sv1za

/s/ Kevin Mosher

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GuraL82n4nRgGgBJX7EXY/Vf/Ro7QZ48+7q6GFjRlnuZqWieXPfuPbPtcYbzZpgY eU+8tHMZpkWnucKxkkFKow== 0000950134-07-020201.txt : 20070920 0000950134-07-020201.hdr.sgml : 20070920 20070919205831 ACCESSION NUMBER: 0000950134-07-020201 CONFORMED SUBMISSION TYPE: S-1/A PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 20070920 DATE AS OF CHANGE: 20070919 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ArcSight Inc CENTRAL INDEX KEY: 0001368582 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] FILING VALUES: FORM TYPE: S-1/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-145974 FILM NUMBER: 071125795 BUSINESS ADDRESS: STREET 1: 5 Results Way CITY: Cupertino STATE: CA ZIP: 95014 BUSINESS PHONE: 408-864-2600 MAIL ADDRESS: STREET 1: 5 Results Way CITY: Cupertino STATE: CA ZIP: 95014 S-1/A 1 f28075a1sv1za.htm AMENDMENT TO FORM S-1 sv1za

As filed with the Securities and Exchange Commission on September 19, 2007

Registration No. 333-145974

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1

Form S-1

Registration Statement Under The Securities Act of 1933

ArcSight, Inc.

(Exact name of Registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		7372 (Primary Standard Industrial Classification Code Number)		52-2241535 (I.R.S. Employer Identification Number)

ArcSight, Inc.

5 Results Way

Cupertino, California 95014

(408) 864-2600

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

Robert W. Shaw

Chief Executive Officer and

Chairman of the Board

ArcSight, Inc.

5 Results Way

Cupertino, California 95014

(408) 864-2600

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

Please send copies of all communications to:


David A. Bell, Esq. Daniel J. Winnike, Esq. Yoonie Y. Chang, Esq. Michael J. Hopp, Esq. Fenwick & West LLP 801 California Street Mountain View, California 94041 (650) 988-8500		Trâm T. Phi, Esq. Vice President and General Counsel ArcSight, Inc. 5 Results Way Cupertino, California 95014 (408) 864-2600		Bruce K. Dallas, Esq. Davis Polk & Wardwell 1600 El Camino Real Menlo Park, California 94025 (650) 752-2000

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

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, check the following box: o

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. o

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. o

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. o

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.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS


Item 13.	*Other Expenses of Issuance and Distribution*

The following table sets forth all expenses to be paid by the Registrant, other than estimated underwriting discounts and commissions, in connection with this offering. All amounts shown are estimates except for the SEC registration fee, the FINRA filing fee and The NASDAQ Global Market listing fee:


SEC registration fee	$	2,295
FINRA filing fee		7,975
The NASDAQ Global Market listing fee		*
Printing and engraving		*
Legal fees and expenses		*
Accounting fees and expenses		*
Blue sky fees and expenses (including legal fees)		*
Transfer agent and registrar fees		*
Director and officer insurance		*
Miscellaneous		*

Total	$	*


*		To be completed 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 directors and officers under certain circumstances and subject to certain limitations. The terms of Section 145 of the Delaware General Corporation Law are sufficiently broad to permit indemnification under certain circumstances for liabilities, including reimbursement of expenses incurred, arising under the Securities Act of 1933, as amended (the “Securities Act”).

As permitted by the Delaware General Corporation Law, the Registrant’s restated certificate of incorporation contains provisions that eliminate the personal liability of its directors for monetary damages for any breach of fiduciary duties as a director, except liability for the following:


	•	any breach of the director’s duty of loyalty to the Registrant or its stockholders;

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

	•	under Section 174 of the Delaware General Corporation Law (regarding unlawful dividends and stock purchases); or

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

As permitted by the Delaware General Corporation Law, the Registrant’s restated bylaws to be effective upon the completion of this offering, provide that:


	•	the Registrant is required to indemnify its directors and executive officers to the fullest extent permitted by the Delaware General Corporation Law, subject to very limited exceptions;

	•	the Registrant may indemnify its other employees and agents as set forth in the Delaware General Corporation Law;

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	•	the Registrant is required to advance expenses, as incurred, to its directors and executive officers in connection with a legal proceeding to the fullest extent permitted by the Delaware General Corporation Law, subject to very limited exceptions; and

	•	the rights conferred in the bylaws are not exclusive.

Prior to the completion of this offering, the Registrant intends to enter into indemnity agreements with each of its current directors and executive officers to provide these directors and executive officers additional contractual assurances regarding the scope of the indemnification set forth in the Registrant’s restated certificate of incorporation and restated bylaws and to provide additional procedural protections. At present, there is no pending litigation or proceeding involving a director or executive officer of the Registrant regarding which indemnification is sought. Reference is also made to Section 8 of the Underwriting Agreement, which provides for the indemnification of executive officers, directors and controlling persons of the Registrant against certain liabilities. The indemnification provision in the Registrant’s restated certificate of incorporation, restated bylaws and the indemnification agreements entered into or to be entered into between the Registrant and each of its directors and executive officers may be sufficiently broad to permit indemnification of the Registrant’s directors and executive officers for liabilities arising under the Securities Act.

The Registrant currently carries liability insurance for its directors and officers.

One of Registrant’s directors (Ted Schlein) is also indemnified by his employer with regard to his service on the Registrant’s board of directors.

Reference is made to the following documents filed as exhibits to this Registration Statement regarding relevant indemnification provisions described above and elsewhere herein:


	Exhibit
Exhibit Title	Number

Form of Underwriting Agreement		1.1
Form of Amended and Restated Certificate of Incorporation of the Registrant, to be in effect upon the completion of this offering		3.2
Form of Amended and Restated Bylaws of the Registrant, to be in effect upon the completion of this offering		3.4
Amended and Restated Investors’ Rights Agreement, dated as of October 24, 2002, between the Registrant and certain security holders of the Registrant		4.2
Form of Indemnity Agreement to be entered into between the Registrant and its directors and executive officers		10.1


Item 15.	*Recent Sales of Unregistered Securities*

Since May 1, 2004, the Registrant has issued and sold the following securities:

1. Since May 1, 2004, the Registrant has granted to its directors, officers, employees and consultants options to purchase shares of common stock under its 2002 Stock Plan with per share exercise prices ranging from $0.09 to $2.50, and has issued 6,721,520 shares of common stock upon exercise of such options. These transactions were exempt from the registration requirements of the Securities Act in reliance upon Rule 701 promulgated under the Securities Act or Section 4(2) of the Securities Act.

2. In May 2006, the Registrant issued 250,000 shares of its common stock (valued at approximately $380,000) to Challenger Capital LLC, a sophisticated accredited investor). This transaction was exempt from registration requirements of the Securities Act in reliance upon Section 4(2) of the Securities Act or Regulation D promulgated under the Securities Act.

3. In May 2006, the Registrant issued warrants to purchase an aggregate of 64,734 shares of Series B Preferred Stock at an exercise price of $0.00001 per share to nine sophisticated accredited investors who previously purchased the Registrant’s Series B preferred stock in connection with the terms of an agreement with such investors. In April 2007, Institutional Venture Partners X, L.P. and Institutional Venture Partners X, GmbH & Co. Beteilgungs KG

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exercised their warrants at an exercise price of $0.00001 per share, and we issued an aggregate of 13,099 shares of Series B preferred stock. This transaction was exempt from registration requirements of the Securities Act in reliance upon Section 4(2) of the Securities Act or Regulation D promulgated under the Securities Act.

4. In June 2006, the Registrant issued an aggregate of 1,543,684 shares of its common stock (valued at approximately $2.3 million) to Enira Technologies, LLC (“Enira”) in connection with the acquisition of the assets of Enira, of which 1,315,789 shares of common stock were held in escrow with the Registrant. In September 2006, pursuant to the dissolution of Enira, 1,543,684 shares of common stock (valued at approximately $2.3 million) were transferred to one advisor to Enira, who was sophisticated and accredited, and eight members of Enira, three of whom were sophisticated and accredited and five of whom appointed a “purchaser representative” and “professional advisor” as used in Rule 501(h) promulgated under the Securities Act. 1,315,789 of such shares of common stock are currently held in escrow by the Registrant. This transaction was exempt from registration requirements of the Securities Act in reliance upon Section 4(2) of the Securities Act or Regulation D promulgated under the Securities Act.

None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering, and the Registrant believes each transaction was exempt from the registration requirements of the Securities Act as stated above. The recipients of the foregoing securities in such transactions represented their intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were affixed to the share certificates and instruments issued in such transactions. All recipients of the foregoing transactions either received adequate information about the Registrant or had access, through their relationships with the Registrant, to such information.


Item 16.	*Exhibits and Financial Statement Schedules*

(a) Exhibits. The following exhibits are included herein or incorporated herein by reference:


Exhibit Number			Description

	1	.1*	Form of Underwriting Agreement.
	3	.1‡	Restated Certificate of Incorporation, as amended, of the Registrant.
	3	.2*	Form of Amended and Restated Certificate of Incorporation of the Registrant, to be in effect upon the completion of this offering.
	3	.3‡	Amended and Restated Bylaws of the Registrant.
	3	.4*	Form of Amended and Restated Bylaws of the Registrant, to be in effect upon the completion of this offering.
	4	.1*	Form of Registrant’s common stock certificate.
	4	.2‡	Amended and Restated Investors’ Rights Agreement, dated as of October 24, 2002, between the Registrant and certain security holders of the Registrant.
	5	.1*	Opinion of Fenwick & West LLP.
	10	.1*	Form of Indemnity Agreement to be entered into between the Registrant and its directors and executive officers.
	10	.2‡	2000 Stock Incentive Plan.
	10	.3‡	Forms of Stock Option Agreement and Stock Option Exercise Agreement under the 2000 Stock Incentive Plan.
	10	.4‡	2002 Stock Plan, as amended.
	10	.5‡	Forms of Stock Option Agreement and Stock Option Exercise Agreement under the 2002 Stock Plan.
	10	.6*	2007 Equity Incentive Plan, to be in effect upon the completion of this offering.
	10	.7*	Form of Stock Option Agreement and Stock Option Exercise Agreement under the 2007 Equity Incentive Plan.
	10	.8*	2007 Employee Stock Purchase Plan, to be in effect upon the completion of this offering.
	10	.9*	Form of Subscription Agreement under the 2007 Employee Stock Purchase Plan.
	10	.10	Second Amended and Restated Employment Agreement, effective as of August 13, 2007, between the Registrant and Robert W. Shaw.

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Exhibit Number			Description

	10	.11	Offer Letter, dated June 1, 2000, between the Registrant and Hugh S. Njemanze.
	10	.12	Offer Letter, dated January 24, 2003, between the Registrant and Stewart Grierson.
	10	.13	Offer Letter, dated February 26, 2004, between the Registrant and Kevin P. Mosher.
	10	.14	Offer Letter, dated October 5, 2006, between the Registrant and Thomas Reilly.
	10	.15	Fiscal Year 2007 Management and Employee Bonus Plan.
	10	.16†	Sales Commission Plan – FY 2007 (Kevin P. Mosher).
	10	.17‡	Lease Agreement, dated April 24, 2007, between the Registrant and ECI Two Results LLC.
	10	.18†	Oracle PartnerNetwork Embedded Software License Distribution Agreement, dated March 31, 2006, as amended, between the Registrant and Oracle USA, Inc.
	21	.1*	Subsidiaries of the Registrant.
	23	.1‡	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
	23	.2*	Consent of Fenwick & West LLP (included in Exhibit 5.1).
	24	.1‡	Power of Attorney.
	99	.1‡	Consent of TheInfoPro, Inc., a market research firm, dated September 7, 2007.
	99	.2‡	Consent of International Data Corporation, a market research firm, dated September 10, 2007.


*		To be filed by amendment.


‡		Previously Filed.


†		Registrant has omitted portions of the referenced exhibit and filed such exhibit separately with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act.

(b) Financial Statement Schedules. All financial statement schedules are omitted because they are not applicable or the information is included in the Registrant’s consolidated financial statements or related notes.


Item 17.	*Undertakings*

The undersigned Registrant 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 Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in Item 14 above, 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 Securities 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, 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 Securities 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 Securities 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 Securities 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 Securities 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.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cupertino, State of California, on this 19^th day of September, 2007.

ARCSIGHT, INC.


	By:	/s/ Robert W. Shaw

Robert W. Shaw
Chief Executive Officer and
Chairman of the Board of Directors

Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to Registration Statement has been signed by the following persons in the capacities and on the date indicated.


Signature		Title	Date


/s/ Robert W. Shaw Robert W. Shaw		Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer)	September 19, 2007

/s/ Stewart Grierson Stewart Grierson		Chief Financial Officer (Principal Accounting and Financial Officer)	September 19, 2007

* Sandra Bergeron		Director	September 19, 2007

* William P. Crowell		Director	September 19, 2007

* E. Stanton McKee, Jr.		Director	September 19, 2007

* Craig Ramsey		Director	September 19, 2007

* Scott A. Ryles		Director	September 19, 2007

* Ted Schlein		Director	September 19, 2007

* Ernest von Simson		Director	September 19, 2007

* By:	/s/ Robert W. Shaw Robert W. Shaw	Attorney-in-Fact	September 19, 2007

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EXHIBIT INDEX


Exhibit Number			Description

	1	.1*	Form of Underwriting Agreement.
	3	.1‡	Restated Certificate of Incorporation, as amended, of the Registrant.
	3	.2*	Form of Amended and Restated Certificate of Incorporation of the Registrant, to be in effect upon the completion of this offering.
	3	.3‡	Amended and Restated Bylaws of the Registrant.
	3	.4*	Form of Amended and Restated Bylaws of the Registrant, to be in effect upon the completion of this offering.
	4	.1*	Form of Registrant’s common stock certificate.
	4	.2‡	Amended and Restated Investors’ Rights Agreement, dated as of October 24, 2002, between the Registrant and certain security holders of the Registrant.
	5	.1*	Opinion of Fenwick & West LLP.
	10	.1*	Form of Indemnity Agreement to be entered into between the Registrant and its directors and executive officers.
	10	.2‡	2000 Stock Incentive Plan.
	10	.3‡	Forms of Stock Option Agreement and Stock Option Exercise Agreement under the 2000 Stock Incentive Plan.
	10	.4‡	2002 Stock Plan, as amended.
	10	.5‡	Forms of Stock Option Agreement and Stock Option Exercise Agreement under the 2002 Stock Plan.
	10	.6*	2007 Equity Incentive Plan, to be in effect upon the completion of this offering.
	10	.7*	Form of Stock Option Agreement and Stock Option Exercise Agreement under the 2007 Equity Incentive Plan.
	10	.8*	2007 Employee Stock Purchase Plan, to be in effect upon the completion of this offering.
	10	.9*	Form of Subscription Agreement under the 2007 Employee Stock Purchase Plan.
	10	.10	Second Amended and Restated Employment Agreement, effective as of August 13, 2007, between the Registrant and Robert W. Shaw.
	10	.11	Offer Letter, dated June 1, 2000, between the Registrant and Hugh S. Njemanze.
	10	.12	Offer Letter, dated January 24, 2003, between the Registrant and Stewart Grierson.
	10	.13	Offer Letter, dated February 26, 2004, between the Registrant and Kevin P. Mosher.
	10	.14	Offer Letter, dated October 5, 2006, between the Registrant and Thomas Reilly.
	10	.15	Fiscal Year 2007 Management and Employee Bonus Plan.
	10	.16†	Sales Commission Plan – FY 2007 (Kevin P. Mosher).
	10	.17‡	Lease Agreement, dated April 24, 2007, between the Registrant and ECI Two Results LLC.
	10	.18†	Oracle PartnerNetwork Embedded Software License Distribution Agreement, dated March 31, 2006, as amended, between the Registrant and Oracle USA, Inc.
	21	.1*	Subsidiaries of the Registrant.
	23	.1‡	Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
	23	.2*	Consent of Fenwick & West LLP (included in Exhibit 5.1).
	24	.1‡	Power of Attorney (see page II-5 to this Form S-1).
	99	.1‡	Consent of TheInfoPro, Inc., a market research firm, dated September 7, 2007.
	99	.2‡	Consent of International Data Corporation, a market research firm, dated September 10, 2007.


*		To be filed by amendment.


‡		Previously Filed.


†		Registrant has omitted portions of the referenced exhibit and filed such exhibit separately with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act.

EX-10.10 2 f28075a1exv10w10.htm EXHIBIT 10.10 exv10w10

Exhibit 10.10

SECOND AMENDED AND RESTATED
EMPLOYMENT AGREEMENT

This Second Amended and Restated Employment Agreement (this “Agreement”) is entered into as of August 13, 2007 (the “Effective Date”), by and between ArcSight, Inc., a Delaware corporation (the “Company’), and Robert W. Shaw (the “Executive”).

WHEREAS, the Company currently employs the Executive under an Amended and Restated Employment Agreement dated as of August 13, 2004, and scheduled to expire on August 13, 2007; and

WHEREAS, the Company desires to continue the Executive’s employment on the terms and conditions set forth in this Second Amended and Restated Employment Agreement and the Executive desires to continue his employment with the Company on such terms;

NOW, THEREFORE, in consideration of the foregoing recitals and the respective covenants and agreements of the parties contained in this Agreement, the Company and the Executive agree as follows:

1. Employment and Duties. During the Employment Period (as defined in Section 2 below), the Executive will serve as Chief Executive Officer of the Company. The duties and responsibilities of the Executive shall include the customary duties for such position, as set forth for such position in the Company’s bylaws from time to time in effect and such other duties and responsibilities as the Board of Directors of the Company (the “Board of Directors”) may from time to time reasonably assign. The Executive shall report to the Board of Directors. In addition, during the Employment Period, the Executive shall (a) serve at the pleasure of the stockholders as a member of the Board of Directors and shall be nominated for such position by the Company whenever directors are to be elected and (b) as determined by the Board of Directors in its sole discretion, serve as the Chairman of the Board of Directors. The Executive shall perform faithfully the executive duties assigned to him to the best of his ability.

2. Employment Period.

(a) Term. The Employment Period shall begin upon the Effective Date and shall continue thereafter until the second anniversary of the Effective Date (such agreed period hereafter the “Employment Period”), unless sooner terminated pursuant to the provisions of this Agreement.

(b) Early Termination.

(i) The Company may terminate the Executive’s employment prior to the end of the Employment Period by giving the Executive 10 days’ advance notice in writing. If the Company terminates the Executive’s employment prior to the end of the Employment Period for any reason other than death, Cause or Disability, both as defined below, the provisions of Section 10(a) shall apply. The Executive may terminate his employment prior to the end of the Employment Period by giving the Company 10 days’ advance written notice. If the Executive terminates his employment prior to the end of the Employment Period other than for Good Reason, the provisions of Section 10(b) shall apply.

(ii) The Executive may terminate his employment prior to the end of the Employment Period for Good Reason, as defined below, and, provided that the Executive (i) notifies the Company in writing not later than 90 days from the date of the initial event giving rise to Good Reason (ii) provides the Company with at least 30 days to remedy such the event constituting Good Reason and (iii) terminates employment with the Company within 7 days following the Company’s failure to cure.

(iii) The Executive may terminate his employment prior to the end of the Employment Period other than for Good Reason, as defined below, by giving the Company 10 days’ advance written notice, and, upon such termination, the provisions of Section 10(b) shall apply.

Upon termination of the Executive’s employment with the Company, the Executive’s rights under any applicable benefit plans shall be determined under the provisions of those plans. Any waiver of notice shall be valid only if it is made in writing and expressly refers to the applicable notice requirement of this Section 2(b).

(c) Death. The Executive’s employment shall terminate in the event of his death. The Company shall have no obligation to pay or provide any compensation or benefits under this Agreement on account of the Executive’s death, or for periods following the Executive’s death. The Executive’s rights under the benefit plans of the Company in the event of the Executive’s death shall be determined under the provisions of those plans.

(d) Cause. The Company may terminate the Executive’s employment for Cause at any time upon delivery of notice in writing. For all purposes under this Agreement, “Cause” shall mean (i) willful failure by the Executive to substantially perform his duties hereunder after receipt of a written warning from the Board of Directors, (ii) a willful act by the Executive which is injurious to the Company, (iii) a willful breach by the Executive of a material provision of this Agreement, or (iv) a material violation of a federal or state law or regulation applicable to the business of the Company. No compensation or benefits will be paid or provided to the Executive under this Agreement on account of a termination for Cause, or for periods following the date when such a termination of employment is effective. The Executive’s rights under the benefit plans of the Company shall be determined under the provisions of those plans.

(e) Disability. The Company may terminate the Executive’s employment for Disability by giving the Executive 10 days’ advance notice in writing. For all purposes under this Agreement, “Disability” shall mean that the Executive, at the time notice is given, has been unable to substantially perform his duties under this Agreement for a period of not less than two consecutive months, or for at least 50 business days in any twelve-month period, as the result of his incapacity due to physical or mental illness. In the event that the Executive resumes the performance of substantially all of his duties hereunder before the termination of his employment under this Subsection (e) becomes effective, the notice of termination shall automatically be deemed to have been revoked, provided that the Executive shall not be entitled to continue his employment with the Company if so specified in the notice if he has been unable to substantially

perform his duties under this Agreement for a period of at least 70 business days in the twelve-month period prior to the date of the notice. No compensation or benefits will be paid or provided to the Executive under this Agreement on account of termination for Disability, or for periods following the date when such a termination of employment is effective. The Executive’s rights under the benefit plans of the Company shall be determined under the provisions of those plans.

(f) Good Reason. Employment with the Company may be regarded as having been constructively terminated by the Company, and the Executive may therefore terminate his employment for Good Reason and thereupon become entitled to the benefits of Section 10(a) below, if, before the end of the Employment Period, one or more of the following events shall occur (unless, in the case of an event described in Paragraph (iii), (iv) or (v) below that occurs prior to a Change in Control (as defined in the Company’s 2002 Stock Plan), such event applies generally to all senior management of the Company):

(i) the assignment to the Executive of any duties or the reduction of the Executive’s duties, either of which results in a significant diminution in the Executive’s position or responsibilities with the. Company in effect immediately prior to such assignment, or the removal of the Executive from such position and responsibilities;

(ii) the assignment to the Executive of (A) any position other than the position of Chief Executive Officer of the Company or (B) any position that does not report directly to the Board of Directors of the Company; ‘

(iii) a material reduction, without good business reasons, of the facilities and perquisites available to the Executive immediately prior to such reduction;

(iv) a material reduction in the Base Salary of the Executive as in effect immediately prior to such reduction; or

(v) a material reduction by the Company in the kind or level of employee benefits to which the Executive is entitled immediately prior to such reduction with the result that the Executive’s overall benefits package is significantly reduced.

3. Place of Employment. The Executive’s services shall be performed at the Company’s principal executive offices. The parties acknowledge, however, that the Executive may be required to travel extensively in connection with the performance of his duties hereunder, including travel to the principal places of business, and travel on behalf of, the parent and affiliates of the Company.

4. Salary.

(a) Base Salary. For all services to be rendered by the Executive pursuant to this Agreement, the Company agrees to pay the Executive during the Employment Period a base salary (the “Base Salary”) at an annual rate of not less than four hundred fourteen thousand five hundred dollars ($414,500); The Base Salary shall be paid in periodic installments in accordance with the Company’s regular payroll practices.

(b) Bonus. In addition to the Base Salary, the Executive may receive an annual bonus in such amount as shall be determined by the Board of Directors, in its sole discretion. Executive’s annual bonus (if any) shall be paid to Executive not later than July 15th of the year following the year in which Executive performs services with respect to such annual bonus.

5. Expenses.

(a) General Expenses. The Executive shall be entitled to prompt reimbursement by the Company for all reasonable, ordinary and necessary travel, entertainment and other Company-related expenses incurred by the Executive during the Employment Period (in accordance with the policies and procedures established by the Company for its senior executive officers) in the performance of his duties and responsibilities under this Agreement; provided, however, that the Executive shall properly account for such expenses in accordance with Company policies and procedures. In addition, the Company shall (i) reimburse the Executive for all reasonable travel expenses between the Executive’s home and the Company’s principal office (including the lease or rental of a car for use in the area of the Company’s principal office and any associated automobile-related expenses (e.g., maintenance, etc.)) and (ii) make cash payments to the Executive in amounts calculated to provide after-tax proceeds sufficient to pay any federal and state income and payroll taxes on the reimbursements described in clause (i); provided, however, that the cash payment contemplated in this clause (ii) shall be paid to Executive no later than December 31^st of the year following the year in which Executive pays the relevant taxes.

(b) Telephone and Data Service. As necessities to the performance of his service hereunder, the Company shall, during the Employment Period, furnish to the Executive (i) a cellular telephone (for which Company shall pay all monthly base charges and the call charges related to Company business purposes, as well as related tax and other charges in connection with such use) and (ii) a DSL or cable modem connection to facilitate the Executive’s access to the Internet (for which Company shall pay reasonable installation costs and monthly fees).

6. Stock Purchase Right. The Company shall file a reoffer prospectus with respect to all shares of the Company’s Common Stock held by the Executive at such time as the Company files an initial registration statement on Form S-8 (or any successor or substitute form) in the event that no exemption is available under Rule 144 or Rule 701 of the Securities and Exchange Commission with respect to the resale of such shares by the Executive upon an initial public offering of the Company’s securities.

7. Other Benefits. During the Employment Period, the Executive shall be entitled to participate in medical, dental and other employee benefit plans or programs of the Company, if any, to the extent that his position, tenure, salary, age, health and other qualifications make him eligible to participate, subject to the rules and regulations applicable thereto. In addition, the Company shall, during the Employment Period: (a) maintain in effect for the Executive, at the Company’s expense, a life insurance policy insuring the life of the Executive in the amount of $2,000,000, with the beneficiary or beneficiaries of such policy to be as determined by the Executive from time to time in his sole discretion; (b) reimburse the Executive for the reasonable

cost of maintaining a rental apartment near the Company’s principal offices (provided that the aggregate cost under Section 5(a)(i) and this Section 7(b) in any Company fiscal year shall not exceed $125,000); and (c) make cash payments to the Executive in amounts calculated to provide after-tax proceeds sufficient to pay any federal and state income and payroll taxes on the benefits described in clauses (a), and (b) above; provided, however, that the cash payment contemplated in this clause (c) shall be paid to Executive no later than December 31^st of the year following the year in which Executive pays the relevant taxes.

8. Vacations and Holidays. The Executive shall be entitled to four weeks of paid vacation for each year of his employment with the Company, and Company holidays in accordance with the Company’s policies in effect from time to time for its senior executive officers.

9. Other Activities. The Executive shall, except for Permitted Outside Activities, as defined below, during the Employment Period, devote substantially all of his working time and efforts to the business and affairs of the Company and its subsidiaries and to the diligent and faithful performance of the duties assigned to him pursuant to this Agreement, except for vacations, holidays and sickness, and shall not, during any period for which the Executive receives any compensation hereunder, without the prior written approval of the Board of Directors, actively participate in any other business (other than Permitted Outside Activities), whether as an employee, consultant, director or in any other capacity, nor shall the Executive take any actual or contingent direct ownership interest in any business, other than the Company, engaged in the design, development or sale of security and compliance software or hardware or substantially similar products or such other business of the Company that may be described from time to time during the Employment Period in filings with the Securities and Exchange Commission (the “Business”), provided, however, that this Agreement shall not prohibit the ownership by the Executive of up to five percent (5%) of the issued and outstanding capital stock of a publicly-held corporation operating in the Business, so long as he does not participate in the control or take an active part in the management or direction thereof and does not act as consultant or in any other way render services thereto. “Permitted Outside Activities,” as used herein, shall mean (a) service on the boards of directors of the corporations listed on Exhibit A hereto and (b) service on the boards of directors of such other corporations as may be approved by the Company’s Board of Directors in its sole discretion.

10. Termination Benefits. In the event the Executive’s employment terminates prior to the end of the Employment Period, then the Executive shall be entitled to receive severance and other benefits as follows:

(a) Involuntary Termination. In the event the Company terminates the Executive’s employment other than for death, Disability or Cause, or if the Executive terminates his employment for Good Reason, then, in lieu of any severance benefits to which the Executive may otherwise be entitled under any Company severance plan or program, the Executive shall be entitled to (i) a lump-sum severance benefit in an amount equal to 12 months of his Base Salary, which shall be paid no later than March 15th of the year following the year in which the Company terminates the Executive’s employment other than for death, Disability or Cause, or if the Executive terminates his employment for Good Reason, and (ii) the acceleration of the vesting of 33% of the original number of shares included in any grant of options, restricted

shares, stock units or other forms of equity made by the Company to the Executive. In addition, if the Company is subject to a Change in Control and within 12 months thereafter the Company terminates the Executive’s employment other than for death, Disability or Cause, or if the Executive terminates his employment for Good Reason, then the Executive shall be entitled to the acceleration of the vesting of 100% of the original number of shares included in any grant of options, restricted shares, stock units or other forms of equity made by the Company to the Executive.

(b) Other Termination. In the event the Executive’s employment terminates for any reason other than as described in Section 10(a) above, including by reason of the Executive’s death, Disability or resignation other than for Good Reason, then the Executive shall be entitled to receive severance and any other benefits only as may be established under the Company’s severance and benefit plans and policies at the time of such termination.

11. Withholding Taxes; Section 409A. All payments made under this Agreement shall be subject to reduction to reflect all federal, state, local and other taxes required to be withheld by applicable law. Notwithstanding any provision to the contrary, to the extent (i) any payments to which Executive becomes entitled under this Agreement, or any agreement or plan referenced herein, in connection with Executive’s termination of employment with the Company constitute deferred compensation subject to Section 409A, and (ii) Executive is deemed at the time of such termination of employment to be a “specified” employee under Section 409A, then such payment shall not be made or commence until the earliest of (i) the expiration of the six (6)- month period measured from the date of Executive’s “separation from service” (as such term is at the time defined in Treasury Regulations under Section 409A) with the Company; (ii) the date of Executive’s disability (as defined in the Code); or (iii) the date of Executive’s death following such separation from service; provided, however, that such deferral shall only be effected to the extent required to avoid adverse tax treatment to Executive, including (without limitation) the additional twenty percent (20%) tax for which Executive would otherwise be liable under Section 409A(a)(1)(B) in the absence of such deferral. Upon the expiration of the applicable deferral period, any payments which would have otherwise been made during that period (whether in a single sum or in installments) in the absence of this paragraph shall be paid to Executive or Executive’s beneficiary in one lump sum.

12. Proprietary Information. During the Employment Period and thereafter, the Executive shall not, without the prior written consent of the Board of Directors, disclose or use for any purpose (except in the course of his employment under this Agreement and in furtherance of the business of the Company or any of its subsidiaries) any confidential information or proprietary data of the Company. The Proprietary Information Agreement dated January 8, 2002 between the Company and the Executive (the “Employee Agreement”), a copy of which is attached hereto as Exhibit B and incorporated herein by reference, continues in effect in accordance with the terms thereof. In the event of any conflict between the provisions of this Agreement and the Employee Agreement, the provisions of this Agreement shall control.

13. Non-Solicitation. The Executive covenants and agrees with the Company that during his employment with the Company and for a period expiring one year after the date of termination of such employment, he will not solicit any of the Company’s then-current employees or any person employed by the Company within six months prior to such termination,

or the then-current employees of any subsidiary or controlling parent entity (including any person employed within six months prior to such termination by any such subsidiary or controlling entity), to terminate their employment with the Company or such affiliated entity or to become employed by any firm, company or other business enterprise with which the Executive may then be connected.

14. Right to Advice of Counsel; Related Fees. The Executive acknowledges that he has consulted with counsel and is fully aware of his rights and obligations under this Agreement. The Company shall reimburse the Executive for his actual and documented expenses, including legal and accounting/tax consultant fees and costs, reasonably incurred by the Executive in connection with the negotiation and execution of this Agreement.

15. Successors. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such assumption agreement prior to or coincident with the effectiveness of any such succession shall entitle the Executive to the benefits described in Section 10(a) of this Agreement, subject to the terms and conditions therein.

16. Absence of Conflict. The Executive represents and warrants that his employment by the Company as described herein shall not conflict with and will not be constrained by any prior employment or consulting agreement or relationship, except as expressly permitted herein.

17. Assignment. This Agreement and all rights under this Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective personal or legal representatives, executors, administrators, heirs, distributees, devisees, legatees, successors and assigns. This Agreement is personal in nature, and neither of the parties to this Agreement shall, without the written consent of the other, assign or transfer this Agreement or any right or obligation under this Agreement to any other person or entity; except that the Company may assign this Agreement to any of its affiliates or wholly-owned subsidiaries; provided, however, that such assignment will not relieve the Company of its obligations hereunder. If the Executive should die while any amounts are still payable to the Executive hereunder, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee or other designee or, if there be no such designee, to the Executive’s estate.

18. Notices. For purposes of this Agreement, notices and other communications provided for in this Agreement shall be in writing and shall be delivered personally or sent by United States mail, postage prepaid, addressed as follows:


		If to the Executive:		Robert W. Shaw


		If to the Company:		ArcSight, Inc.
				5 Results Way
				Cupertino, CA 95014
				Attention: Chief Financial Officer

or to such other address or the attention of such other person as the recipient party has previously furnished to the other party in writing in accordance with this Section 17. Such notices or other communications shall be effective upon delivery or, if earlier, three days after they have been mailed as provided above.

19. Integration. This Agreement and the Exhibits hereto represent the entire agreement and understanding between the parties as to the subject matter hereof and supersede all prior or contemporaneous agreements, whether written or oral, regarding the subject matter hereof (including, without limitation, the Amended and Restated Employment Agreement dated as of August 13, 2004), except that the Stock option, restricted stock, stock unit or other equity agreements between the Company and the Executive may contain acceleration provisions consistent with the provisions in Section 10(a). No waiver, alteration or modification of any of the provisions of this Agreement shall be binding unless in writing and signed by duly authorized representatives of the parties hereto.

20. Waiver. Failure or delay on the part of either party hereto to enforce any right, power or privilege hereunder shall not be deemed to constitute a waiver thereof. Additionally, a waiver by either party or a breach of any promise hereof by the other party shall not operate as or be construed to constitute a waiver of any subsequent waiver by such other party.

21. Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

22. Headings. The headings of the sections contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of any provision of this Agreement.

23. Applicable Law. This Agreement shall be governed by and construed in accordance with the internal substantive laws, and not the choice of law rules, of the State of California.

24. Counterparts. This Agreement may be executed in one or more counterparts, none of which need contain the signature of more than one party hereto, and each of which shall be deemed to be an original, and all of which together shall constitute a single agreement.

IN WITNESS WHEREOF, each of the patties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year first above written.



		ARCSIGHT, INC.

		By:		/s/ Stewart Grierson

		Title:		CFO
		Date:		9/10/07

		EXECUTIVE:

		/s/ Robert W. Shaw

		Robert W. Shaw

		Date:		9/10/07

EXHIBIT A

LIST OF DIRECTORSHIPS

None

EX-10.11 3 f28075a1exv10w11.htm EXHIBIT 10.11 exv10w11

Exhibit 10.11

Wahoo Technologies, Inc.
301 University Ave. Ste. 440
Palo Alto, CA 94301

June 1, 2000

Hugh Njemanze

Dear Hugh,

This letter will serve as an offer of employment to you with Wahoo Technologies, Inc. (the “Company”) as Vice President of Engineering. You will work in this capacity on a full-time basis, giving your best efforts to the performance of your duties during normal business hours.

Your base salary will be $200,000 per year (the “Base Salary”), payable in installments with our regular Company payroll (currently on the 1st and 15th of every month).

You will be entitled to purchase 1,000,000 restricted shares of the Common Stock of the Company (the “Restricted Stock”), subject to the terms, provisions and restrictions as set forth in a Restricted Stock Purchase Agreement to be entered into by and between you and the Company.

Also, as an employee of the Company, you will be eligible to participate in all medical, dental, hospitalization, accidental death and dismemberment, disability, and any and all other plans as are presently and hereinafter offered by the Company to its executives, including savings, pension, profit-sharing, deferred compensation plans and stock option plans, subject to the general eligibility and participation provisions set forth in such plans.

You will be entitled to three (3) weeks vacation each calendar year, to be taken at such time as you and the Company shall mutually determine.

This employment agreement is intended to be an “at-will” employment agreement. Either you or the Company can terminate this employment agreement for any reason at any time.

In the event that the Company terminates your employment for any reason, you will (a) receive any accrued but unpaid salary and bonuses as of the date of termination, and (b) continue to receive the base salary you were receiving immediately prior to such termination for a period of six (6) months thereafter. In addition, you will retain that portion of the Restricted Stock that has vested as of the date of termination of employment. Your right to continue in any employee benefit or retirement programs, however, will cease upon any termination of your employment except to the extent otherwise required under applicable law. The Company will have no further liability to you hereunder.

In the event that you terminate your employment with the Company for any reason, you will receive any accrued but unpaid salary and bonuses as of the date of termination, and your right to continue in any employee benefit or retirement programs will cease except to the extent otherwise required under applicable law. In addition, you will retain that portion of the Restricted Stock that has vested as of the date of termination of employment. The Company will have no further liability to you hereunder.

Any methodologies, inventions, improvements, discoveries, processes, programs or systems developed or discovered by you relating to the Company’s business or proposed business while you are an employee, whether during working hours or by using the Company’s facilities, equipment or trade secrets, shall be the sole and exclusive property of the Company. You shall execute and deliver such assignments and other documents necessary to vest all right, title and interest of any discovery or development in the Company. The Company may film, videotape, photograph and record your voice and likeness and may utilize your name and likeness in connection with the promotion of the Company without any fee. The Company shall own all rights in any film, videotape, photograph or record of your voice and likeness for such use. You acknowledge receipt of the notice provided by the Company pursuant to the Labor Code of California, Section 2870(a) attached as Exhibit A hereto, the terms of which are incorporated herein by reference.

Independent of any other obligation under this Agreement, during the term of your employment and for period of one (1) year following the termination of employment for any reason, you shall not directly or indirectly on your behalf, or on behalf of any business which provides or sells services or products in competition with the Company: (i) solicit, interfere with, or endeavor to entice away from the Company, or sell products or services which are competitive with the Company’s products or services to, any clients or potential clients of the Company for which you have either performed services, dealt with or obtained knowledge of as a result of your position, or was engaged in sales or promotional efforts with during the last two (2) continuous years of employment; (ii) become employed by or provide services to such clients; or (iii) employ, solicit or endeavor to entice away from the Company any person employed by the Company during your employment. You shall immediately notify the Company of any contact that such client or other party has with you regarding potential employment.

You shall not disclose to any third party or use in competition with the Company any of the Company’s confidential information or trade secrets, or that of its clients (including but not limited to information and knowledge developed by you alone or with others). Upon termination or upon demand by the Company, you shall promptly turn over to the Company all files, documents, lists of clients and any other materials obtained from the Company or developed during the course of employment.

You shall not disclose the terms of this employment agreement to any business competitive with the Company that you become associated with. You agree and warrant that you are not under any obligation, or have fully informed the Company of any obligation, that would conflict with the obligations of this employment agreement or impede your ability to carry out the functions of your position with the Company.

The Company shall be entitled to injunctive relief for any breach or threatened breach of this employment agreement in addition to any other rights or remedies at law or equity. The parties agree that any such breach would cause irreparable injury to the Company and that money damages would not provide an adequate remedy. Employee shall pay reasonable attorneys’ fees, court costs and expenses incurred by the Company in enforcing any provision in this employment agreement due to your breach or anticipated breach.

This employment agreement (i) constitutes the entire understanding between the Company and you regarding employment and supersedes, voids and replaces any prior agreements, arrangements and communications, whether oral or written, made by and between the Company and you and (ii) shall be construed in accordance with the laws of the State of California without application of conflicts of laws principles.

This employment agreement is be governed by California law applicable to contracts wholly executed and performed within that State.

To indicate your acceptance of the Company’s offer, please sign and date this letter in the space provided below and return it to me. A duplicate original is enclosed for your records. This letter, along with the agreement relating to proprietary rights between you and the Company, set forth the terms of your employment with the Company and supersede any prior representations or agreements, whether written or oral. This letter may not be modified or amended except by a written agreement, signed by an officer of the Company and by you.

Sincerely,


/s/ Alex Daly
Alex Daly
Chairman, CEO and President
WAHOO TECHNOLOGIES, INC.

Agreed and Acknowledged on June 1, 2000


/s/ Hugh Njemanze
Hugh Njemanze

EX-10.12 4 f28075a1exv10w12.htm EXHIBIT 10.12 exv10w12

Exhibit 10.12


ArcSight		1309 South Mary Avenue
		Sunnyvale CA 94087
		T 408.328.5500
		f 408.749.8700
		www.arcsight.com

January 24, 2003

Mr. Stewart Grierson

Dear Stewart:

This letter will serve as an offer of employment to you with ArcSight, Inc. as Vice President Finance. You will work in this capacity on a full-time basis.

In this position, your salary will be $11,666.66 per month, earned and paid semi-monthly.

In addition, subject to approval of the Company’s Board of Directors or its Compensation Committee you will be granted an option to acquire 200,000 shares of the Company’s Common Stock at an exercise price equal to the fair market value of the shares on the date the option is granted or your first date of employment, whichever is later. The option will be immediately exercisable, but the unvested portion of the purchased shares will be subject to repurchase by the Company at the exercise price in the event that your service terminates for any reason before you vest in the shares. You will vest in 25% of the option shares after 12 months of continuous service, and the balance will vest in equal monthly installments over the next 36 months of continuous service, as described in your Stock Option Agreement.

If the Company is subject to a Change in Control (as defined in the Plan) before your service with the Company terminates and you are subject to an Involuntary Termination within 6 months after that Change in Control, then; you shall become vested in an additional 50% of the unvested option shares as of your termination date; and (ii) the Company will pay you severance pay and reimburse you for the COBRA premiums paid by you to continue the health care coverage in effect for you and your eligible dependants for a period of three (3) months following the termination of your employment. Your severance pay will be at the rate of your base salary in effect at the time of the termination of your employment and in accordance with the Company’s standard payroll procedures. However, this paragraph (4) will not apply unless you (i) sign a general release of claims (in a form prescribed by the Company,) and (ii) have returned all Company property.

“Involuntary Termination” means (a) that your service is terminated by the Company without Cause; (b) that you resign within thirty (30) days after the scope of your job responsibilities or authority was materially reduced without your written consent; or (c) receipt of notice that your principal workplace will be relocated 100 miles or more from its location at the time of notice.

“Cause” means (a) any breach of this letter agreement, the Proprietary Information and Inventions Agreement between you and the Company, or any other written agreement between you and the Company, (b) any failure to comply with the Company’s written policies or rules, as they may be in effect from time to time during your employment; (c) commission, conviction of, or a plea of “guilty” or “no contest” to, a felony under the laws of the United States; (d) neglect of duties; or (e) misconduct.

As an employee, you will be eligible to participate in health and welfare benefits in accordance with ArcSight, Inc.’s standard plan. In addition, you will accrue up to three (3) weeks (15 days) of vacation per year pursuant to ArcSight, Inc.’s vacation policy.

You are required to follow ArcSight, Inc.’s policies and practices. You will also have access to certain of ArcSight, Inc.’s trade secrets, staff, customers, and confidential and proprietary information. Accordingly, we ask that you sign the attached Proprietary Information and Inventions agreements.

While you render services to the Company, you agree that you will not engage in any other employment, consulting or other business activity without the prior written consent of the Company. While you render services to the Company, you also will not assist any person or entity in competing with the Company, in preparing to compete with the Company or in hiring any employees or consultants of the Company.

Please understand that your employment at ArcSight, Inc. is for no specified period of time. It is an at-will employment relationship, and either you or ArcSight, Inc. may terminate the relationship at any time, for any reason, with or without cause. This paragraph is intended to be the complete and exclusive statement regarding the circumstances under which your employment may be terminated. It supersedes any prior agreement or representation. If any term of this paragraph conflicts with any practice or policy of ArcSight, Inc., now or in the future, the terms of this paragraph will control. The terms of this paragraph may not be changed except by written agreement signed by you and the President of ArcSight, Inc.

This offer is contingent upon your completion and execution of all employment documents, as well as your ability to provide proof of identification and authorization to work in the United States, (within three business days of your start date of January 29, 2003) and upon the completion and acceptance of all information related to your background check, even if this information is not known until after your employment commences.

This offer of employment will expire midnight January 27, 2003 unless accepted by you on the terms contained herein.

Finally, this offer letter sets forth all the material terms of your employment. By signing it, and thereby accepting employment at ArcSight, Inc., you acknowledge that you have not relied upon any other written or oral statements concerning the terms of your employment.

Please indicate your agreement with the terms of this letter by signing and dating two (2) copies each of both the enclosed duplicate originals of this letter agreement and the Proprietary Information and Inventions Agreements and returning them to me.

We’re glad to have you on board!


		Sincerely,

		/s/ Robert W. Shaw
		Robert W. Shaw
		President and CEO
		ArcSight, Inc.

I, Stewart Grierson, accept this offer:


/s/ Stewart Grierson

Date:		1/27/03

EX-10.13 5 f28075a1exv10w13.htm EXHIBIT 10.13 exv10w13

Exhibit 10.13

February 26, 2004

Mr. Kevin Mosher

Dear Kevin:

This letter will serve as an offer of employment to you with ArcSight, Inc. as Senior Vice President World Wide Field Operations, reporting directly to the President and Chief Executive Officer. You will work in this capacity on a full-time basis.

In this position, your base salary will be $20,833.33 per month, earned and paid semi-monthly.

You will be entitled to earn a commission on sales completed by the Company under your direction. Your on-target earnings (OTE) including base salary and commission, will be $400,000 annualized at 100% of your Commission Plan. Your “Commission Plan” for the balance of calendar year 2004 is bookings T B D (this amount to be determined in consultation with Robert W. Shaw, President and CEO on or before your start date), minus actual bookings for the period January 1, 2004 through your start date. A commission ladder will be determined in consultation with Robert W. Shaw on or before your start date.

Also, subject to approval of the Company’s Board of Directors or its Compensation Committee you will be granted an option to acquire 1,500,000 shares of the Company’s Common Stock at an exercise price equal to the fair market value of the shares on the date the option is granted or your first date of employment, whichever is later. The option will be immediately exercisable, but the unvested portion of the purchased shares will be subject to repurchase by the Company at the exercise price in the event that your service terminates for any reason before you vest in the shares. You will vest in 25% of the option shares after 12 months of continuous service, and the balance will vest in equal monthly installments over the next 36 months of continuous service, as described in your Stock Option Agreement.

If the Company is subject to a Change in Control (as defined in the Plan) before your service with the Company terminates and you are subject to an Involuntary Termination within 12 months after that Change in Control, then the vested percentage of your option shares will be determined by adding 24 months to the actual period of service that you have completed with the Company; and (ii) the Company will pay you severance pay and reimburse you for the COBRA premiums paid by you to continue the health care coverage in effect for you and your eligible dependants for a period of twelve (12) months following the termination of your employment. Your severance pay will be at the rate of your base salary in effect at the time of the termination of your employment and in accordance with the Company’s standard payroll procedures.

However, this paragraph (4) will not apply unless you (i) sign a general release of claims (in a form prescribed by the Company,) and (ii) have returned all Company property.

As an employee, you will be eligible to participate in a number of Company sponsored benefits in accordance with ArcSight, Inc.’s benefit plans. In addition, you will accrue up to three (3) weeks (15 days) of vacation per year pursuant to ArcSight, Inc.’s vacation policy.

You are required to follow ArcSight, Inc.’s policies and practices. You will also have access to certain of ArcSight, Inc.’s trade secrets, staff, customers, and confidential and proprietary information. Accordingly, your employment is contingent upon you signing the attached Proprietary Information and Inventions Agreement.

Your employment at ArcSight, Inc. is for no specified period of time. It is an at-will employment relationship, and either you or ArcSight, Inc. may terminate the relationship at any time, for any reason, with or without cause. This paragraph is intended to be the complete and exclusive statement regarding the circumstances under which your employment may be terminated. It supersedes any prior agreement or representation. If any term of this paragraph conflicts with any practice or policy of ArcSight, Inc., now or in the future, the terms of this paragraph will control. The terms of this paragraph may not be changed except by written agreement signed by you and the President of ArcSight, Inc.

This offer is contingent upon your completion and execution of all employment documents, as well as your ability to provide proof of identification and authorization to work in the United States, (within three business days of your start) and upon the completion and acceptance of all information related to your references and background check, even if this information is not known until after your employment commences.

This offer of employment will expire midnight February 27, 2004, unless accepted by you on the terms contained herein.

You and the Company agree to waive any rights to a trial before a judge or jury and agree to arbitrate before a neutral arbitrator any and all claims or disputes arising out of this letter agreement and any and all claims arising from or relating to your employment with the Company, including (but not limited to) claims against any current or former employee, director or agent of the Company, claims of wrongful termination, retaliation, discrimination, harassment, breach of contract, breach of the covenant of good faith and fair dealing, defamation, invasion of privacy, fraud, misrepresentation, constructive discharge or failure to provide a leave of absence, or claims regarding commissions, stock options or bonuses, infliction of emotional distress or unfair business practices.

The arbitrator’s decision must be written and must include the findings of fact and law that support the decision. The arbitrator’s decision will be final and binding on both parties, except to the extent applicable law allows for judicial review of arbitration awards. The arbitrator may award any remedies that would otherwise be available to the parties if they were to bring the dispute in court. The arbitration will be conducted in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association; provided, however that the arbitrator must allow the discovery authorized by the California Arbitration Act or the discovery that the arbitrator deems necessary for the parties to vindicate their respective claims or defenses. The arbitration will take place in Santa Clara County, California, or, at your option, the county in which you primarily worked with the Company at the time when the arbitrable dispute or claim first arose.

The Company will pay the costs of arbitration, and the arbitrator may award attorney’s fees to the prevailing party.

If an arbitrator or court of competent jurisdiction (the “Neutral”) determines that any provision of this arbitration provision is illegal or unenforceable, then the Neutral shall modify or replace the language of this arbitration provision with a valid and enforceable provision, but only to the minimum extent necessary to render this arbitration provision legal and enforceable.

We hope that you will accept our offer to join the Company. You may indicate your agreement with the terms of this letter by signing and dating two (2) copies each of this letter agreement and the enclosed Proprietary Information and Inventions Agreements and returning one set to me.

We look forward to having you on board!

Sincerely,

/s/ Robert W. Shaw
Robert W. Shaw
President and CEO
ArcSight, Inc.

I, Kevin Mosher, have read and accept this offer:

EX-10.14 6 f28075a1exv10w14.htm EXHIBIT 10.14 exv10w14

Exhibit 10.14

October 5, 2006

Tom Reilly

Dear Tom:

This letter will serve as an offer of employment to you with ArcSight, Inc. as ArcSight’s Chief Operating Officer. You will work in this capacity on a full-time basis, giving your best efforts to the performance of your duties.

In this position, your salary will be $25,000 per month, earned and paid semi-monthly. Additionally you will be eligible to receive up to 35% of annual base salary, at plan, in the form of an annual bonus and up to a maximum of 100% in the event the Company exceeds certain milestones. This will be paid if both you and the Company achieve certain milestones. These milestones will be communicated to you shortly after you join ArcSight. You may begin to participate in ArcSight’s bonus plan beginning Fiscal Year 2007 (5/1/06 – 4/30/07) prorated from start date.

In addition, subject to approval of the Company’s Board of Directors or its Compensation Committee, you will be granted an incentive stock option, to the extent allowed under the Internal Revenue Code, to acquire 3% (as of 10/5/06) of all issued and outstanding shares of the Company’s Common Stock and Preferred Stock, on a fully exercised and as converted basis, and all issued and outstanding securities convertible into, exercisable for or providing the right to acquire the Company’s Common Stock or Preferred Stock, at an exercise price equal to the fair market value of the shares on the date the option is granted or your first date of employment, whichever is later. The option will be immediately exercisable, but the unvested portion of the purchased shares will be subject to repurchase by the Company at the exercise price in the event that your service terminates for any reason (subject to the paragraph below regarding additional vesting after an Involuntary Termination following a Change in Control) before you vest in the shares. You will vest in 25% of the option shares after 12 months of continuous service, and the balance will vest in equal monthly installments over the next 36 months of continuous service, as described in your Stock Option Agreement.

In addition you will be granted an incentive stock option, to the extent allowed under the Internal Revenue Code, to acquire 1% (as of 10/5/06) of all issued and outstanding shares of the Company’s Common Stock and Preferred Stock, on a fully exercised and as converted basis, and all issued and outstanding securities convertible into, exercisable for or providing the right to acquire the Company’s Common Stock or Preferred Stock, at an exercise price equal to the fair market value of the shares on the date the option is granted or your first date of employment, whichever is later. The option will be immediately exercisable, but the unvested portion of the purchased shares will be subject to repurchase by the Company at the exercise price in the event that your service terminates for any reason (subject to the paragraph below regarding additional vesting after an Involuntary Termination following a Change in Control) before you vest in the shares. Subject to achieving certain performance milestones within the

Tom Reilly
October 5, 2006
Page 2

first twelve months of your employment with the Company you will vest in 25% of the option shares after 12 months of continuous service, and the balance will vest in equal monthly installments over the next 36 months of continuous service, as described in your Stock Option Agreement. These performance milestones will be communicated to you shortly after you join ArcSight.

If the Company is subject to a Change in Control (as defined in the ArcSight, Inc. 2002 Stock Plan) prior to the first anniversary of your employment start date before your service with the Company terminates and you are subject to an Involuntary Termination (as defined in your Notice of Stock Option Grant) within twelve months after that Change in Control, then you shall become vested in an additional 50% of the unvested option shares as of your termination date. Should the Change of Control occur on or after the first anniversary of your employment start date and you are subject to an Involuntary Termination (as defined in your Notice of Stock Option Grant) within twelve months after that Change in Control then you shall become vested in 100% of your options as of your termination date. In addition, following the Involuntary Termination, the Company will pay you severance pay for a period of twelve (12) months following the termination of your employment. Your severance pay will be at the rate of your base salary in effect at the time of the termination of your employment and in accordance with the Company’s standard payroll procedures, provided that such severance pay will be paid in a manner to be exempted under, or compliant with, Section 409A of the Internal Revenue Code. However, this paragraph will not apply unless you (i) sign a general release of claims (in a form reasonably prescribed by the Company,) and (ii) have returned all Company property.

As an employee, you will be eligible to participate in health and welfare benefits in accordance with ArcSight, Inc.’s standard plan. In addition, you will accrue three (3) weeks (15 business days) of vacation per year pursuant to ArcSight, Inc.’s vacation policy.

Tom Reilly
October 5, 2006
Page 3

may be terminated. It supersedes any prior agreement or representation. If any term of this paragraph conflicts with any practice or policy of ArcSight, Inc., now or in the future, the terms of this paragraph will control. The terms of this paragraph may not be changed except by written agreement signed by you and the President of ArcSight, Inc.

This offer is contingent upon your completion and execution of all employment documents, as well as your ability to provide proof of identification and authorization to work in the United States, (within three business days of your start date) and upon the completion and acceptance of all information related to your background check, even if this information is not known until after your employment commences

This offer will expire at the end of business day on October 9, 2006, unless accepted by you on the terms contained herein.

Please indicate your agreement with the terms of this letter by signing and dating one (1) copy each of both the enclosed offer letter and the enclosed Proprietary Information and Inventions Agreement and returning them to me.

We look forward to having you on board!

Sincerely,

/s/ Robert Shaw
Robert Shaw
Chairman & CEO
ArcSight, Inc.

I, Tom Reilly, accept this offer:

EX-10.15 7 f28075a1exv10w15.htm EXHIBIT 10.15 exv10w15

Exhibit 10.15

Fiscal Year 2007 Management and Employee Bonus Plan

OBJECTIVE: To establish a bonus plan that motivates employees to focus on delivering corporate objectives.

STRUCTURE: There are two components to the plan:

1. Cash bonus

All employees who do not otherwise receive variable compensation will be eligible to participate in the cash bonus plan, as described below. Each eligible employee’s actual participation level will be determined by their individual performance.

2. Equity grants

Only Company executives will be eligible to participate in equity rewards on achievement of the Revenue Target (as defined below). The Compensation Committee will determine the number of options allocated to Mr. Shaw and then the Compensation Committee, with input from Mr. Shaw, will determine the allocation among the rest of the executive team. Options will vest according to standard vesting terms over four years.

TARGET: Fiscal 2007 revenue target is $60,516,936 (the “Revenue Target”).

CASH BONUS PLAN: Cash bonus available will be based on a percentage of an employee’s base salary as follows:

1. Executives:


Percentage of Base Salary		Revenue
0%		<90% of Revenue Target.

26.25%		≥90% of Revenue Target and <100% of Revenue Target

35%		≥100% of Revenue Target and <101% of Revenue Target

36.75%		≥101% of Revenue Target and <105% of Revenue Target

38.75%		≥105% of Revenue Target and <110% of Revenue Target

42%		≥110 % of Revenue Target and <120% of Revenue Target

43.75%		≥120% of Revenue Target

If the Company achieves at least 100% of the Revenue Target, an additional cash bonus pool equal to 17% of the Company’s operating margin for fiscal year 2007 will be paid to executives on a pro rata basis based on their portion of total bonuses paid to executives, with a cap at 100% of base salary for all payments under both the payments described in the table above and payments described in this paragraph.

2. Director level employees:


Percentage of Base Salary		Revenue
0%		<90% of revenue target

11.25%		≥90% of revenue target and <100% of revenue target

15%		≥100% of revenue target

3. All other employees:


Percentage of Base Salary		Revenue
0%		<90% of revenue target

7.5%		≥90% of revenue target and <100% of revenue target

10%		≥100% of revenue target

EQUITY BONUS PLAN: A pool of 1,205,620 shares of common stock is available only to executives on achievement of at least 100% of the Revenue Target, to be allocated as described above in “Structure; Equity grants.”

EX-10.16 8 f28075a1exv10w16.htm EXHIBIT 10.16 exv10w16

Exhibit 10.16

***** CONFIDENTIAL TREATMENT REQUESTED

Sales Commission Plan

FY2007

Kevin Mosher

Senior Vice President, World Wide Field Operations


*****		The omitted portions of this exhibit have been filed with the Securities Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Section Act of 1933.

OBJECTIVES

This ArcSight Sales Commission Plan FY 2007 (“agreement”) describes the terms of your sales commission compensation at ArcSight (the “Company”) for the Plan Year, which is intended to achieve the following objectives:

	•		Increase sales for the Company’s services and products.

	•		Reward consistent achievement and over plan performance.

	•		Reward sales personnel for their contribution to the achievement of Company objectives.

	•		Attract and retain an effective sales team.

DEFINITIONS

	1.		Commission – Opportunity for compensation in addition to the base salary established in a salesperson’s employment offer letter. A component of Commissions is based on GAAP Revenue derived from the sale of the Company’s services and products and another component is based on the operating costs or Contribution Margin of the Sales Organization.

	2.		Term Sheet – Document that is not legally binding used to explain a prospective customer sale among ArcSight employees, and optionally to propose and negotiate with customers to achieve an agreement in principle. A Term Sheet alone does not constitute a Sales Contract or Booking.

	3.		Sales Contract – Comprehensive set of legally binding documents and required approvals and signatures associated with each Revenue Transaction, generally a purchase and license agreement signed by ArcSight and the customer. Sales Contracts typically include the following items:

	a.		Software License Fees – Revenue items associated with licensing of software products.

	b.		Service Fees – Revenue items associated with sale of consulting and installation projects that are normally billed as time and materials. Expenses incurred in the performance of Services are billed to the customer. These expenses are not counted towards Revenue for the purpose of calculating Commissions.

	c.		Support Fees – Revenue items associated with ongoing maintenance and support.

Revenue – Represents the amount recognized by the Company on its financial statements from the sale of products and services, in accordance with Generally Accepted Accounting Principles (“GAAP”).

The Corporate Controller and Chief Financial Officer have final authority in determining whether a sales transaction constitutes Revenue.

Plan Year – FY2007 (May 1, 2006 – April 30, 2007)

	6.		Cash Collection – Receipt of payment from a customer in a recognized form including a bank draft, bank deposit, or approved promissory note.

	7.		Contribution Margin – Represents the net amount resulting from the subtraction of Sales operating costs from Revenue.

COMMISSION PAYMENTS

Sales Representatives are eligible to earn Commissions in addition to base salary. A Portion of Commissions are deemed earned upon the recognition of revenue in accordance with GAAP. A secondary portion of commissions are earned upon achieving a pre-determined operating expense or contribution margin level.

SALES PROCESS

The required process for arriving at a Sales Contract is to develop a complete Term Sheet, thoroughly discuss the terms among the ArcSight Team, and gain approval by the Vice President of Sales prior to discussing terms with the customer. The Term Sheet documents can be presented to the customer if helpful to the sales process, but this is not a required step.

The Term Sheet format is prescribed by the Vice President of Sales, and will generally include the following items: customer contacts (buyer, sponsor, invoicing, and legal), a detailed inventory of items to be sold and related pricing drivers, a pricing model, a price discount schedule, press release and public relations terms, conditional terms such as customer acceptance criteria and performance milestones, a services statement of work, and invoice and payment terms.

All prospective Sales Contracts must be presented to the Chief Financial Officer to gain approval of terms and customer’s credit worthiness. The Sales Contract is the final, conclusive document, which is required and must thoroughly reflect all terms and commitments.

CALCULATION OF COMMISSIONS

The Senior Vice President, Worldwide Field Operation’s commissions are calculated based on the achievement of both quarterly revenue targets as well as operating costs or contribution margin targets. The revenue achievement target represents ***** of the commission structure while a ***** component is based on operating costs or contribution margin.

Revenue Portion: Each quarter the commission amount attributable to Revenue will be determined by multiplying the quarterly Revenue by the commission rate documented below. The commission rate will depend on the actual Revenue achievement as a percentage of the quarterly revenue target.


*****		The omitted portions of this exhibit have been filed with the Securities Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.

Operating expense/Contribution margin Portion: Each quarter the commission amount attributable to operating expense/contribution margin will be determined by either incurring actual sales operating expenses less than or equal to the sales operating expense target or achieving actual sales contribution margins equal to or greater than the sales contribution margin target. The quarterly commission amount will vary depending on the level of revenue achieved relative to the quarterly revenue target. For example in Q1, if the Revenue achieved equaled 102% of the Revenue target and the actual operating costs were less than target or the actual contribution margin was greater than target, then the commission amount would be $11,250.


Annual Revenue Quota			*****
Annual Variable Compensation			*****


	Q1			Q2			Q3			Q4			FY 2007
Variable Compensation based on Revenue target	$	*****		$	*****		$	*****		$	*****		$	*****
Variable Compensation based on operating expense or Contribution margin target	$	*****		$	*****		$	*****		$	*****		$	*****

Total Variable Compensation	$	*****		$	*****		$	*****		$	*****		$	*****


Revenue target	$	*****		$	*****		$	*****		$	*****		$	*****
Operating expense target	$	*****		$	*****		$	*****		$	*****		$	*****

Contribution margin target	$	*****		$	*****		$	*****		$	*****		$	*****

Commission rates for Revenue Portion:
0 - 100%		0.21	%		0.20	%		0.17	%		0.16	%
100% - 105%		2.06	%		2.00	%		1.72	%		1.56	%
105% - 110%		3.12	%		3.00	%		2.59	%		2.34	%
>110%		4.00	%		4.00	%		4.00	%		4.00	%

Commission for Operating expense/Contribution margin Portion:
100%	$	7,500		$	7,500		$	7,500		$	7,500		$	30,000
100% - 105%	$	11,250		$	11,250		$	11,250		$	11,250		$	45,000
105% - 110%	$	16,875		$	16,875		$	16,875		$	16,875		$	67,500
> 110%	$	22,500		$	22,500		$	22,500		$	22,500		$	90,000


*****		The omitted portions of this exhibit have been filed with the Securities Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.

ADDITIONAL TERMS

	A.		Payout. Commissions are payable at the end of the month following each fiscal quarter. Upon termination of employment, a salesperson only will be paid Commissions earned as of the date of termination. Commissions will not be advanced.

	B.		Dispute Resolution. Disagreements or disputes between ArcSight and any salesperson arising out of or relating to interpretation of the Sales Commission Plan shall be submitted to the Chief Financial Officer or CEO (or designate) for resolution. The Chief Financial Officer or CEO (or designate) shall decide the issue in their sole discretion. Such decision will be final and binding.

	C.		Extended Absences. To earn Commission, the salesperson must be actively managing the account. If the salesperson is out of the office, on extended vacation, on leave, e.g., for more than three or four weeks, excluding holidays, commission, at the discretion of the Vice President of Sales, may be transitioned to a new salesperson who will be able to support those accounts.

	D.		Modifications. The Company can modify this agreement upon 30 days written notice to applicable sales team members. Modifications will apply only to future business in that sales transactions that have completed or are substantially near completion will not be impacted.

	E.		Right to Recover. All advanced but unearned commission shall be subject to charge-back or recoupment by the Company if the Company fails for any reason to receive payment in full on any revenue for sales of Company products or services attributable to an employee. Reasons for charge-back may include but are not limited to the customer’s failure to pay, credit memo’s, refunds or allowances by the Company, cancellation of a Sales Contract, retroactive reduction of the amount paid by the customer, initiation of legal action to collect money owed under a Sales Contract, or other default. A charge-back will reduce Commission and the revenue levels used to determine performance against quota objectives by the amount canceled, reduced, written off or owed. The Company also reserves the right to deduct from a salesperson’s Commissions for the costs or revenue lost due to unauthorized changes in orders or specifications, and/or unauthorized indirect discounts attributable to that salesperson.

			If this results in a negative Commission balance, the negative balance will carry forward and offset against future incentives until the negative balance is eliminated.

			As a condition of eligibility for Commissions, the employee agrees to reimburse the Company for Commissions paid in excess of what the employee has earned under this agreement, and hereby consents to payroll deduction for purposes of such reimbursement.

	F.		Ethical and Legal Standards.

No employee may pay, offer to pay or give any of their incentive compensation or any other money to any agent, customer or representative of the customer or any other person as an inducement or reward for assistance in making a sale.

	2.		Gifts and entertainment above a nominal amount shall not be given to customers, agents or representatives except in accordance with current ArcSight policies and procedures.

	3.		No ArcSight employee shall enter into any understanding, agreement, plan or scheme, express or implied, formal or informal, with any competitor in regard to prices, terms, or conditions of sales, distribution, territories or customers, nor engage in any other conduct which in the opinion of ArcSight’s legal counsel violates any of the anti-trust and/or trade regulation and/or practices.

	4.		Any failure to adhere to ArcSight’s ethical and legal standards or of other generally recognized ethical and legal business standards will subject an employee to revocation of any Commission or other compensation as provided by this or any other agreement to which the employee might otherwise be entitled. In addition, any such infraction will subject the employee to disciplinary action, up to and including termination.

	G.		No Effect On Employment. This agreement is not intended to, nor does it in any way, detract from the at-will relationships of the parties.

	H.		Confidentiality. This agreement is deemed confidential to the Company.

Delivered and explained by:

(ArcSight executive name, position, date)

(Signature)

Received and agreed by:

(ArcSight salesperson, position, date)

(Signature)

EX-10.18 9 f28075a1exv10w18.htm EXHIBIT 10.18 exv10w18

Exhibit 10.18

*****CONFIDENTIAL TREATMENT REQUESTED

ORACLE PARTNERNETWORK
EMBEDDED SOFTWARE LICENSE DISTRIBUTION AGREEMENT

This Embedded Software License Distribution Agreement (“agreement”) includes the terms and definitions set out below and any orders and/or monthly reports you submit. This agreement is not effective until accepted by Oracle. If accepted, Oracle will notify you and the terms of this agreement will govern.

A. Agreement Definitions

“You” and “your” refer to the entity that has entered into this agreement with Oracle USA, Inc. (“Oracle”) to distribute Oracle’s programs with the application package and your majority owned subsidiaries. You warrant that you have the authority to bind your majority owned subsidiaries to the terms of this agreement and any applicable order with Oracle and/or report and further warrant that you shall be responsible for a breach of such terms by your majority owned subsidiaries. The term “programs” refers to the versions of the software products owned or distributed by Oracle set forth on Exhibit A which you order from Oracle for development, trial, or demonstration purposes as provided below, and for distribution to an end user embedded with the application package as provided in this agreement, including program documentation and any program updates acquired through technical support. The term “programs” does not include any Oracle E-Business Suite programs. The term “technical support” consists of Software Updates, Product Support, and/or other annual technical support services you have ordered. The term “services” refers to technical support or other services which you have ordered. The term “distribution rights” refers to the right to duplicate the programs you obtain from Oracle to distribute to an end user embedded with the application package under the terms of this agreement. The term “end user” refers to a third party that is licensed to use the application package with the programs for its own business operations subject to the terms of an end user license agreement as further provided for in this agreement. The term “application program” refers to the application program or physical device developed by you which is developed to run on Oracle and complies with the following requirements: (a) the application program or physical device must be commercially available and must be included in your standard product catalog or price list; (b) the application program or physical device must be accompanied by end user documentation; and (c) the application program or physical device must be commercially available to multiple end users and must not be intended for the exclusive use of a specific end user or groups of end users. The term “application package” refers to your application program, described in the applicable application package registration form, with which the programs are to be embedded and distributed to an end user. You must complete a separate application package registration form for each application package. The term “end user license agreement” refers to a legally binding written agreement (a) granting an and user the right to use the programs, (b) which is compliant with the terms of this agreement, and (c) which becomes effective upon the execution of an order between you and an end user. The term Oracle PartnerNetwork refers to Oracle’s partner program that provides access to specified Oracle services, tools and resources. You can access the Oracle PartnerNetwork at http://partner.oracle.com. The term “embedded” refers to the following requirements, with which the application package must comply:


*****		The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.

	(a)		*****;

	(b)		*****;

	(c)		*****;

	(d)		*****;

	(e)		*****;

	(f)		*****;

	(g)		*****;

	(h)		As you deem necessary, you will provide customer service, support, and education for all program operations to the end user. If you discontinue to provide customer service, support, or education for your application package to the end user, Oracle will not be obligated to provide ongoing service, support, or education to the end user. You will notify Oracle of your intention to discontinue any support services provided by you to the end user;

	(i)		Only you can access the programs directly for purposes of technical assistance to your end user and such access is limited to providing technical assistance, including troubleshooting, problem resolution, and support assistance. You shall not provide remote or onsite program administration tasks on behalf of the end user that are otherwise prohibited under the terms of this agreement;

	(j)		The embedded programs and the application program must be priced together on your standard price list and on the end user’s invoice as the price of the application package, and must not be distributed separately; and

	(k)		The embedded Oracle programs must not be distributed with the application program under any other Oracle distribution agreement.

B. Distribution Rights

You must be a member of the Oracle PartnerNetwork in order to distribute programs. Oracle grants you a nonexclusive, nontransferable right to duplicate the programs you order from Oracle under this agreement and a nonexclusive right to distribute such programs to end users pursuant to an end user’s order to you as part of the application package. Prior to distributing programs, you must obtain an order from the end user for the programs ordered, which order and programs shall be subject to a valid end user license agreement. You may distribute only the programs for which you have previously acquired a supported development license. Each distributed program must be used only for the business operations of the end user and must be used only in conjunction with the application package. Each distributed program shall be subject to the terms of this agreement and the terms provided in the end user license agreement. You may distribute the application package to yourself or your affiliated entities and you or such entity shall be


*****		The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.

considered an end user under this agreement provided that (1) the total fees paid to Oracle for such programs do not exceed 20% of the total fees paid to Oracle under this agreement, (2) you comply with the requirements of Section I (License Agreement), and (3) you report such distribution in accordance with Section H (Reporting). The programs must be embedded with your application program and distributed with your application program and cannot be provided separately. Program documentation for the programs you order and distribute is either shipped with the programs, or the documentation may be accessed online at http://oracle.com/contracts. Some programs also may include any source code Oracle may provide as part of its standard shipment of such programs, which source code shall be governed by the terms of this agreement. You must provide the following legend on the sign on screen of the application package, or if the application package is a physical device, you must provide the legend on the label for the media containing the programs and your application program: “The programs included herein are subject to a restricted use license and can only be used in conjunction with this application.”

C. Development Licenses

You may order development licenses for the programs for your use pursuant to which Oracle grants you a nonexclusive, nontransferable limited license to use the programs to (a) demonstrate, develop or prototype hardware or software products or services for potential commercial distribution with programs, (b) provide technical support for employees and end users solely in connection with the application package, and (c) provide training for the application package to employees and end users who have licensed the application package. Development licenses may not be used for the purpose of developing or administering hardware, software products, or providing services specific to an end user regardless of whether you receive any fees for doing so, unless you are prototyping or providing a proof of concept to secure an end users intent to purchase Oracle programs. Your use of the development licenses shall be subject to the terms of this agreement and the terms provided in the applicable order with Oracle.

D. Trial Licenses

Oracle grants you a nonexclusive license for you and your distributors to distribute to end users a combined total of ***** trial licenses at any one time for the end users’ own internal evaluation purposes (and not for development, prototype, training or technical support purposes). Trial licenses shall be for ***** days and shall be subject to the terms of this agreement and the terms provided in the order. If your end users want to use programs for which they have obtained a trial license for more than ***** days, they must obtain an appropriate license and pay the appropriate fees; you must pay Oracle a fee for any trial licenses that you distribute that extend for more than ***** days. Programs licensed for trial purposes are provided “as is” and Oracle does not provide technical support or any warranties for these programs.

E. Demonstration Licenses

You may order demonstration licenses for the programs for your use pursuant to which Oracle grants you a nonexclusive, nontransferable (except with respect to your distributors as provided


*****		The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.

in this agreement) license for you and your distributors to use the programs to (a) demonstrate the programs to potential end users solely in connection with the application package and (b) provide training for employees and end users solely in connection with the application package. Demonstration licenses shall be subject to the terms of this agreement and the terms provided in the applicable order with Oracle.

F. Distributors

You may appoint distributors to distribute the programs embedded with your application package as provided under the terms of this agreement. Distributors have no right to make copies of the programs and shall obtain all programs from you. Each distributor must be subject to a legally binding written agreement between you and the distributor that (a) allows the distributor to distribute the application package to end users, (b) contains or incorporates provisions which are equivalent to the terms of this agreement, and (c) permits you to audit your distributors’ activities under such agreement and report such activities to Oracle or assign your right to audit the distributors’ activities to Oracle. In addition, the agreement with your distributors shall require the distributors to distribute the programs subject to terms that are consistent with the terms of this agreement. Any distribution of the programs by your distributors shall be subject to an end user license agreement between you and the end user as set forth in Section I (License Agreement) of this agreement. You shall keep the appointment of each distributor (its name and address) and executed distributor agreements for Oracle to inspect upon request. You shall defend and indemnify Oracle from all claims and for all damages arising out of the activities of your distributors.

G. Ownership and Restrictions

Oracle retains all ownership and intellectual property rights to the programs and anything developed by Oracle and delivered to you resulting from the services. You and each end user may make a sufficient number of copies of each program for the licensed use and one copy of each program media. You may permit your agents and contractors to use the programs for the demonstration and development purposes set forth herein, subject to the terms of this agreement and you are responsible for their compliance with this agreement in such use.

You may not:

•		duplicate and/or distribute the programs unless embedded with the application package;

•		use the programs for your own business operations except as provided in this agreement;

•		remove or modify any program markings or any notice of Oracle’s proprietary rights;

•		rent, lease, or timeshare the programs, or provide subscription services for the programs, or permit your end user to do so (unless such access is expressly permitted for the specific program license the end user has acquired), or distribute the programs in any manner except as provided under this agreement;

•		cause or permit reverse engineering (unless required by law for interoperability), disassembly, or decompilation of the programs;

•		disclose results of any program benchmark tests without Oracle’s prior written consent;

•		engage in any deceptive or misleading practices that may be detrimental to Oracle or to the programs; or

•		permit end users to install the programs separately and independently from the application package.

“Open Source” software — software available without charge for use, modification and distribution — is often licensed under terms that require the user to make the user’s modifications to the Open Source software or any software that the user “combines” with the Open Source software freely available in source code form. If you use Open Source software in conjunction with the programs, you must ensure that your use does not: (i) create, or purport to create, obligations of Oracle with respect to the programs; or (ii) grant, or purport to grant, to any third party any rights to or immunities under Oracle’s intellectual property or proprietary rights in the programs. For example, you may not develop a software program using a program and an Open Source program where such use results in a program file(s) that contains code from both the program and the Open Source program (including without limitation libraries) if the Open Source program is licensed under a license that requires any “modifications” be made freely available. You also may not combine the programs with programs licensed under the GNU General Public License (“GPL”) in any manner that could cause, or could be interpreted or asserted to cause, the programs or any modifications to the programs to become subject to the terms of the GPL.

H. Reporting

In connection with your distribution activities under this agreement, you shall submit monthly reports for programs distributed with the application package to Oracle Corporation or to any majority owned subsidiary of Oracle Corporation, whichever entity has executed this agreement (both of which are referred to in this agreement as an “Oracle group company”) within 20 days of the last day of the month in which the application package is distributed to the end user. You must submit a monthly report even if you do not owe any fees to Oracle for a particular month. In each monthly report you shall provide the following: (1) for those application packages that embed the programs into a physical device: the name of the programs licensed; the name, including date or version, of the applicable end user license agreement; the name, including the date or version, of your agreement with Oracle under which the programs are being distributed; the applicable license metrics, quantity, and term designation; the date of the and user’s order; and the total license and technical support fees payable to the Oracle group company for that month; (2) for those application packages that embed the programs into a software package, the name and address of the end user; the name, including date or version, of the applicable end user license agreement the name, including the date or version, of your agreement with Oracle under which the programs are being distributed; the location to which the programs will be shipped; the date of the end user’s order; the name of the programs licensed; the applicable license metrics and quantity; term designations; and the total license and technical support fees payable to the

applicable Oracle group company for that month. Your monthly report must be complete when submitted to Oracle and may not (a) require any concessions (including requiring Oracle to perform any obligations or to incur any liability not set forth in your monthly report) or (b) be changed after it is submitted to Oracle. Oracle may require that you complete standard ordering and/or reporting documentation. Notwithstanding anything to the contrary herein, with Oracle’s prior written approval, you may submit orders to the applicable Oracle group company for programs and/or services ordered and/or distributed instead of submitting monthly reports.

Upon request, you will provide Oracle with a copy of the end user license agreement, and any amendments and documents that together with the end user license agreement form the complete end user license agreement, and any ordering documents or purchase agreements between you and the end user related to the order, with any information reasonably deemed confidential or proprietary removed as the information set forth in such end user license agreement will not be considered confidential information. At a minimum you must provide information related to the programs, including but not limited to, the end user’s name, the programs distributed, the number of users, the license levels, the license grant to the end user, any definitions related to licensing metrics, the date of the order, and any other information reasonably requested by Oracle.

Where (i) the acquisition of programs and/or technical support is financed or leased, or (ii) the end user license agreement or order refers to any payments other than net 30 day payment terms, then you will comply with Oracle’s financing and leasing policies which can be accessed at http://partner.oracle.com (you must log in, select the Home tab, and select the Manage Your Membership portlet) by ensuring that the end user and any funder have received those policies, and where applicable, have acknowledged that they will comply with those policies.

If Oracle makes an online ordering and/or reporting system available to you, you may place an order or submit a monthly report electronically via email, or through a system designated by Oracle (“online system”). You shall be responsible for designating authorized individuals to submit online electronic orders and/or monthly reports on your behalf (“authorized users”) for Oracle programs through the online system. Authorized users will have the ability to access and place orders and/or submit monthly reports through a userid and assigned passwords for the online system. You warrant that the authorized users have the capacity and authority to place orders and/or submit monthly reports for Oracle programs and to enter into contracts on your behalf, and you acknowledge and agree that Oracle may treat any orders and/or monthly reports that are submitted via email or to the online system using your userid and passwords as orders on your behalf. You agree to take all reasonable steps to ensure the security of the online system userid and passwords and to ensure that unauthorized users do not access or enter the system using your userid and passwords. For any orders placed and/or monthly reports submitted by you for which you issue a purchase order in the ordinary course of your business, you must submit a physical copy of the applicable purchase order to Oracle with your order. Oracle reserves the right to accept or decline any order submitted via email or the online system. Oracle will not be bound by any terms and conditions that you attach or otherwise include in your order and/or monthly report. You agree to waive any future challenge to the validity and enforceability of any order and/or monthly report submitted via email or the online system on the grounds that it was electronically transmitted and authorized.

I. License Agreement

It is your responsibility to ensure that any distribution of the programs and/or services to an end user is subject to a legally binding end user license agreement for the programs and/or services that you distribute to the end user. The end user license agreement must, at a minimum: (1) restrict use of the programs to the scope of the application package and to the business operations of the end user; (2) prohibit (a) the transfer of the programs except for temporary transfer in the event of computer malfunction if the application package embeds the programs in a physical device; (b) the end user from assigning, giving, or transferring the programs and/or any services ordered or an interest in them to another individual or entity (and if your end user grants a security interest in the programs and/or any services, the secured party has no right to use or transfer the programs and/or any services); (c) timesharing, service bureau, subscription service, or rental use of the programs; and (d) title to the programs from passing to the end user or any other party; (3) prohibit the reverse engineering (unless required by law for interoperability), disassembly or decompilation of the programs and prohibit duplication of the programs except for a sufficient number of copies of each program for the end user’s licensed use end one copy of each program media; (4) disclaim, to the extent permitted by applicable law, Oracle’s liability for any damages, whether direct, indirect, incidental, or consequential, arising from the use of the programs; (5) require the end user, at the termination of the agreement, to discontinue use and destroy or return to you all copies of the programs and documentation; (6) prohibit publication of any results of benchmark tests run on the programs; (7) require the end user to comply fully with all relevant export laws and regulations of the United States and other applicable export and import laws to assure that neither the programs, nor any direct product thereof, are exported, directly or indirectly, in violation of applicable laws; (8) notify the end user that the programs are subject to a restricted license and can only be used in conjunction with the application package and that the end user is not permitted to modify the programs; (9) not require Oracle to perform any obligations or incur any liability not previously agreed to between you and Oracle; (10) permit you to audit your end user’s use of the programs and report such use to Oracle or to assign your right to audit the end user’s use of the programs to Oracle; (11) designate Oracle as a third party beneficiary of the end user license agreement; (12) exclude the application of the Uniform Computer Information Transactions Act; and (13) inform the end user that some programs may include source code that Oracle may provide as part of its standard shipment of such programs, which source code shall be governed by the terms of the end user license agreement. You may allow your end users to permit agents or contractors to use the programs on their behalf for the purposes set forth in the end user license agreement, subject to the terms of such agreement provided that such end users are responsible for such agents and contractors compliance with the end user license agreement in such use. You shall be financially responsible for all claims and damages to Oracle caused by your failure to include the required contractual terms set forth above in each end user license agreement between you and an end user. Oracle is a third party beneficiary of any end user license agreement between you and the end user, but does not assume any of your obligations thereunder, and you agree that you will not enter into any end user license agreement that excludes Oracle as a third party beneficiary and will inform your end users of Oracle’s rights.

You agree to inform Oracle promptly if you are aware of any breach of an end user license agreement. You agree to enforce the terms of an end user license agreement between you and an

end user if Oracle requests you to do so to protect its interest, or, at Oracle’s request, to assign to Oracle or its designee the right to enforce such agreement.

J. Warranties, Disclaimers and Exclusive Remedies

Oracle warrants that a program will operate in all material respects as described in the applicable program documentation for ***** after delivery. You must notify Oracle of any program warranty deficiency within ***** after delivery. Oracle also warrants that services ordered will be provided in a professional manner consistent with industry standards. You must notify Oracle of any services warranty within ***** from performance of the services described in the order with Oracle.

ORACLE DOES NOT GUARANTEE THAT THE PROGRAMS WILL PERFORM ERROR-FREE OR UNINTERRUPTED, OR THAT ORACLE WILL CORRECT ALL PROGRAM ERRORS. TO THE EXTENT PERMITTED BY LAW, THESE WARRANTIES ARE EXCLUSIVE AND THERE ARE NO OTHER EXPRESS OR IMPLIED WARRANTIES OR CONDITIONS, INCLUDING WARRANTIES OR CONDITIONS OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

FOR ANY BREACH OF THE ABOVE WARRANTIES, YOUR EXCLUSIVE REMEDY, AND ORACLE’S ENTIRE LIABILITY, SHALL BE: *****.

K. Trial Programs Included With Demonstration and Development License Orders

Oracle may include additional programs with an order for demonstration and development licenses which you may use for trial, non-production purposes only. You may not use the trial programs to provide or attend training provided by you or a third party on the content and/or functionality of the programs. You will have 30 days from the delivery date to evaluate these programs. If you decide to use any of these programs after the 30-day trial period, you must obtain a license for such programs. If you decide not to obtain a license for any programs after the 30-day trial period, you will cease using and will delete any such programs from your computer system. Programs licensed for trial purposes are provided “as is” and Oracle does not provide technical support or offer any warranties for these programs.


*****		The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.

L. Indemnification

If someone makes a claim against you or an end user that any program infringes their intellectual property rights, Oracle will indemnify you and the end user against the claim if you do the following:

•		notify the General Counsel, Legal Department, promptly in writing, not later than 30 days after you receive notice of the claim (or sooner if required by applicable law);

•		give Oracle sole control of the defense and any settlement negotiations; and

•		give Oracle the information, authority, and assistance Oracle needs to defend against or settle the claim.

If Oracle believes or it is determined that any of the programs may have violated someone else’s intellectual property rights, Oracle may choose to either modify the program to be non-infringing (while substantially preserving its utility or functionality) or obtain a license to allow for continued use, or if these alternatives are not commercially reasonable, Oracle may end the license for the applicable program and refund any fees you may have paid for it and any unused, prepaid technical support fees you have paid for the licenses. Oracle will not indemnify you or an end user if you or an end user alter a program or use it outside the scope of use identified in the user documentation or if you or an end user use a version of the program which has been superseded, if the infringement claim could have been avoided by using an unaltered current version of the program which was provided to you. Oracle will not indemnify you to the extent an infringement claim is based upon a program not provided by Oracle. Oracle will not indemnify you or an end user to the extent that an infringement claim is based upon the combination of any program with any products or services not provided by Oracle. This section provides your exclusive remedy for any infringement claims or damages.

If someone makes a claim against Oracle that a program, when used in combination with any product or services provided by you, infringes their intellectual property rights, and such claim would have been avoided by the exclusive use of the program, you will indemnify Oracle.

M. Technical Support

You may order annual technical support for development licenses and demonstration licenses. If ordered or renewed, annual technical support is provided under Oracle’s technical support policies in effect at the time the services are provided. The technical support policies, incorporated in this agreement, are subject to change at Oracle’s discretion; however, Oracle will not materially reduce the level of services provided for supported program licenses during the period for which fees for technical support have been paid. You should review the policies prior to entering into the order for the applicable services. You may access the current version of the technical support policies at http://oracle.com/contracts. Subject to Oracle’s technical support policies, and upon payment of the applicable annual fees for technical support as set forth in Section O (Fees and Taxes), you shall have the right to use Oracle’s technical support services acquired for your supported development licenses to provide technical support to end users, including you or your affiliated entities if you have distributed the application package to you or

such entities, provided that you continually maintain technical support for your development licenses. Upon expiration of this agreement, you may continue to use Oracle’s technical support services acquired for your supported development licenses to provide technical support to end users provided that (a) the agreement was not terminated due to your breach of a material term of the agreement; (b) you continuously maintain technical support for the development licenses; (c) you pay all applicable fees and comply with the reporting requirements set forth in this agreement, and (d) you maintain your membership in the Oracle PartnerNetwork. As set forth above, such support is provided under Oracle’s technical support policies in effect at the time the services are provided.

Technical support is effective upon shipment, or if shipment is not required, upon the effective date of the order with Oracle, unless otherwise stated in your order with Oracle. If your order was placed through the Oracle Store, the effective date is the date your order was accepted by Oracle.

You or your distributor will be responsible for any assistance needed to install the application package at end user sites. You are responsible for providing all technical support, training and consultations to distributors and end users. Questions Oracle receives from end users will be referred to you.

In conjunction with your annual payment of technical support fees, you will submit a report providing the name and address of each end user who contracted for or obtained technical support from you, and for each end user, the term of the technical support that is covered by the payment.

N. Term and End of Agreement

This agreement shall begin on the date specified in Oracle’s acceptance confirmation and continue in effect for 2 years. You must keep your membership in the Oracle PartnerNetwork current in order to distribute the programs. If your membership in the Oracle PartnerNetwork expires or is terminated, you will not be permitted to distribute programs until your membership is made current. When this agreement expires or terminates, in order to keep distributing the programs, you must execute the then current version of Oracle’s distribution agreement and the agreement will be subject to acceptance by Oracle, and Oracle may require you to complete certain training and assessment requirements at no charge to Oracle’s satisfaction. If either of us breaches a material term of this agreement and fails to correct the breach within 30 days of written specification of the breach, the other party may terminate this agreement. If Oracle ends this agreement as specified in the preceding sentence or under Section L (Indemnification), you must pay within 30 days all amounts which have accrued prior to the end of this agreement, as well as sums remaining unpaid for programs and/or services received under this agreement plus related taxes and expenses. In addition, if Oracle terminates this agreement as provided under this section, Oracle also may terminate your use of programs, access to technical support and other services ordered as well as the Oracle PartnerNetwork agreement and your membership in the Oracle PartnerNetwork. Except for nonpayment of fees, we each agree to extend the 30-day period for so long as the breaching party continues reasonable efforts to cure the breach. You

agree that if you are in default under this agreement, you may not use the programs and/or services ordered. The end users’ rights to use the programs properly distributed by you under this agreement shall survive termination of this agreement, unless such rights are otherwise terminated in accordance with the applicable license agreement. Provisions that survive termination or expiration include those relating to limitation of liability, infringement indemnity, payment, ethical business practices, and others which by their nature are intended to survive.

O. Fees and Taxes

You may place an order or submit a monthly report for programs and/or services with the Oracle group company that has executed this agreement. You agree to pay the applicable Oracle group company a fee for each order placed for programs and/or services ordered and/or distributed under this agreement, as specified in the applicable order with Oracle and/or report. You also agree to pay the applicable Oracle group company a fee for every application package with which the programs are embedded regardless of an end users prior possession or pre-existing license of these programs unless you are shipping Updates for which you are paying fees to Oracle as specified herein. Fees for programs and/or technical support will be paid directly to the entity which entered this agreement and to which you submit monthly reports. You will not be relieved of your obligation to pay any fees owed to Oracle by the nonpayment of such fees by your end user. You are free to determine the fees charged to an end user for program licenses and services. At your option, fees payable to the applicable Oracle group company for programs distributed to end users with the application package will be equal to either option (a) ***** of the applicable license fee for each individual program based on the Oracle global price list in effect at the time you issue a quote or option (b) the percentage of the applicable standard license fee as set forth on Exhibit A for the application package based on your standard commercial price list in effect at the time you issue a quote, incorporated in this agreement, and such fees owed to Oracle will not take into account any discounts you have offered to your end users.

In addition, with regard to fees for technical support provided for perpetual or term licenses when ordered from Oracle, you agree to pay the applicable Oracle group company a technical support fee as set forth on Exhibit B. Technical support may be available to the end user on the date you ship the application package, or the date you distribute the application package to the end user, if shipment is not required. If technical support is ordered and provided by you to an end user, the term for which you must pay fees to Oracle for such technical support shall begin on the last day of the month in which the application package is shipped, or distributed if shipment is not required, and if renewed, on that date in each subsequent year thereafter. If the end user does not continuously maintain technical support for the application package, you will be required to pay reinstatement fees to Oracle in accordance with Oracle’s current technical support policies if the end user wants to reinstate technical support. Fees for technical support are due and payable annually in advance.

You must select one of the above fee options for each application package by completing the Application Package Registration Form attached hereto and your selection will be in effect for the term of this agreement. If you select option (a), to access the Oracle global price list, you must log into the OPN web site at http://partner.oracle.com (you must log in, select the Home tab, and select the Manage Your Membership portlet) to view the Oracle global price list. It is


*****		The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.

your responsibility to access the Oracle global price list to obtain current information. If you select option (a), if Oracle’s global price list changes after you issue a valid written quote for program licenses to an end user, for 90 days after the date you submit the quote to the end user, the fee applicable to the programs identified in the quote shall be based on the global price list in effect on the date you submit the quote. If you select option (b), you will provide Oracle with a copy of your current standard commercial application package price list at least twice a year so that Oracle may verify the fees due and payable to Oracle.

Except as provided herein, all fees payable to the applicable Oracle group company (including fees for annual technical support which you provide to end users) are due within *****. If you submit a purchase order to Oracle, fees payable under such purchase order are due within *****. All applicable fees payable to the applicable Oracle group company for demonstration licenses and development licenses you order are due within *****. You also agree to pay any sales, value-added or other similar taxes imposed by applicable law that the applicable Oracle group company must pay based on the programs and/or services you ordered and/or reported, except for taxes based on Oracle’s income. You agree that you and your end user have not relied on the future availability of any programs or services in entering into the payment obligations in your order and/or monthly report. Oracle reserves the right to check your credit rating periodically during the term of this agreement and to modify these payment terms in the event that there is a material change in your credit rating. Fees listed in this agreement are exclusive of value added tax and/or similar sales taxes. Such taxes shall be charged at the appropriate rate by the applicable Oracle group company in addition to its stated fees and shall be shown separately on the relevant invoice. Upon your submission of an order and/or monthly report to the applicable Oracle group company, this payment obligation is non-cancelable, and the sum paid is nonrefundable, is not subject to set-off for any reason, and is not subject to the completion or occurrence or any event after the date your order and/or monthly report is submitted to Oracle.

P. Nondisclosure

By virtue of this agreement, the parties may have access to information that is confidential to one another (“confidential information”). Confidential information shall be limited to the terms and pricing under this agreement, and all information clearly identified as confidential.

A party’s confidential information shall not include information that: (a) is or becomes a part of the public domain through no act or omission of the other party; (b) was in the other party’s lawful possession prior to the disclosure and had not been obtained by the other party either directly or indirectly from the disclosing party; (c) is lawfully disclosed to the other party by a third party without restriction on the disclosure; or (d) is independently developed by the other party.

We each agree to hold each other’s confidential information in confidence for a period of three years from the date of disclosure. Also, we agree to disclose confidential information only to those employees or agents who are required to access it in furtherance of this agreement and who are required to protect it against unauthorized disclosure. Nothing shall prevent either party


*****		The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.

from disclosing the terms or pricing under this agreement or orders submitted under this agreement in any legal proceeding arising from or in connection with the terms of this agreement.

Q. Trademarks and Copyrights

You are authorized to use Oracle’s trademarks and service marks (the “Oracle trademarks”) to refer to the associated Oracle products and services. Your use of the Oracle trademarks shall comply with Oracle’s trademark usage guidelines in effect from time to time, and all goodwill based upon use of the Oracle Trademarks shall inure to Oracle’s benefit. Oracle’s trademark usage guidelines, incorporated in this agreement, are subject to change. You may access Oracle’s trademark usage guidelines at http://partner.oracle.com (you must log in, select the Home tab, and select the Manage Your Membership portlet). You agree not to use Oracle trademarks (including “ORACLE”) or potentially confusing variations (including “ORA”) as a part of your product name(s), service name(s), company name or domain name(s). In marketing, promoting, or licensing the programs, you agree to make it clear that Oracle is the source of the programs. You shall include on all copies of the programs used or distributed by you:

	A.		A reproduction of Oracle’s copyright notice; or

	B.		A copyright notice indicating that the copyright is vested in you containing the following:

	1.		A “c” in a circle and the word “copyright”;

	2.		Your name;

	3.		The date of copyright; and

	4.		The words “All rights reserved.”

Such notices shall be placed on the documentation, the sign-on screen for any software incorporating the programs, and any media containing the programs.

R. Relationships between Parties

In all matters relating to this agreement, you will act as an independent contractor. This agreement does not create a partnership, joint venture, agency, employee/employer relationship, or franchisee/franchisor relationship between the parties. Neither party will represent that it has any authority to assume or create any obligation, express or implied, on behalf of the other party, nor to represent the other party as agent, employee, franchisee, or in any other capacity. Nothing in this agreement shall be construed to limit either party’s right to independently develop or distribute software that is functionally similar to the other party’s product, so long as proprietary information of the other party is not included in such software or used to create such software.

S. Privacy

To the extent this agreement provides Oracle the right to audit or review documents that may have information concerning your end users, or to the extent that you provide Oracle with personal information relating to any employees who are identified as contact persons or otherwise identified under this agreement, where applicable, you agree to have provided all relevant notices to such persons or obtained any consents required to enable you to share this information with Oracle. Oracle will only use the information in manners consistent with those specified in this agreement, required to accomplish its purposes, or otherwise stated at the time Oracle collects such information. Any data provided may be maintained by Oracle in data centers in the United States end may be accessible by Oracle’s global personnel as required for business purposes.

T. URLs

It is your responsibility to regularly monitor all applicable URLs referenced in this agreement. You confirm that you have access to the Internet and confirm that prior to entering into this agreement you have read the policies on the websites referenced above and agree to the terms and conditions set out in those policies. You undertake that you will visit the websites referenced above on a regular basis so that you are aware of any amendments Oracle may make to those policies from time to time.

U. U.S. Government End Users

Oracle programs, including documentation, delivered to U.S. Government end users are “commercial computer software” pursuant to the applicable Federal Acquisition Regulation (“FAR”) and agency-specific supplemental regulations. As such, use, duplication, disclosure, modification, and adaptation of the programs, including documentation, shall be subject to the license and license restrictions set forth in this agreement, and, to the extent applicable, the additional rights set forth in FAR 52.227-19, Commercial Computer Software — Restricted Rights (June 1987).

V. Ethical Business Practices

You acknowledge and agree that you and your owners, directors, officers, employees or agents have not, and will not, make or promise payments of money or anything of value, directly or indirectly, to any government or public international organization officials, political parties, or candidates for political office, for the purpose of obtaining or retaining business or securing any improper advantage, or to any other person or entity if such payment would violate the laws of the country in which made or the laws of the United States. You agree that any violation of this section constitutes just cause for the immediate termination by Oracle of this agreement without any liability to you. You will also indemnify and hold Oracle and its parent company harmless from any claims, fosses and liabilities resulting from any breach of any of your obligations under this section. You agree to comply with the terms of the Oracle Partner Code of Conduct and Business Ethics, which is available at http://partner.oracle.com (you must log in, select the Home tab, and select the Manage Your Membership portlet). The obligations under this section shall survive the termination or expiration of this agreement.

W. Entire Agreement

You agree that this agreement and the information which is expressly incorporated into this agreement by written reference (including reference to information contained in a URL or referenced policy), together with the applicable order and/or monthly report, are the complete agreement for the programs and/or services ordered by you, and that this agreement supersedes all prior or contemporaneous agreements or representations, written or oral, regarding such programs and services. If any term of this agreement is found to be invalid or unenforceable, the remaining provisions will remain effective. It is expressly agreed that the terms of this agreement and any order with Oracle shall supersede the terms in any purchase order or other non-Oracle ordering document and no terms included in any such purchase order or other non-Oracle ordering document shall apply to the programs and/or services ordered. This agreement and any order with Oracle may not be modified and the rights and restrictions may not be altered or waived except in a writing signed or accepted online through an Oracle online ordering system by authorized representatives of you and of Oracle. Any notice required under this agreement shall be provided to the other party in writing.

X. Limitation of Liability

NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES, OR ANY LOSS OF PROFITS, REVENUE, DATA, OR DATA USE. ORACLE’S MAXIMUM LIABILITY FOR ANY DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT OR YOUR ORDER OR MONTHLY REPORT, WHETHER IN CONTRACT OR TORT, OR OTHERWISE, SHALL BE LIMITED TO THE *****. IN NO EVENT SHALL ORACLE’S TOTAL LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT EXCEED THE *****.

Y. Export

Export laws and regulations of the United States and other relevant local export laws and regulations apply to the programs. You agree that such export control laws govern your use and distribution of the programs (including technical data) and any services deliverables provided under this agreement, and you agree to comply with all such export laws and regulations (including “deemed export” and “deemed re-export regulations”); additional information can be found on Oracle’s Global Trade Compliance web site located at http://oracle.com/contracts. You agree that no data, information, programs, and/or materials resulting from services (or direct product thereof) will be exported, directly or indirectly, in violation of these laws, or will be used for any purpose prohibited by these laws including, without limitation, nuclear, chemical, or biological weapons proliferation, or development of missile technology.

Z. Other

This agreement is governed by the substantive and procedural laws of the State of California and you and Oracle agree to submit to the exclusive jurisdiction of, and venue in, the courts in


*****		The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.

San Francisco, San Mateo, or Santa Clara counties in California in any dispute arising out of or relating to this agreement.

If you have a dispute with Oracle or if you wish to provide a notice under Section L (Indemnification) of this agreement, or if you become subject to insolvency or other similar legal proceedings, you will promptly send written notice to: Oracle Corporation, 500 Oracle Parkway, Redwood City, California, United States, 94065, Attention: General Counsel, Legal Department.

You may not assign this agreement or give or transfer the programs and/or any services ordered or an interest in them to another individual or entity. If you grant a security interest in the programs and/or any services deliverables, the secured party has no right to use or transfer the programs and/or any services.

Except for actions for nonpayment or breach of Oracle’s proprietary rights in the programs, no action, regardless of form, arising out of or relating to this agreement may be brought by either party more than two years after the cause of action has accrued.

You agree that the sales process that you use complies with applicable procurement regulations (if the end user is a government entity) and that you will keep accurate books and records in connection with the activities under this agreement. Upon 45 days written notice, Oracle may audit your use and distribution of the programs and your activities under this agreement. You agree to cooperate with Oracle’s audit and provide reasonable assistance and access to information, including but not limited to relevant books, records, agreements, servers, technical personnel, and reporting systems. You agree to pay within 30 days of written notification any fees applicable to your use of the programs in excess of your license rights and underpaid fees. If you do not pay, Oracle can end your technical support, licenses and this agreement or may choose not to accept your application to renew this agreement at such time of renewal. Upon Oracle’s reasonable request, you agree to audit end user(s) and/or distributors and report the findings to Oracle, or assign your right to audit end user(s) and/or distributors to Oracle. You agree that Oracle shall not be responsible for any of your costs incurred in cooperating with this audit.

The Uniform Computer information Transactions Act does not apply to this agreement or any order or monthly report hereunder.

AA. Force Majeure

Neither of us shall be responsible for failure or delay of performance if caused by: an act of war, hostility, or sabotage; act of God, electrical, Internet, or telecommunication outage that is not caused by the obligated party; government restrictions (including the denial or cancellation of any export or other license); other event outside the reasonable control of the obligated party. We both will use reasonable efforts to mitigate the effect of a force majeure event. If such event continues for more than 90 days, either of us may cancel unperformed services upon written notice. This section does not excuse either party’s obligation to take reasonable steps to follow its normal disaster recovery procedures or your obligation to pay for services provided.

BB. License Definitions and Rules

Your use and distribution of the programs is subject to the license definitions and rules, which are incorporated in this agreement, and which are available at http://partner.oracle.com (you must log in, select the Home tab, and select the Manage Your Membership portlet). These license definitions and rules are subject to change, and may contain additional terms regarding the licensing metrics and other rules applicable to the programs but do not modify the terms applicable to your right to distribute the programs.

The effective date of this Agreement shall be March 31, 2006.


PARTNER:	ArcSight, Inc.	ORACLE USA, INC.

PARTNER ADDRESS:	5 Results Way,
	Cupertino, CA 95014

PARTNER FAX NO:	(408) 342-1610

Authorized Signature:	/s/ Stewart Grierson	Authorized Signature:	/s/ Abigail Allen

Name:	Stewart Grierson	Name:	Abigail Allen

Title:	CFO	Title:	Manager, License Contracts

Signature Date:	3/30/06	Signature Date:	March 31, 2006

Agreement No:	US-OPN-EMDD-404632-04-31-MAR 06

EXHIBIT A

Discount Schedule


		License Fee Rate (Based off of Oracle’s List
Oracle Program		Price)
All Individual Eligible Programs (each program must be licensed separately)		*****

Java Edition		*****


		License Fee Rate (Based off of Partner’s List
Oracle Program		Price)
Standard Edition ESL (Includes: Database Standard Edition, Database Standard Edition One, Internet Application Server Standard Edition, Internet Application Server Standard Edition One, Database Personal Edition, Database Lite, Real Application Cluster, Identity Management, and Internet Application Server Java Edition)		*****

Enterprise Edition ESL (Includes: Database Enterprise Edition, Internet Application Server Enterprise Edition, Database Personal Edition, Database Lite, Enterprise Edition Options, Enterprise Managers, Internet Application Server Managers, and Internet Application Server Java Edition)		*****


*****		The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.

EXHIBIT B

Technical Support Fees

The following fees are expressed as a percentage of cumulative net license fees for every year end users contract for or obtain support from you for the application package^*:


		Software Updates and
License Term		Product Support
Perpetual		*****
5 year term^**		*****
4 year term		*****
3 year term^**		*****
2 year term		*****
1 year term		*****


^*		The “cumulative net license fees” are the total fees paid or payable by you to Oracle for distribution of the programs pursuant to this agreement.

^**		Refer to Oracle’s global price list for the products that may be distributed under this term license.

*****		The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.

AMENDMENT ONE
to the
ORACLE PARTNERNETWORK
EMBEDDED SOFTWARE LICENSE DISTRIBUTION AGREEMENT
between
ARCSIGHT, INC.
and
ORACLE USA, INC.

This document (“Amendment One”) amends the Oracle PartnerNetwork Embedded Software License Distribution Agreement (v110405), between ArcSight, Inc. (“you” and “your”) and Oracle USA, Inc. (“Oracle”), dated March 31, 2006 and any and all amendments thereto (the “agreement”).

The parties hereby agree to amend the agreement as follows:

1.		In D. Trial Licenses, in the first sentence of the section, delete the phrase “*** trial licenses” and replace it with “*** trial licenses”.

2.		In D. Trial Licenses, delete every instance of the phrase “*** days” and replace it with “*** days”.

3.		In H. Reporting, in the first paragraph of the section, in subpart (2) of the third sentence, delete the phrase “, the name and address of the end user”.

4.		In I. License Agreement, in the first paragraph of the section, in the second sentence of the paragraph, delete subpart (2)(b) and replace It with the following:

		“(b) the end user from assigning, giving, or transferring the programs and/or any services ordered or an interest in them to another individual or entity (and if your end user grants a security interest in the programs and/or any services, the secured party has no right to use or transfer the programs and/or any services), except that upon written notice to Oracle, provided that technical support has been continuously maintained for the programs, the end user may assign its rights to use the programs under the end user license agreement to an entity that (i) is acquiring all or substantially all of the end user’s assets and assuming all liabilities related to such assets; and (ii) agrees in writing to the terms and conditions of the end user license agreement;”.

5.		In J. Warranties, Disclaimers and Exclusive Remedies, add the following paragraph after the second paragraph of the section:

		“Oracle will use reasonable efforts to test programs for viruses. Oracle will also maintain a master copy of the appropriate versions of the programs, free of viruses. If you believe a virus may be present in the delivered programs, then upon your request, Oracle will provide a master copy for comparison with and correction of your copy of the programs.”

6.		In N. Term and End of Agreement, in the first sentence of the section, delete the phrase “2 years” and replace it with “3 years”.

7.		In T. URLs, add the following new sentence after the third (last) sentence of the section:

		“In the event of a direct conflict between the terms and conditions of this agreement and the terms of any of the referenced and incorporated policies contained at the URLs specified herein, the terms and conditions of the agreement shall control the parties rights and obligations.”

8.		In X. Limitation of Liability, add the following phrase to the beginning of the second sentence of the section:

		“EXCEPT FOR ORACLE’S OBLIGATION TO INDEMNIFY YOU UNDER SECTION L.,”.

Other than the modifications above, the terms and conditions of the agreement remain unchanged and in full force and effect.

The effective date of this Amendment One is March 31, 2006.


ARCSIGHT, INC.		ORACLE USA, INC.

By:	/s/ Stewart Grierson	By:	/s/ Abigail Allen

Name :	Stewart Grierson	Name:	Abigail Allen

Title:	CFO	Title:	Manager, License Contracts

*****

The omitted portions of this exhibit have been filed with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act of 1933.

AMENDMENT TWO
to the
ORACLE PARTNERNETWORK
EMBEDDED SOFTWARE LICENSE DISTRIBUTION AGREEMENT
between
ARCSIGHT, INC.
and
ORACLE USA, INC.

This document (“Amendment Two”) amends the Oracle PartnerNetwork Embedded Software License Distribution Agreement (US-OPN-EMBD-404632-04-31-MAR-06), between ArcSight, Inc. (“you” and “your”) and Oracle USA, Inc. (“Oracle”), dated March 31, 2006 and any and all amendments thereto (the “agreement”).

The parties hereby agree to amend the agreement as follows:

	1.		Add the following as a new section of the agreement:

			“CC. Internet Hosting of ArcSight ESM application package Notwithstanding the terms of the agreement and pursuant to the terms provided in this section (the “Hosting Option”), you shall have the right to license the programs solely in conjunction with the ArcSight ESM application package, as defined in the Application Package Registration Form, to end users so that such end users may use the application package to provide Internet hosting services to their customers. You may allow your end users to provide access to the application package for their customers’ business operations using the hosted application package, provided that all such use shall be subject to (i) the terms of your license agreement with the end user which meets the requirements of the section entitled “License Agreement”; and (ii) any license quantity, metric restrictions and selection of applicable license type in the end user’s end user license agreement and/or order. You shall prohibit your end users from reselling or assigning their program licenses to their customers and from providing access to their customers to any Oracle programs. You agree to require your end users to be financially responsible to Oracle for all damages or losses resulting from the end users’ and their customers’ breach of these terms.”

			Notwithstanding the seventh sentence of the first paragraph of the O. Fees and Taxes, the fees payable to the applicable Oracle group company for programs distributed by you pursuant to the Hosting Option to end users with the ArcSight ESM application package will be equal to ***** of the applicable standard license fee for the ArcSight ESM application program based on your price list current as of the time of license to the end user. The license fee used to calculate the license fees owed to Oracle as described herein will not be less than the fees set forth in the attached ArcSight ESM application price list(s) (“Exhibit A”), which is incorporated by reference, and the fees owed to Oracle will not take into account any discounts you have offered to your end users. Upon Oracle’s request, you will provide Oracle with a copy of your current application price list so that Oracle may verify the fees due and payable to Oracle.”

Other than the modifications above, the terms and conditions of the agreement remain unchanged and in full force and effect.

The effective date of this Amendment Two is November 17, 2006.


ARCSIGHT, INC.		ORACLE USA, INC.

By:	/s/ Stewart Grierson	By:	/s/ Izzy Sanft

Name:	Stewart Grierson	Name:	Izzy Sanft

Title:	CFO	Title:	Manager, License Contracts

*****

AMENDMENT THREE
to the
ORACLE PARTNERNETWORK
EMBEDDED SOFTWARE LICENSE DISTRIBUTION AGREEMENT
between
ARCSIGHT, INC.
and
ORACLE USA, INC.

This document (“Amendment Three”) amends the Oracle PartnerNetwork Embedded Software License Agreement (US-OPN-EMBD-404632-04-31-MAR-06) between ArcSight, Inc. (“you” and “your”) and Oracle USA, Inc. (“Oracle”), dated March 31, 2006 and Amendment One and Amendment Two thereto (the “agreement”).

The parties hereby agree to amend the agreement as follows:

1.		In G. Ownership and Restrictions, delete the last paragraph and replace with the following:

		“Third party technology may be necessary for use with some Oracle programs and is specified in the program documentation; specific files (which are identified in the program documentation) of such third party technology (collectively the “Open Source Technology”) may be included on the same medium or as part of the download of Oracle programs you receive, but is included on the same medium or as part of the download of Oracle programs you receive, but is licensed under the Mozilla Public License, Common Public License, GNU Lesser General Public License, Netscape Public License or similar royalty-free/open source license (collectively, the “Open Source Licenses”).

		This agreement does not modify or abridge any rights or obligations you may have in Open Source Technology under applicable Open Source Licenses; however, to the extent that Open Source Technology is incorporated into an Oracle program, your rights and remedies under this agreement with respect to such Open Source Technology (i.e. indemnification) shall apply, but only for your use of the Oracle program that is in compliance with the terms of this agreement and with the terms of any relevant Open Source License. Any use of Open Source Technology outside of your licensed use of applicable Oracle programs is subject to the rights and obligations under such third party technology’s Open Source License. Open Source Technology programs that are separate from Oracle programs are provided as a courtesy to you and are licensed solely under the relevant Open Source License. Any distribution by you of code licensed under an Open Source License, whether alone or with the Oracle program, must be under the Open Source License.”

2.		In L. Indemnification, in the third paragraph, add the following after the fourth sentence:

		“Oracle will not indemnify you or an end user for infringement caused by you or your end users’ actions against any third party if the Oracle program(s) delivered to you and used in accordance with the terms of this agreement do not infringe any third party intellectual property rights.”

3.		In Section CC. Internet Hosting of ArcSight ESM application package (added to the agreement by Amendment Two to the agreement), add the following to the end of the first paragraph:

		“Notwithstanding anything to the contrary in this agreement, you and your affiliated entities may not be considered and users under this paragraph (i.e., you and your affiliated entities cannot use the programs to provide internet hosting services for you and your affiliated entities).”

This Amendment Three shall be effective only if the parties execute the Buyout Amendment to the Embedded Software License Distribution Agreement concurrently herewith.

Other than the modifications above, the terms and conditions of the agreement remain unchanged and in full force and effect.

The effective date of this Amendment Three is May 31, 2007.


ARCSIGHT, INC.		ORACLE USA, INC.

By:	/s/ Stewart Grierson	By:	/s/ Douglas W. Doran

Name:	Stewart Grierson	Name:	Douglas W. Doran

Title:	CFO	Title:	Director, License Contracts

BUYOUT AMENDMENT
to the
EMBEDDED SOFTWARE LICENSE DISTRIBUTION AGREEMENT
between
ARCSIGHT, INC.
and
ORACLE USA, INC.

This Buyout Amendment (the “Buyout Amendment”) is between Oracle USA, Inc. (“Oracle”) and ArcSight, Inc. (“you”) and shall be governed by and incorporated into the terms of the Oracle PartnerNetwork Embedded Software License Distribution Agreement (US-OPN-EMBD-404632-04-31-MAR-06) between Oracle and you dated March 31, 2006 and Amendment One, Amendment Two and Amendment Three (which shall be executed simultaneously with this Buyout Amendment) thereto (the “agreement”). This Buyout Amendment shall be effective only if the parties execute Amendment Three to the Embedded Software License Distribution Agreement concurrently herewith.

Any distribution rights granted will be limited to the application package(s) set forth in section 6 of this Buyout Amendment and may not be combined with any additional functionality or additional application programs. If there is a direct conflict between a term of this Buyout Amendment and a term of the agreement with respect to the subject matter of this Buyout Amendment, the term of this Buyout Amendment shall prevail.

The parties hereby agree to amend the agreement as follows:

1. Distribution Rights.

You may distribute perpetual licenses of the embedded programs defined in the application package registration form to new end users, to whom you have never previously distributed the application package in accordance with the agreement and the terms of this Buyout Amendment during the Distribution Term (defined below). You may also distribute licenses for additional incremental usage of the embedded programs to end users to whom you have previously distributed the application package under the agreement or another distribution agreement with Oracle prior to the date of this Buyout Amendment provided that (a) the end user has continuously maintained technical support for the application package previously distributed, (b) if the end user has not continuously maintained technical support for the application package previously distributed, the end user has reinstated technical support for such application package and is currently receiving technical support for the application package previously distributed at the time you distribute additional licenses for additional incremental usage of the embedded programs, or (c) the end user has never contracted for or obtained technical support for the application package previously distributed and you agree that you shall not provide technical support to the end user (i) for the application package previously distributed or (ii) for any licenses for additional incremental usage related to such application package that you distribute under this Buyout Addendum.

You may provide technical support to end users for embedded programs that you distribute only for those programs for which you have previously acquired a supported development license. Your distribution of the embedded programs is subject to the terms of the agreement and this Buyout Amendment. In the event that you do not (a) distribute the embedded programs in accordance with this Buyout Amendment and the agreement or (b) make technical support available to the end users for the application package distributed under this Buyout Amendment for the duration of the Distribution Term, then the Distribution Term and your right to distribute the embedded programs under this Buyout Amendment and to make technical support available for the embedded programs shall terminate, subject to and in accordance with Section N (Term and End of Agreement), following written notice to you by Oracle of the breach and your failure to cure such breach within thirty (30) days of such written notice.

2. License and Technical Support Fees

You agree to pay Oracle the License and Technical Support Fees for the Distribution Term specified below for the right to distribute the embedded programs as set forth in this Buyout Amendment. This fee entitles you to distribute an unlimited number of licenses of the embedded programs during the Distribution Term which is defined below and which shall commence on the effective date of this Buyout Amendment.


License and Technical Support Fees for the Distribution Term		*****

Distribution Term		2 Years

Except as provided in the agreement and this Buyout Amendment, all license and technical support fees payable to the applicable Oracle group company under this Buyout Amendment are due within ***** of the signature date below. This payment obligation is non-cancelable, and the sum paid is nonrefundable, is not subject to set-off for any reason, and is not subject to the completion or occurrence of any event after the signature date of this Buyout Amendment.

Oracle agrees that if, concurrent with the delivery of this Buyout Amendment, you deliver an Oracle Credit Corporation (“OCC”) Payment Plan Agreement and OCC ESL Payment Schedule (“PPA”) that is satisfactory to OCC, then the payment terms in the PPA shall replace the above payment terms to the extent specified in the PPA, and OCC shall pay Oracle as set forth in the PPA. The License and Technical Support Fees for the Distribution Term for the Oracle programs and services that are subject to the PPA will not be considered fully paid until all sums due under the PPA have been paid.

3. Reporting

Notwithstanding anything to the contrary in the agreement, you shall not be required to submit monthly reports to Oracle for the embedded programs distributed under the Buyout Amendment. Upon the earlier of (i) the end of the Distribution Term, or (ii) the date you first fail to meet any of the conditions specified in clauses (a) and (b) of the second paragraph of section 1 above, you

*****

shall furnish Oracle with a report verifying the total number of end user licenses of the embedded programs distributed by you pursuant to this Buyout Amendment. The quantity of licenses distributed pursuant to this Buyout Amendment will be fixed equal to the total number of end user licenses distributed. In addition, such report shall provide the following: the name of the programs licensed; the name and address of the end user; the applicable license metrics and quantity; and the date of the end user’s order.

4. Technical Support

You are responsible for providing all technical support services to distributors and end users. Questions that Oracle receives from end users will be referred to you. You shall have the right to provide technical support to end users to whom you have distributed the embedded programs provided that you continually maintain technical support for your development licenses and subject to the payment of the applicable annual fees for technical support set forth in the agreement and this Buyout Amendment. The License and Technical Support Fees for the Distribution Term set forth above do not include any fees due and payable to Oracle for technical support for any programs distributed by you prior to the effective date of this Buyout Amendment, any fees due and payable to Oracle for technical support for any programs distributed by you under a prior distribution agreement with Oracle, or any fees due and payable to Oracle for technical support for any programs distributed by you under the agreement which are not included in this Buyout Amendment. If Customer delivers a PPA in accordance with section 2 above, technical support fees for the Distribution Term shall be invoiced by Oracle annually in advance in the amount of ***** each year. Annual technical support is provided under Oracle’s technical support policies in effect at the time the services are provided. The technical support policies, incorporated in this agreement, are subject to change at Oracle’s discretion.

As set forth above, in the event that you do not make annual technical support available to end users for the duration of the Distribution Term, then your rights to distribute the programs shall immediately terminate as provided above and your right to provide technical support services to end users shall also immediately terminate.

Following the end of the Distribution Term, you may continue to renew technical support for the embedded programs and provide technical support to your end users of such programs provided that you continuously maintain technical support for the development licenses, you pay all applicable fees set forth in this agreement, and you maintain your membership in the Oracle PartnerNetwork. Following the end of the Distribution Term, renewal of annual technical support services shall be provided in accordance with Oracle’s then-current technical support policies and the terms of the agreement and this Buyout Amendment. If one hundred percent (100%) of your install base (defined below) is receiving technical support from you, the renewal fee for the first year for technical support for the embedded programs shall be equal to the total technical support fees amount for the last year of the Distribution Term plus the percentage of such amount that is equal to Oracle’s then current technical support annual percentage increase, which shall not exceed *****, of such amount (“100% renewal fee”). Sixty (60) days prior to the end of the Distribution Term, you shall submit a written certification to Oracle verifying the

*****

percentage of your install base that you are providing technical support to (“Supported Install Base”). Notwithstanding anything to the contrary in the agreement, upon receipt of your certification, Oracle will calculate your annual technical support fee for the embedded programs for the first year following the end of the Distribution Term as follows: the Supported Install Base multiplied by the 100% renewal fee (as defined above). After the first year following the end of the Distribution Term, renewal of annual technical support services for embedded programs shall be provided in accordance with Oracle’s then current technical support services for the embedded programs shall be provided in accordance with Oracle’s then current technical support policies and the terms of the agreement. As used herein, the term “install base” shall mean the total number of end users to whom you have distributed the embedded programs during the Distribution Term.

Renewal fees for technical support shall be invoiced by Oracle annually in advance. Fees for technical support shall be due and payable in advance thirty (30) days from date of invoice. Your payment obligations for technical support fees is non-cancelable, and the sum paid is nonrefundable, is not subject to set-off for any reason, and is not subject to the completion of occurrence of ay event after the signature date of this Buyout Amendment.

5. Term

The term of this Buyout Amendment shall commence on its signature date below and shall be valid for the Distribution Term unless terminated earlier as provided herein or in the agreement. Notwithstanding anything to the contrary in the agreement, this Buyout Amendment may not be extended or renewed, unless the parties agree in writing. You understand and agree that you may not continue to distribute the programs with this application program defined herein after the expiration or termination of the Distribution Term unless and until new terms and pricing have been agreed in writing by both parties. In the event that the term of the agreement expires before the term of this Buyout amendment then the term of the agreement shall be extended for the remainder of the term of the Buyout Amendment.

6. Application Packages

Your distribution of the embedded programs under this Buyout Amendment applies only to the application packages identified below and described in the relevant APRF:

List of Application Packages
ArcSight ESM
ArcSight Logger

7. Agreement Definitions.

Amend section A of the agreement, Agreement Definitions, as follows:

a. Delete the definition of the term “embedded” and replace with the following:

The term “embedded refers to the following requirements, with which the application package must comply:

(i) *****;

(ii) *****;

(iii) *****;

(iv) *****;

(v) *****;

(vi) *****;

(vii) Program upgrades must be certified and distributed as a component of the application package and the end user shall be unable to upgrade the database or other Oracle program technology versions as a separate component;

(viii) As you deem necessary, you will provide customer service, support, and education for all program operations to the end user. If you discontinue providing customer service, support, or education for your application package to the end user, Oracle will not be obligated to provide ongoing service, support or education to the end user. You will notify Oracle of your intention to discontinue any support services provided by you to the end user;

(ix) Only you can access the programs directly for purposes of technical assistance to your end user and such access is limited to providing technical assistance, including troubleshooting, problem resolution, and support assistance. You shall not provide remote or onsite program administration tasks on behalf of the end user that are otherwise prohibited under the terms of this agreement;

(x) The embedded programs and the application program must be priced together on your standard price list and on the end user’s invoice as the price of the application package, and must not be distributed separately; and

(xi) The application program(s) described on the applicable application package registration form and with which the programs are embedded must not be distributed under any other Oracle distribution agreement.

Other than the modifications above, the terms and conditions of the agreement remain unchanged and in full force and effect. The effective date of this Buyout Amendment is May 31, 2007.

This Buyout Amendment shall be valid only if executed by both parties on or before May 31, 2007.


PARTNER: ARCSIGHT, INC.		ORACLE USA, INC.

Authorized Signature:	/s/ Stewart Grierson	Authorized Signature:	/s/ Douglas W. Doran

Name:	Stewart Grierson	Name:	Douglas W. Doran

Title:	CFO	Title:	Director, License Contracts

Signature Date:	5/31/2007	Signature Date:	6/1/2007

*****

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