required to book a tour, at least one-week advance notice is preferred. To add someone to an already booked tour, at least one-hour advance notice is needed to avoid a wait for the required 10 badges. Visitors should be informed in advance by the tour organizer that a picture ID is required for access to the facility and that all visitors will be escorted at all times

Catering:

Herakles can provide information about local catering services. If catering will be used, Sales Representatives must notify Herakles in advance to coordinate access for the catering firm.

Late Arrivals and Cancellations:

Sales Representatives are responsible to contact the Data Center if the tour group is late or the tour is cancelled. Herakles reserves the right to cancel tours if no one arrives within 15 minutes of a scheduled tour time.

The Herakles Data Center management reserves the right to cancel employee tours and other non-sales related tours, to make room for customer ~ales tours. 48 hours notice will be provided if this type of cancellation is necessary.

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Herakles, LLC

Data Center Security Authorization

Customer/Primary Assigned User Contact
Customer Last Name	Customer First Name	Customer Middle Initial	Company Name		Email Address
Authorized Personnel (List up to 5 persons authorized to access the customer racks/cages in the Data Center.)
Authorized Person #1
Last Name	First Name	Middle Initial	Drivers License Number & State of Issue
Email Address		Voice Number		Pager Number
Cell Number		Fax Number		IPS Number
Authorized to Incur Charges?		Yes		No
Authorized to Remove Property?		Yes		No
Authorized to Authorize Others?		Yes		No
Initial Passcode
Authorized Person #2
Last Name	First Name	Middle Initial	Drivers License Number & State of Issue
Email Address		Voice Number		Pager Number
Cell Number		Fax Number		IPS Number
Authorized to Incur Charges?		Yes		No
Authorized to Remove Property?		Yes		No
Authorized to Authorize Others?		Yes		No
Initial Passcode
Authorized Person #3
Last Name	First Name	Middle Initial	Drivers License Number & State of Issue
Email Address		Voice Number		Pager Number
Cell Number		Fax Number		IPS Number
Authorized to Incur Charges?		Yes		No
Authorized to Remove Property?		Yes		No
Authorized to Authorize Others?		Yes		No
Initial Passcode
Authorized Person #4
Last Name	First Name	Middle Initial	Drivers License Number & State of Issue
Email Address		Voice Number		Pager Number
Cell Number		Fax Number		IPS Number

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Authorized to Incur Charges?		Yes		No
Authorized to Remove Property?		Yes		No
Authorized to Authorize Others?		Yes		No
Initial Passcode
Authorized Person #5
Last Name	First Name	Middle Initial	Drivers License Number & State of Issue
Email Address		Voice Number		Pager Number
Cell Number		Fax Number		IPS Number
Authorized to Incur Charges?		Yes		No
Authorized to Remove Property?		Yes		No
Authorized to Authorize Others?		Yes		No
Initial Passcode

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Herakles, LLC

Data Center Picture ID Badge Request

Customer Information
Today’s Date:	Facility Location:						Listed on Security Authorization Form: YES ¨ NO ¨
Company Name:				Assigned User Name:
Company Address:				City/State:				Zip Code:
Telephone:	Fax Number:					Supervisor’s Name:
Facility Information
Today’s Date:		Card ID Number:					System Log Number:
Issued To:					Drivers License Number & State of Issue:
Address:					City/State:			Zip Code:
Daytime Phone Number:		Evening Phone Number:					Cell Phone Number:
E-Mail Address:							Pager Number:
Card Issued By:			Signature:					Date Issued:
Assigned User Signature:							Date Received:
Bio Read By:			Signature:					Date Bio Read:
Assigned User Signature:							Date Received:

By signing above, the Assigned User acknowledges that he/she will be the sole user of the requested Herakles, LLC Data Center Picture ID Badge. All damage and/or theft resulting from misuse or sharing of a Data Center Picture ID Badge is the responsibility of the above Assigned User.

By signing above, the Assigned User agrees to notify Herakles, LLC immediately of any lost, stolen or damaged Data Center Picture ID Badge.

Herakles, LLC Data Center Picture ID Badges must be returned to the Herakles Data Center Security Station before the Assigned User leaves the Herakles Data Center.

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Herakles, LLC

Data Center Visitor Sign-In / Sign-Out

Company

Date

Drivers License#

Purpose of Visit

Time

Badge#

Estimated Time Onsite

Equipment

Property Pass #

Signature

Name (Print)

IN

OUT

IN (Yes/No)

OUT (Yes/No)

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Herakles, LLC

Data Center Property Pass

Date: Pass Number:

Ensure that all information is printed in the appropriate areas. If no information is available for an item write N/A (not available). A Herakles representative must approve all equipment leaving the Herakles Data Center. Discrepancies will be noted in the comment section and reported to Herakles Security immediately. Discrepancies must be resolved prior to property entering or leaving the center.

Customer Name:                                      Company Name:                                      CIN #                                     

Item Description Quantity Serial # In
Out
Herakles Verification

The above described property was signed IN at:                                           Customer Signature:	on:                                           Security Officer Signature
The above described property was signed OUT at:                                      Customer Signature:	on:                                           Security Officer Signature

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Note: One copy of property pass must accompany the customer. One copy of property pass must be filed with Herakles Security before any property can be removed or brought into the site.

Comments:

If property is being returned from or transported to a different site/allocation, this information must be noted in the comments section above and must include the name of the authorizing person as well as the address/location where the property originated or is being transported to.

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Herakles, LLC

Mutual Non-Disclosure Agreement

This Mutual Non-Disclosure Agreement (the “Agreement”) is entered into and made effective as of                      between Herakles, LLC and                      to assure the protection and preservation of the confidential and/or proprietary nature of information to be disclosed or made available to each other in connection with certain negotiations or discussions further described hereto.

The parties agree as follows:

1. Subject to the limitations set forth in Paragraph (2), all information to the other party shall be deemed to be “Proprietary Information.” In particular, Proprietary Information shall be deemed to include, but not be limited to, any trade secret, information, process, techniques, algorithm, computer program (source and object code), design, drawing, formula or test data relating to any research project, work in progress, future development, engineering, manufacturing, marketing, servicing, financing or personal matter relating to the disclosing party, its present or future products, sales, suppliers, clients, customers, employees, investors, or business, whether in oral, written, graphic or electronic form. If Proprietary Information is disclosed in oral form, the disclosing party shall thereafter summarize it in writing and transmit it to the other party within (5) five days of the oral disclosure.

2. The term “Proprietary Information” shall not be deemed to include information which: (a) is now, or hereafter becomes, through no act on the part of the receiving party, generally known or available to the public; (b) is known by the receiving party at the time of receiving such information as evidenced by its records; (c) is hereafter furnished to the receiving party by a third party, as a matter of right and without restriction on disclosure; (c) is independently developed by the receiving party without any breach of this Agreement; or (e) is the subject of a written permission to disclose provided by the disclosing party.

3. Each party shall maintain all Proprietary Information in trust and confidence and shall not disclose to any third party or use any Proprietary Information for any unauthorized purpose or without the either party’s express written consent. Each party may use such Proprietary Information only to the extent required to accomplish the purposes of this Agreement asset forth hereto. Proprietary Information shall not be used for any purpose or in any manner that would constitute a violation of any laws or regulations, including without limitation to the export control laws of the United States. No rights or licenses to trademarks, inventions, copyrights or patents are implied or granted under this Agreement and no Proprietary Information shall be reproduced in any form except as required under this Agreement.

4. Each party to this Agreement shall advise its employees who might have access to Proprietary Information as to the confidential nature thereof and agrees that its employees shall be bound by the terms of this Agreement. No Proprietary Information shall be disclosed to any employee who does not have a need for such information.

5. All Proprietary Information (including all copies) shall remain the property of the disclosing party and shall be returned to the disclosing party after the receiving party’s need for it has expired, or at anytime, upon the request of the disclosing party, and in any event, upon completion or termination of this Agreement.

6. Not withstanding any other provision of this Agreement, disclosure of Proprietary Information shall not be precluded if such disclosure:

a. is in response to a valid order of a court or other governmental body of the United States or any political subdivision thereof; provided, however, that the responding party shall first have given notice to the other party hereto and shall have made a reasonable effort to obtain a protective order requiring that the Proprietary Information so disclosed be used only for the purposes for which the order was issued;

b. is otherwise required by law; or

c. is otherwise necessary to establish rights or enforce obligations under this Agreement, but only to the extent that any such disclosure is necessary.

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7. This Agreement shall continue in full force and effect for as long as the parties continue to exchange Proprietary Information. This Agreement may be terminated by either party at anytime upon (3) thirty days of written notice to the other party. The termination of this Agreement shall not relieve either party of the obligations imposed by paragraphs 3, 4, 5 and 11 of this Agreement with respect to Proprietary Information disclosed prior to the effective date of such termination and the provisions of those paragraphs shall survive the termination of this Agreement for a period of (5) five years from the date of such termination.

8. This Agreement shall be governed by the laws of the State of California, excluding its conflicts of law principles.

9. This Agreement hereto contains the final, complete and exclusive Agreement of the parties relative to the subject matter hereof and supersedes all prior and contemporaneous understandings and Agreements relating to its subject matter. This Agreement may not be changed, modified, amended or supplemented (except in writing signed by both parties.

10. Each party hereby acknowledges and agrees that if either party breaches this Agreement, including without limitation, the actual or threatened disclosure or unauthorized use of disclosing party’s Proprietary Information without prior express written consent of the disclosing party, the disclosing party will suffer an irreparable injury, such that no remedy at law will afford it adequate protection against, or compensation for, such injury. Accordingly, each party hereby agrees that the other party shall be entitled to specific performance of the receiving party’s obligations under this Agreement, as well as such further relief as may be granted by a court of competent jurisdiction.

11. The parties’ rights and obligations under this Agreement will bind and inure to the benefit of their respective successors, heirs, executors, and administrators and permitted assigns.

12. If any provision of this Agreement is found by a proper authority to be unenforceable, that provision shall be severed and the remainder of this Agreement will continue in full force and effect.

13. Any notice required or permitted hereunder shall be given to the appropriate party at the address specified below or at such other address as the party shall specify in writing. Such notice shall be deemed given upon the personal delivery, or sent by certified or registered mail, postage pre-paid, three days after the date of mailing.

Herakles, LLC
By:	By:
Name:	Name
Title:	Title:
Address:	Address:
Date:	Date:

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Herakles

Receiving Log

Shipper # of pieces To Location Stored
Person Notified
Received By

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Herakles, LLC

Visitor / Contractor Authorization

Customer/Primary Contact
Customer Last Name	Customer First Name	Customer Middle Initial		Company Name		Email Address
Authorized Personnel (List up to 5 persons authorized to access the customer racks/cages in the Data Center.)
Authorized Person #1
Last Name	First Name	Middle Initial	Drivers License Number & State of Issue
Email Address		Voice Number	Pager Number
Cell Number		Fax Number	Supervisor Name:
Company Name:
Company Street Address:
Company City, State, Zip:
Authorized to Remove Property? Yes    No		Authorized to Incur Charges: Yes    No			Authorized to Authorize Others? Yes    No
Authorized Person #2
Last Name	First Name	Middle Initial	Drivers License Number & State of Issue
Email Address		Voice Number	Pager Number
Cell Number		Fax Number	Supervisor Name:
Company Name:
Company Street Address:
Company City, State, Zip:
Authorized to Remove Property? Yes    No		Authorized to Incur Charges: Yes    No			Authorized to Authorize Others? Yes    No
Authorized Person #3
Last Name	First Name	Middle Initial	Drivers License Number & State of Issue
Email Address		Voice Number	Pager Number
Cell Number		Fax Number	Supervisor Name:
Company Name:
Company Street Address:
Company City, State, Zip:
Authorized to Remove Property? Yes    No		Authorized to Incur Charges: Yes    No			Authorized to Authorize Others? Yes    No
Authorized Person #4
Last Name	First Name	Middle Initial	Drivers License Number & State of Issue

PRIVATE/PROPRIETARY/LOCK

No disclosure outside Herakles except by written agreement.

Only the electronic version of this document is controlled.

Page 33

SAMPLE

Herakles, llc

Email Address		Voice Number		Pager Number
Cell Number		Fax Number		Supervisor Name:
Company Name:
Company Street Address:
Company City, State, Zip:
Authorized to Remove Property? Yes    No		Authorized to Incur Charges: Yes    No		Authorized to Authorize Others? Yes    No
Authorized Person #5
Last Name	First Name	Middle Initial	Drivers License Number & State of Issue
Email Address		Voice Number		Pager Number
Cell Number		Fax Number		Supervisor Name:
Company Name:
Company Street Address:
Company City, State, Zip:
Authorized to Remove Property? Yes    No		Authorized to Incur Charges: Yes    No		Authorized to Authorize Others? Yes    No

PRIVATE/PROPRIETARY/LOCK

No disclosure outside Herakles except by written agreement.

Only the electronic version of this document is controlled.

Page 34

SAMPLE

Herakles, llc

Herakles, LLC

Customer Inventory Page              of             

Customer Information
Today’s Date:		Facility Location:	Listed on Security Authorization Form:         YES ¨ NO ¨
Company Name:		Company Representative Name / Signature:
Company Address:			City/State:		Zip Code:
Telephone:	Fax Number:			Supervisor’s Name:
Herakles Representative Name and Title:				Herakles Representative Signature:

Inventory
Item No.	Item Description	Vendor	Model	Serial/Asset No.:	Power Rating (Watts & Amps):

Use additional pages for more inventory. All computing equipment (terminals, workstations, servers) and communications equipment (routers, bridges, switches, gateways) should be inventoried. Please also include peripheral equipment that belongs to you.

PRIVATE/PROPRIETARY/LOCK

No disclosure outside Herakles except by written agreement.

Only the electronic version of this document is controlled.

Page 35

SAMPLE

Herakles, llc

Herakles, LLC

Key Management Log

Customer Name:                     

Log Start Date:             /            /              End Date:             /            /             

Name (Print) Date
Time Out
Key !D#
Signature
Check Out By
Time In
Signature
Checked in By

Cabinet and cage keys are provided to customers and their authorized representatives for their use during visits to the Herakles Data Center. By signing this form your acknowledge that you are governed to by the procedures in the “Herakles, LLC Data Center Security & Safety Policy”.

PRIVATE/PROPRIETARY/LOCK

No disclosure outside Herakles except by written agreement.

Only the electronic version of this document is controlled.

Page 36

Herakles, llc

Customer Receipt and Acceptance

Herakles, LLC

Customer Receipt and Acceptance

I acknowledge that I have received a copy of the Herakles, LLC “Security and Safety Policy”. I also acknowledge that I am required to become familiar with the contents of this document and with the contents of other Herakles, LLC policies and procedures.

I will observe and abide by all current, amended and additional policies, rules, and regulations that appear in the “Security and Safety Policy” and notices that are subsequently provided to me.

I acknowledge that Herakles, LLC may add, modify, or rescind any policies practices or benefits described in this “Security and Safety Policy”.

Name / Title

(Please Print)                                                                                                                         

Signature                                                                                                                               

Date                                                                                                                                       

Please sign and return to the following address:

Herakles, LLC

1100 North Market Blvd.

Sacramento, CA 95834

Attention: Production Control

PRIVATE/PROPRIETARY/LOCK

No disclosure outside Herakles except by written agreement.

Only the electronic version of this document is controlled.

Page 37

EXHIBIT A

HERAKLES, llc

Accepted Service Agreement: Commencement Date: Term: Brightmail June 1, 2004 36 Months

INTERNET ACCESS – general information

Throttled bandwidth caps a customer at their chosen capacity level and represents a fixed monthly cost. Burstable bandwidth allows customers to instantly scale up to higher capacity on demand. The billing level for burstable customers is the peak level of 95% of usage samples for the month (the top 5% of usage levels are not counted). All Setup charges are non-refundable.

	MRC		INSTALL FEE
A. Services	$	2,400	$	9,040
•      10 x 15 cage with 4’ secure gate •      Twenty-four (24) 20a/120v rated circuits * •      Two (2) 30a/240v rated electrical circuits* •      Two (2) 2-post racks •      Two (2) 4-post racks

Metered electric power cost will be added to customer’s base cost of $2,400 each month.

Notes:

1) Includes 1^ST right of refusal on adjacent 10 x 15 cage. Herakles is obligated to present to Brightmail any bona fide offer from a third party for the space adjacent to Brightmail’s existing space, a 10 x 15 cage, which offer Herakles desires to accept, and the Herakles shall promptly deliver to Brightmail a copy of such offer and Brightmail may, within thirty (30) days thereafter, elect to use such premises on the same terms as those set forth in such offer. Brightmail has the right of first refusal by matching the deal and preempting the third party.

2) Termination for convenience after 1^ST year with 30 days notice

3) All provisions which reference Internet and IP services are not applicable. Also, Exhibits C, D and the network availability references in Exhibit E are not applicable.

4) Brightmail and/or a designated third party, may begin installation within 5 business days from date of contract execution, at no charge providing Herakles receives floor layout and electrical circuit locations. MRC to commence June 1, 2004. Install fee may be amortized over three months commencing June 1, 2004. Storage is extended to 5 business days. Customer may connect or disconnect their equipment at any time without prior notice to Herakles.

B.

Additional options available (not included above):	MRC		Install fee
2-post rack		—	$	200
4-post rack		—	$	500
Additional 20 amp circuit	$	200	$	395
Additional 30 amp circuit	$	300	$	495
Per cross-connect	$	20	$	200
IP addresses - 16 block increments	$	10		—
Power strip	$	0	$	100
Bandwidth - Per mbps	$	100	$	0
Engineering services available at $90 per hour.

C. The following services are included in the Services at no charge:

1.	Remote troubleshooting of customer network circuits and equipment.
	Rebooting of Customer equipment (requires a password). Loading of Operating System Updates and software patches.

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	Technical support through our engineering staff (staff may be offsite).
	Connectivity troubleshooting help using Ping and Traceroute.
2.	Monitoring
	Daily visual inspections of customer area and equipment
	Equipment temperature is monitored weekly.
	Power consumption monitoring to assure that circuits are not above maximum utilization.
3.	Periodic tape rotation services
4.	Trouble Ticketing

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EXHIBIT B

Herakles Customer Installation Specifications

(Exhibit B to Herakles, LLC Terms & Conditions)

Power:

• The usable amperage off all electrical circuits will be 80% of the Rated amperage on the breaker (i.e. 20 Amp breaker 16 amps (80%) usable).

• Power strips may not plugged into other power strips, this is a direct violation of local fire codes

• Extension cords are not allowed.

• Herakles will perform periodic audits to ensure there are no violations

Housekeeping:

• Any shipments that are received by Herakles will be stored in the Shipping and Receiving cages. All equipment will be unpacked in the Shipping and Receiving area and then moved to the customer location and all packaging will be disposed of properly.

• If the shipment is too large to unpack in the Shipping and Receiving area it may be unpacked at the customers location but all cardboard and packaging must be removed immediately.

• Combustibles are not allowed to remain in the Rack/Cage area.

Environmental:

• Herakles will determine the layout of all racks and cabinets and establish the direction that the customer equipment will be installed. This is done to insure proper cooling of customer equipment.

• Equipment that is too large to be rack mountable and is placed on the floor will be treated as an additional rack.

• Herakles will control the location of perforated floor tiles used for cooling purposes.

• Customers will not be permitted to remove or relocate floor tiles. Customers are not permitted under the raised floor.

• Herakles will perform periodic temperature audits to insure proper cooling of customer equipment.

Additional Equipment:

• Any additional equipment to be installed after the initial installation phase must be jointly approved by the customer and Herakles.

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EXHIBIT C

Herakles Acceptable Use Policy

(Exhibit C to Herakles, LLC Terms & Conditions)

Introduction

Herakles, LLC’s Acceptable Use Policy (“AUP”) for Herakles, LLC’s products and services is designed to help protect Herakles, Herakles’ customers, and the Internet community in general from fraud, abuse of resources, and irresponsible or illegal activities.

Herakles makes no guarantee regarding, and assumes no liability for the security and integrity of, any data or information a User transmits via the Service or over the Internet, including any data information transmitted via any server designated as “secure.”

As an Internet Service Provider, it is not practical for Herakles to monitor the content of information passing through its network. Herakles exercises no control whatsoever over the content of any information passing through its network and is not responsible for damages customers may suffer for any reason. Any persons or organizations, including Herakles customers, who publish material or information made accessible through Herakles networks are solely responsible for the content of such material and information, and are solely responsible to know and comply with the laws applicable to the publication of such materials and information. Herakles will cooperate with legal authorities in the investigation of any suspected criminal or civil infringements.

Customer Responsibilities

Herakles’ services are intended solely for the use of the contract holder and its corporate affiliates and/or subsidiaries that are connected by LAN, WAN or remote access applications, and may not be re-sold to or used by any outside entity without prior written consent from Herakles.

Each Herakles customer is responsible for the activities of its customer base or end-users and, by accepting service from Herakles agrees to inform its customers and/or end-users of this AUP or its own Acceptable Use Policy, which must not be inconsistent with the terms herein.

Prohibited Conduct

Herakles services are only to be used for lawful purposes. Customers may not transmit, retransmit or store material in violation of any federal or state laws or regulations, including, but not limited to, obscenity, indecency, defamation or material infringing trademarks or copyrights. Herakles customers may not abuse or fraudulently use Herakles products and services, nor allow nor permit such use by others. The following activities illustrate some, but not all, prohibited uses under this AUP:

Child Pornography: It is illegal under Federal child exploitation statutes to possess, produce, receive, transport or distribute by any means, including computer, visual depictions of “sexual intercourse” and/or “sexually explicit conduct” involving children.

Denial of Service: Engaging in any activity that will interfere or attempt to interfere with the service of any other user, host or network on the Internet.

Distribution of Viruses: Intentional distribution of software that attempts to and/or causes damage or annoyance to persons, data, and/or computer systems.

Forging Headers: Forging or misrepresenting any message header, in part or whole, of any electronic transmission, originating or passing through the Herakles network.

Email Spamming or Mail bombing: The transmitting of unsolicited Email to multiple recipients, sending large amounts of Email repeatedly to a person to harass or threaten, or any attempt to use Herakles servers as a mail drop or name server for SPAM. Sending unsolicited bulk Email from another Internet service provider’s network advertising or implicating any service hosted or provided by Herakles, including without limitation Email, web, FTP and DNS services.

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EXHIBIT C

Herakles Acceptable Use Policy

(Exhibit C to Herakles, LLC Terms & Conditions)

Fraudulent Activities: Fraud is an intentional misrepresentation or misleading statement, writing or activity made with the intent that the person receiving it will act upon it, or, obtaining or attempting to obtain service by any means or device with intent to avoid payment.

Illegal or Unauthorized Access to Other Computers, Accounts, or Networks: Accessing, or attempting to access, any computer resource belonging to another party, or attempting to penetrate security measures of other systems, whether or not the intrusion results in corruption or loss of data.

Network Sabotage: Any use of Herakles’ products and services to interfere with the use of Internet resources or the Herakles network by other customers or end-users.

Pyramid Schemes: A fraudulent system of achieving financial gain, which requires an endless stream of recruits for success.

Unlawful Acts: Any use of Herakles’ products and services to violate the law or in aid of any unlawful act.

Usenet Spamming: Posting of messages to newsgroups that are irrelevant, blanket posting of messages to multiple newsgroups, and the posting of harassing and/or threatening messages.

Facilitating a Violation of this AUP: Advertising, transmitting, or otherwise making available any software, program, product, or service that is designed to violate this AUP which includes, but is not limited to, the facilitation of the means to spam, initiation of pinging, flooding, mail bombing, denial of service attacks, and piracy of software.

Violations and Enforcement

At Herakles’ sole discretion, violations of any element of this AUP may result in a warning to the offender followed by suspension or termination of service if the customer does not cease the violation. If Herakles deems it necessary or prudent, it may immediately suspend or terminate service with or without notice if Herakles determines that a violation of the AUP has occurred. Herakles will enforce this AUP according to the severity of the offense and violator’s history of prior AUP infringements. Repeated offenses will result in immediate termination of service. Herakles is not liable for any damages of any nature suffered by any customer, user, or any third party resulting in whole or in part from Herakles exercising its rights under this AUP. Herakles has no practical ability to monitor all conduct, communications, or content that might violate this AUP prior to its transmission over the Herakles network but may do so at its discretion. Therefore, Herakles does not assume liability for any party’s violation of the AUP or failure to terminate a customer’s violation.

*Herakles, LLC reserves the right to modify this AUP at any time without prior notification to customers.

To report an Abuse, please e-mail: cco@heraklesdata.com

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EXHIBIT D

Herakles IP Address Policy

(Exhibit D to Herakles, LLC Terms & Conditions)

Introduction and Overview

IP address space is a limited resource that is being depleted at a significant rate. Several registries have been established around the world to regulate the usage of these addresses. The Internet Community governs these registries. In the United States, the American Registry governs us for Internet Numbers (ARIN).

ARIN typically only provides addresses in /19 blocks (8192 individual addresses, or 32 Class Cs) or more, most companies need to contact their upstream provider, in this case Herakles, LLC. In order for Herakles, LLC to acquire address space from ARIN, we must follow their guidelines for IP address assignments and allocations and must enforce efficient utilization of IP addresses. This means that our customers must justify their IP needs to us in detail and according to ARIN’s guidelines for effective usage.

ARIN’s policies can be found on their website. Links to the ARIN website are at the bottom of the page.

All information disclosed to Herakles, LLC during this process is confidential, with a single exception, we are required to provide ARIN with the same information you provide to us in order to justify our need for additional address space.

All numbers must be accounted for, and each address block must be reassigned via SWIP, RWHOIS or internal databases. Large address consumers will also be required to maintain, and provide upon request, a database of how addresses are assigned internally.

Guidelines and Rules

• Herakles, LLC will not provide aggregate allocations larger than can be justified by the customer’s need.

• Herakles, LLC will not provide allocations or assignments to customers who already have a direct allocation from ARIN.

• A usage figure of 80 percent must be achieved within 90 days after allocation/assignment, or the addresses will be withdrawn. (Eighty percent usage is based on SWIP records and a simple ICMP scan run against all assigned net blocks.)

• Customers will not be given address space for administrative convenience.

• Herakles, LLC cannot guarantee the assignment of contiguous blocks.

• We reserve the right to change customer assignments/allocations as necessary. ARIN Links

.ARIN Links

• ARIN – Official Website

• Official ARIN Policies

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EXHIBIT E

Herakles Service Level Agreement (SLA)

(Exhibit E to Herakles, LLC Terms & Conditions)

Herakles defines Service Levels to demonstrate its commitment to outstanding customer service and satisfaction.

Service	Description	Service Level
Physical Security	•        Controlled access •        Facility entrance/egress •        Photo ID key-card access •        Biometric sensors •        Colocation areas •        Managed key control of cages & cabinets •        Surveillance •        On-site security professionals •        Internal and external video surveillance •        30-day rolling surveillance record keeping and even triggered surveillance archiving	•        24/7/365 facility access for pre-authorized customer representatives •        24/7/365 on-site security professionals •        Mandatory pre-approved Client lists •        New access issued within 48 hours (Mon-Fri) •        Same day/on demand access deletions
Environment	•        Controlled environmental conditions / temperature & humidity •        N+1 redundant data grade HVAC •        Scheduled testing and preventive maintenance of all environmental controls and systems.	•        24/7/365 integrated environmental monitoring •        Temperature: 65 to 77 degrees Fahrenheit •        Humidity: 40 to 60 percent relative humidity
Power Availability	•        N+1 redundant power •        Active UPS •        N+1 generator power plant •        48-hour supply of fuel onsite •        Contracted fuel suppliers available on-call 24/7/365 •        100% redundant parallel UPS systems •        Automatic static bypass connected to common distribution and isolated bus •        Powered from dedicated power utility step-down transformer •        Scheduled testing and preventive maintenance of all power distribution and supply systems	•        99.999% power availability, 24/7/365
Fire Detection & Suppression	•        State-of-the-art fire detection and suppression systems throughout each facility •        VESDA smoke detection •        Multi-zoned dry pipe sprinkler systems •        Scheduled testing and preventive maintenance of all fire detection & suppression systems •        24/7/365 monitoring of fire detection & suppression systems	•        24X365 monitoring of the detection & suppression systems
Network Availability	High capacity, redundant infrastructure using diverse major carriers for maximum reliability	•        99.999% primary network availability 24/7/365 •        99.5% back-up network availability, 24/7/365

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EXHIBIT E

Herakles Service Level Agreement (SLA)

(Exhibit E to Herakles, LLC Terms & Conditions)

Scheduled Maintenance (data center infrastructure)

Herakles Scheduled Maintenance

Herakles Management performs Scheduled Maintenance to make improvements to network, infrastructure and data centers. Herakles makes every effort to prevent disruptions in service by performing scheduled maintenance during low traffic periods. Herakles provides notice to customers at least 48 hours in advance of maintenance activities that occur outside the Standard Scheduled Maintenance times, so that they are able to make any necessary preparations or notifications.

Herakles Standard Scheduled Maintenance

12:01 am through 8:00 am Saturday and/or Sunday, PST, Pacific Time

Herakles Scheduled Maintenance is excluded from Service Level Agreements and is defined as:

• Any maintenance for which customers receive 48 hours advance notice

• Maintenance performed during a recurring Herakles standard scheduled maintenance window

Notice of Herakles standard scheduled maintenance is provided to customer’s designated point of contact by one or more methods elected by Herakles.

Customer Scheduled Maintenance

Herakles requires advance notice from customers regarding the details and schedule of changes that customers or their authorized representatives plan to make to systems that are hosted within the Herakles facility. Customers are also required to notify Herakles upon completion of Customer Maintenance activities to trigger the resumption of Herakles services for the customer equipment. Herakles SLA does not apply to Customer Maintenance. If the customer wants to request Herakles staff for assistance during Customer Scheduled Maintenance, Herakles requires advance notice of the Customer Scheduled Maintenance window.

Incident Management

Herakles Management provides incident management notification, escalation and resolution support for customer contracted services and in support of Service Levels listed in customer Service Level Agreements.

Incident Notification - Herakles notifies registered customer-designated contact according to the established Herakles Incident Management and Communication Guidelines (the “Communication Guidelines”). The Communication Guidelines are based upon the priority level attached to each incident. Herakles repeats contact attempts and initiates escalation to voice and pager contacts until a response is received.

Herakles’ SLA does not apply if customer does not allow Herakles to monitor customers nodes.

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EXHIBIT E

Herakles Service Level Agreement (SLA)

(Exhibit E to Herakles, LLC Terms & Conditions)

Ongoing Notification - Herakles provides ongoing updates as to the status of resolution efforts according to the established Herakles Incident Management and Communication Guidelines, which are based on the priority level assigned to each incident.

3^rd Party Provider Notification - Herakles initiates contact with 3^rd parties to manage resolution efforts based on the priority level assigned to each incident. Herakles’ Incident Management and Communications Guidelines provide detailed information regarding priority codes and definitions, communication content, contacts and Herakles’ incident notification escalation guidelines.

Network Performance Guarantees

Customers of Herakles Managed Internet Service (MIS) are provided guarantees of network availability, network delay, network packet loss and provisioning intervals, subject to the Program Rules and Regulations set forth below. If (1) an MIS customer experiences any number of Network Outages which together are in excess of .01% of the time in any calendar month (“Service Availability”), the customer will be eligible for a credit of one day’s worth (1/30th) of the customer’s total monthly connection charge for the MIS Service, subject to the maximums specified below in the Programs Rules and Regulations. In addition, if (2) an MIS customer experiences any continuous Network Outages of ten (10) minutes or more in any calendar day (“Network Availability”), the customer will be eligible for a credit of one day’s worth (1/30th) of the customer’s total monthly connection charge for the MIS Service for each such incident, subject to the maximums specified below in the Programs Rules and Regulations.

Program Rules and Regulations:

A “Network Outage” is defined as any occurrence resulting in the inability of the Backbone to transmit IP packets on behalf of the customer. A “Network Outage” does not include an outage for scheduled periods of maintenance or upgrades.

In any Calendar day, customers may receive a maximum of one credit with respect to any particular site for the Network Availability Guarantee.

In any calendar year, customer’s aggregated credits with respect to any particular site may not exceed one month’s charge for the MIS Service.

Herakles’ SLA does not apply if customer does not allow Herakles to monitor customers nodes.

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EXHIBIT E

Herakles Service Level Agreement (SLA)

(Exhibit E to Herakles, LLC Terms & Conditions)

Herakles Incident Management and Communication Guidelines

Priority	Definition / Description	Initial Communication	Recurring Communication	Communication Content	Audience & Primary Contact Method
1	Service Unavailable OR Issue has been at Priority 2 status for more than 72 hours.	Herakles provides notification within 15 minutes of a confirmed outage	Herakles provides status updates hourly on a 24x365 basis for the duration of the outage.
2	Service Severely Impacted OR Issue has been at Priority 3 status for more than 7 days	Herakles provides notification within 30 minutes of a confirmed outage	Herakles provides status updates every 4 hours on a 24x365 basis for the duration of the outage.	Current Status	Customer choice of voice or email to current Address or number on file with CCO
3	Service Degraded but available OR issue has been at Priority 4 status for more than 14 days	Herakles provides notification within 60 minutes of a confirmed outage	Herakles provides status updates every 12 hours on a 24x365 basis for the duration of the outage	Estimated Resolution Time	Herakles CCO (Command Center Operations) and Engineering
4	Service Impacted or degraded but workaround is available to fully mitigate impact	Herakles provides notification within 12 hours of a confirmed outage	Herakles provides status updates every 24 hours on a 24x365 basis for the duration of the outage
5	Information OR Enhancement OR Monitor status to ensure stability updates every 72 hours on a 24x365 basis for the duration of the outage.	Herakles provides notification within 24 hours of a confirmed outage	Herakles provides status updates every 72 hours on a 24x365 basis for the duration of the outage

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EX-10.16

EXHIBIT 10.16

March 24, 2000

Bettina Koblick

4101 Agua Vista St.

Oakland, CA 94601

Dear Bettina:

On behalf of the Board of Directors and management team of Brightmail, Inc. (the “Company”), and subject to the completion by the Company of satisfactory reference checks, I am pleased to offer you the position of Director, Human Resources. In this position, you will report to me.

The terms of your employment are as follows:

1. At-Will Employment

You understand and acknowledge that your employment with the Company is for an unspecified duration and constitutes “at-will” employment. You acknowledge that this employment relationship may be terminated at any time, with or without good cause or for any or no cause, at the option either of the Company or yourself.

2. Compensation

(a) Base Salary: Base salary shall be $95,000 per year, payable semi-monthly in amounts of $3958.33 in U.S. dollars, in accordance with customary Company payroll procedures (including compliance with applicable withholding and other laws) as the same currently exists or may exist in the future. Your position is classified as “exempt” and you will not be eligible for overtime pay.

(b) Incentive Stock Options: Company management will recommend to the Board of Directors that you be granted a stock option (the “Stock Option”) entitling you to purchase up to 40,000 shares of Company Common Stock. The number of shares purchasable pursuant to the Stock Option shall vest as to 1/4th upon the one-year anniversary of your employment start date, and thereafter as to 1/48th at the end of each calendar month until the Stock Option is fully vested.

3. Benefits

You will be entitled to the Company’s basic employment benefits (comprehensive HMO/PPO medical plan including eye care and dental care) available to all Company employees and their immediate families, as the same currently exists or may exist in the future. You acknowledge that participation in Company benefit programs may require payroll deductions and/or direct contributions by you.

4. Employment Terms

This offer of employment is contingent upon your signing and returning to the Company on or before your employment start date, the Non-Disclosure Agreement. Please note that this offer is the entire agreement and understanding between you and the Company regarding your employment relationship and supersedes any other written or oral representation or promise.

Offer Close Date

This offer is open until March 29th, 2000. If the offer has not been signed by you and returned to Brightmail, Inc. by the above stated date, consider this offer null and void.

Satisfactory Reference/Security Checks

This offer is contingent upon completion of professional reference and security checks by the Company, at its discretion and to its satisfaction

5. Start Date

Your start date will be April 17, 2000. Please indicate your acceptance of this offer letter by signing and returning a copy.

Bettina, we are very excited about your joining Brightmail, Inc. and look forward to your joining our team.

Very truly yours,

/s/ Phil Fraher

Phil Fraher

CEO & COO

Agreed and Accepted:

I accept this offer of employment on the terms stated above.

Bettina H. Koblick	3/27/00
Bettina Koblick

Date: March     , 2000

April 19, 2000

Ms. Bettina H. Koblick

4101 Agua Vista Street

Oakland, California 94601

Re: Addendum to Offer Letter

Dear Bettina:

This letter serves as an addendum to our offer letter to you dated March 24, 2000.

Change of Control

In the event of a Change of Control of the Company, if you are not offered a position by the successor corporation or its parent or subsidiaries that is comparable in responsibility and salary to your position in the Company at the time of the Change of Control and you choose to leave the Company within one year of the Change of Control or are terminated without ‘cause’ within one year of the Change of Control, 25% of your initial grant shall vest immediately and you will receive three months of salary. For purposes of the foregoing, ‘cause’ will mean an act of dishonesty or other act by you intended or reasonably likely to damage the Company, the commission of a felony by you, intentionally or grossly negligent failure by you to carry out your obligations to the Company, or breach of the Company’s ‘Non-Disclosure Agreement’.

If you have any questions regarding this matter, please contact me.

Sincerely,

/s/ Gary Hermansen

Gary Hermansen

President & CEO

EX-10.17

EXHIBIT 10.17

September 7, 2001

Francois Lavaste

1414 Lyon Street

San Francisco, California 94115

Dear Francois:

On behalf of the Board of Directors and management team of Brightmail, Inc. (the “Company”), and subject to the completion by the Company of satisfactory reference checks, I am pleased to offer you the position of Vice President of Product Marketing. In this position, you will report to Gary Hermansen, CEO.

The terms of your employment are as follows:

1. At-Will Employment

You understand and acknowledge that your employment with the Company is for an unspecified duration and constitutes “at-will” employment. You acknowledge that this employment relationship may be terminated at any time, with or without good cause or for any or no cause, at the option either of the Company or yourself.

2. Compensation

(a) Base Salary: Base salary shall be $150,000 per year, payable semi-monthly in amounts of $6,250 in U.S. dollars, in accordance with customary Company payroll procedures (including compliance with applicable withholding and other laws) as the same currently exists or may exist in the future. Your position is classified as “exempt” and you will not be eligible for overtime pay.

(b) Incentive Stock Options: Company management will recommend to the Board of Directors that you be granted a stock option (the “Stock Option”) entitling you to purchase up to 175,000 shares of Company Common Stock. 25% of the Shares subject to the Option shall vest one year after the Vesting Commencement Date, and 1/48th of the Shares subject to the Option shall vest on the first day of each month thereafter until all of the Shares are vested.

(c) Commission/Incentive: You are eligible for an annual performance of $50,000. This bonus will be based upon the performance of management objectives to which we mutually agree and will be paid quarterly. You are guaranteed payment of 100% of the commission/incentive bonus for the period of September 17, 2001 through December 31, 2001.

3. Benefits

You will be entitled to the Company’s basic employment benefits (comprehensive HMO/PPO medical plan including eye care and dental care) available to all eligible Company employees and their immediate families, as the same currently exists or may exist in the future. You acknowledge that participation in Company benefit programs may require payroll deductions and/or direct contributions by you.

4. Employment Terms

This offer of employment is contingent upon your signing and returning to the Company on or before your employment start date, the Non-Disclosure Agreement. Please note that this offer is the entire agreement and understanding between you and the Company regarding your employment relationship and supersedes any other written or oral representation or promise.

5. Change of Control - Valid to September 16, 2002

In the event of a Change of Control of the Company, if you are not offered a position by the successor corporation or its parent or subsidiaries that is comparable in responsibility and salary to your position in the Company at the time of the Change of Control and you choose to leave the Company within one year of the Change of Control or are terminated without ‘cause’ within one year of the Change of Control, 25% of your initial grant shall vest immediately. For purposes of the foregoing, ‘cause’ will mean an act of dishonesty or other act by you intended or reasonably likely to damage the Company, the commission of a felony by you, intentionally or grossly negligent failure by you to carry out your obligations to the Company, or breach of the Company’s ‘Non-Disclosure Agreement’.

6. Offer Close Date

This offer is open until Monday, September 10, 2001. If the offer has not been signed by you and returned to Brightmail, Inc. by the above stated date, consider this offer null and void.

7. Satisfactory Reference/Security Checks

This offer is contingent upon completion of professional reference and security checks by the Company, at its discretion and to its satisfaction.

8. Start Date

Your start date will be Monday, September 17, 2001. Please indicate your acceptance of this offer letter by signing and returning it to Human Resources.

Francois, we are very excited about you joining the Brightmail team.

Very truly yours,

/s/ Gary Hermansen

Gary Hermansen

President & CEO

Agreed and Accepted:

I accept this offer of employment on the terms stated above.

/s/ Francois Lavaste	9/7/2001
Francois Lavaste	Date

-2-

EX-10.18

EXHIBIT 10.18

May 23, 2002

Ken Schneider

626 Rockdale Drive

San Francisco, California 94127

Dear Ken:

We are pleased to offer you the position of CTO and Vice President of Operations. In this position, you will report to Enrique Salem, CEO and President.

The terms of your employment are as follows:

1. At-Will Employment

You understand and acknowledge that your employment with the Company is for an unspecified duration and constitutes “at-will” employment. You acknowledge that this employment relationship may be terminated at any time, with or without good cause or for any or no cause, at the option either of the Company or yourself.

2. Compensation

(a) Base Salary: Base salary shall be semi-monthly in amounts of $7,083.33 in U.S. dollars (annualized $170,000), in accordance with customary Company payroll procedures (including compliance with applicable withholding and other laws) as the same currently exists or may exist in the future. Your position is classified as “exempt” and you will not be eligible for overtime pay.

(b) Commission/Incentive: You are eligible for an annual performance based incentive payment opportunity equal to 20% of your base salary. This incentive payment will be based upon the achievement of management objectives to which we mutually agree and will be paid according to the incentive payment plan.

3. Employment Terms

Please note that this offer is the entire agreement and understanding between you and the Company regarding your employment relationship and supersedes any other written or oral representation or promise.

4. Offer Close Date

This offer is open until Friday, May 24, 2002. If the offer has not been signed by you and returned to Brightmail, Inc. by the above stated date, consider this offer null and void.

5. Start Date

Your start date in this role is effective May 16, 2002. Please indicate your acceptance of this offer letter by signing and returning it to Human Resources.

Ken, we are very excited about your continued commitment to Brightmail.

Very truly yours,

/s/ Enrique Salem

Enrique Salem

CEO and President

Agreed and Accepted:

I accept this offer of employment on the terms stated above.

/s/ Ken Schneider	5/23/2002
Ken Schneider	Date

-2-

EX-21.1

Exhibit 21.1

Subsidiaries

Name	Jurisdiction of Incorporation
Brightmail B.V.	Netherlands
Brightmail Pty Limited	Australia
Brightmail Limited	U.K.
Brightmial GmbH A.I.	Germany

EX-23.2

EXHIBIT 23.2

Consent of Ernst & Young LLP, Independent Auditors

We consent to the reference to our firm under the caption “Experts” and to the use of our report dated March 17, 2004, except for note 10 as to which the date is March 21, 2004, in Amendment No. 1 to the Registration Statement (Form S-1 No. 333-113830) and related Prospectus of Brightmail Incorporated for the registration of shares of its common stock dated April 28, 2004.

/s/    ERNST & YOUNG LLP

Sacramento, California

April 27, 2004

EX-23.3

I N T E R N A T I O N A L    D A T A

C O R P O R A T I O N

Exhibit 23.3        

IDC Letter of Authorization

Date March 17, 2004

To: Betsy Crosby

J.P. Morgan Securities Inc.

560 Mission St., Floor 19

San Francisco, CA 94105

Tel: 415-315-8306

Fax: 415-315-8685

Dear Betsy Crosby,

Absent prior written consent, the IDC name, logo, trademarks or copyrighted information cannot be used in promotional materials, publicity releases, advertising, or any other similar publications or communications, whether oral or written.

Please consider this letter as written authorization to use the following data:

Data point/quote	IDC data point used	Report Cited	Page
“We had 300 million mailboxes under subscription in January 2004, representing 25% of all mailboxes worldwide, based on estimates of International Data Corporation (“IDC”), a market research firm.”	1,118 million mailboxes worldwide in 2003 and 1,268 million mailboxes in 2004	“Worldwide Email Usage, 2003-2007: Spam and Instant Messaging Take a Bite Out of Email”, October 2003 (IDC#30195)	Pg. 8
“With the global adoption of the Internet, the use of electronic messaging has become a ubiquitous communication tool and a mission critical application for the conduct of business. According to estimates by IDC, by 2007 the number of worldwide email boxes will be 1.6 billion, and the number of person-to-person email messages sent worldwide will be more than 9.1 trillion”	1,576 million mailboxes in 2007	“Worldwide Email Usage, 2003-2007: Spam and Instant Messaging Take a Bite Out of Email”, October 2003 (IDC#30195)	Pg. 8
“With the global adoption of the Internet, the use of electronic messaging has become a ubiquitous communication tool and a mission critical application for the conduct of business. According to estimates by IDC, by 2007 the number of worldwide email boxes will be 1.6 billion, and the number of person-to-person email messages sent worldwide will be more than 9.1 trillion”	9.1 trillion person-to-person email messages sent annually worldwide	“Worldwide Email Usage, 2003-2007: Spam and Instant Messaging Take a Bite Out of Email”, October 2003 (IDC#30195)	Pg. 24
“According to IDC, in 2003 spammers sent an average of 13.5 billion emails per day, and spam as a percentage of overall Internet email traffic will grow from 37% in 2002 to 67% in 2007.”	13.47 billion spam messages sent daily worldwide	“Worldwide Email Usage, 2003-2007: Spam and Instant Messaging Take a Bite Out of Email”, October 2003 (IDC#30195)	Pg. 27
“According to IDC, in 2003 spammers sent an average of 13.5 billion emails per day, and spam as a percentage of overall Internet email traffic will grow from 37% in 2002 to 67% in 2007.”	–  7.19 billion spam messages sent daily worldwide in 2002 out of 20.8 billion email messages sent on an average day (equals 37%) –  22.91 billion spam messages sent daily in 2007 out of 34.4 billion email messages sent on an average day (equals 67%)	“Worldwide Email Usage, 2003-2007: Spam and Instant Messaging Take a Bite Out of Email”, October 2003 (IDC#30195)	Pg. 23, 27
“IDC estimates that the messaging security software market will grow from $364 million in 2003 to $1.1 billion in 2007, representing a compound annual growth rate of 31%.”	–  Table: Worldwide Secure Content Management Software by Segment 2002-2007. –  Messaging security market is $364 million in 2003 and $1,084.5 million in 2007	“Worldwide Secure Content Management Forecast Update and Competitive Vendor Shares, 2002-2007” (IDC #29635)	Pg. 36

IDC Market Research (M) Sdn Bhd (392772-T)

Suite 13-03, Level 13, Menara HLA

3, Jalan Kia Peng, 50450 Kuala Lumpur

Tel: (603) 2163-3715     Fax: (603) 2163-5098

[LOGO]

I N T E R N A T I O N A L    D A T A

C O R P O R A T I O N

A copy of the final version of the text used in the prospectus of Brightmail Inc. also attached for reference. Should there be any changes to this text, please notify IDC Asia/Pacific immediately.

IDC is not responsible for any damage or loss resulting from the use of IDC information, regardless of the circumstances, and will be held harmless from any loss, cost, or expense, suffered or incurred as a result of, or in connection with any claim, suit or action from any party pertaining to that use.

Should you have any questions, feel free to contact Daniel Lai at 603-2169-7525.

Best regards,

By:

/s/    Selinna Chin

By: Selinna Chin

Title: Managing Director

(IDC Malaysia)

International Data Corporation (“IDC”)

IDC Market Research (M) Sdn Bhd (392772-T)

Suite 13-03, Level 13, Menara HLA

3, Jalan Kia Peng, 50450 Kuala Lumpur

Tel: (603) 2163-3715     Fax: (603) 2163-5098

[LOGO]

EX-23.4

Exhibit 23.4

[LOGO]	408 Columbus Avenue #1
	San Francisco, CA 94133 USA
	tel + 1 415 986 1414
	fax + 1 415 986 5994
	info@ferris.com
	www.ferris.com

Ferris Research, Inc. – Letter of Authorization

Date: April 27, 2004

To: Betsy Crosby

J.P. Morgan Securities Inc.

560 Mission St., Floor 19

San Francisco, CA 94105

Tel: 415-315-8306

Fax: 415-315-8685

Dear Ms. Crosby,

Please consider this letter as written authorization to use the following data:

Data point/quote	Report	Pg. in Source	Note
The aggregate cost due to spam threats for American corporations exceeded $10 billion in 2003	Title: “Spam Control: Problems and Opportunities”, January 6, 2003 http://www.ferris.com/url/spam.html	Pg. 15 (enterprises), pg. 20 (ISPs)	Add the dollar amount for enterprises on pg. 15 and ISPs on pg. 20 to get to the $10.0 billion
As of January, 2003, Only 10% of corporate mailboxes have some level of anti-spam solution	“Spam Control: Problems and Opportunities”, January 2003, Ferris Research Analyzer info Service	Pg. 15
As of January, 2003, Only 10% of corporate mailboxes have some level of anti-spam solution	“Spam Control: Problems and Opportunities” January 2003, Ferris Research Analyzer info Service	Pg. 15

By:

/s/    Davis Ferris

Davis Ferris

President

Ferris Research, Inc.

EX-23.5

EXHIBIT 23.5

CONSENT

The undersigned hereby consents to the disclosure of the relationship of Brightmail Incorporated, a Delaware corporation (“Brightmail”), with the undersigned, including use of the results and conclusions of Veritest’s evaluation and testing of the Brightmail product, as published in any Veritest Reports (listed below), in any registration statement on Form S-1 (“Registration Statement”) to be filed in connection with Brightmail’s initial public offering.

Date: 3/18, 2004

Veritest
By:	/s/ C. Kaplan
Name:	C. Kaplan
Title:	Bus. Dev. Dir.

Veritest Reports:

Brightmail Anti-Spam Comparative Performance Test – Accuracy, April 2003

Brightmail Anti-Spam Comparative Performance Test – Effectiveness, April 2003

EX-23.6

EXHIBIT 23.6

April 27, 2004

Brightmail Incorporated

301 Howard Street

Suite 1800

San Francisco, CA 94105

Dear Mr. Francois,

Please consider this letter as written authorization to use the data contained in our report entitled “E-mail Security Solutions Providers Seek to Stop Spam and Viruses at the Perimeter” dated February 2004, including, without limitation, that Brightmail Incorporated’s anti-spam solution has fewer than one false positive in every one million messages.

By:	/s/    ELLE HOXIE
	Name: Elle Hoxie Title:   Marketing Programs and Licensing        Manager