10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2007

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from          to

Commission file number 001-33508

LIMELIGHT NETWORKS, INC.

(Exact name of registrant as specified in its charter)

Delaware	20-1677033
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

2220 W. 14^th Street
Tempe, AZ 85281
(Address of principal executive offices, including Zip Code)
(602) 850-5000
(Registrant’s telephone number, including area code)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No þ

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o      Accelerated filer o      Non-accelerated filer þ

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

The number of shares outstanding of the registrant’s common stock as of November 09, 2007: 82,058,952 shares.

LIMELIGHT NETWORKS, INC.
FORM 10-Q
Quarterly Period Ended September 30, 2007
TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS
	Condensed Consolidated Balance Sheets as of September 30, 2007 and December 31, 2006		3
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2007 and 2006		4
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2007 and 2006		5
	Notes to Unaudited Condensed Consolidated Financial Statements for the Three and Nine Months Ended September 30, 2007 and 2006		6
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		13
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		27
ITEM 4.	CONTROLS AND PROCEDURES		27
PART II. OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS		28
ITEM 1A.	RISK FACTORS		29
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		40
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES		40
ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS		40
ITEM 5.	OTHER INFORMATION		40
ITEM 6.	EXHIBITS
			40
SIGNATURES			42
Exhibit 10.15
Exhibit 31.01
Exhibit 31.02
Exhibit 32.01
Exhibit 32.02

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

LIMELIGHT NETWORKS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

	September 30,			December 31,
	2007			2006
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	128,750		$	7,611
Marketable securities		65,370			—
Accounts receivable, net of reserves of $2,354 at September 30, 2007 and $1,204 at December 31, 2006, respectively		18,431			17,526
Income taxes receivable		4,136			2,980
Deferred income taxes		—			362
Prepaid expenses and other current assets		5,506			3,011
Total current assets		222,193			31,490
Property and equipment, net		47,544			41,784
Marketable securities, less current portion		32			285
Deferred income taxes		259			106
Other assets		1,495			759
Total assets	$	271,523		$	74,424
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,805		$	6,419
Accounts payable, related parties		17			781
Deferred revenue, current portion		431			197
Credit facilities, current portion		—			2,938
Capital lease obligations, current portion		—			245
Deferred income taxes, current portion		33			—
Other current liabilities		13,748			6,314
Total current liabilities		16,034			16,894
Deferred revenue, less current portion		11,860			—
Credit facilities, less current portion (net of discount of $-0- and $424 at September 30, 2007 and December 31, 2006, respectively)		—			20,456
Capital lease obligations, less current portion		—			5
Deferred income taxes, less current portion		30			—
Other long-term liabilities		30			30
Total liabilities		27,954			37,385
Commitments and contingencies		—			—
Stockholders’ equity:
Series A convertible preferred stock, $0.001 par value; 6,921 shares authorized; 0 and 5,070 shares issued and outstanding at September 30, 2007 and December 31, 2006, respectively, (liquidation preference: $733 at December 31, 2006)		—			5
Series B convertible preferred stock, $0.001 par value; 43,050 shares authorized; 0 and 39,870 shares issued and outstanding at September 30, 2007 and December 31, 2006, respectively, (liquidation preference: $260,000 at December 31, 2006)		—			40
Convertible preferred stock, $0.001 par value; 7,500 shares authorized; 0 shares issued and outstanding		—			—
Common stock, $0.001 par value; 150,000 and 120,150 shares authorized at September 30, 2007 and December 31, 2006, respectively; 82,056 and 21,832 shares issued and outstanding at September 30, 2007 and December 31, 2006, respectively		82			22
Additional paid-in capital		266,102			41,803
Accumulated other comprehensive loss		(222	)		(113	)
Accumulated deficit		(22,393	)		(4,718	)
Total stockholders’ equity		243,569			37,039
Total liabilities and stockholders’ equity	$	271,523		$	74,424

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

LIMELIGHT NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

	For the						For the
	Three Months Ended						Nine months Ended
	September 30,						September 30,
	2007			2006			2007			2006
Revenues	$	29,190		$	17,454		$	73,979		$	43,133
Cost of revenue:
Cost of services		12,171			7,300			31,796			16,338
Depreciation — network		5,602			2,900			15,310			6,408
Total cost of revenue		17,773			10,200			47,106			22,746
Gross Margin		11,417			7,254			26,873			20,387
Operating expenses:
General and administrative		7,849			4,616			24,144			8,418
Sales and marketing		7,421			1,860			16,843			4,391
Research and development		1,294			1,193			4,119			1,951
Depreciation and amortization		268			63			579			135
Total operating expenses		16,832			7,732			45,685			14,895
Operating (loss) income		(5,415	)		(478	)		(18,812	)		5,492
Other income (expense):
Interest expense		(18	)		(373	)		(1,412	)		(1,397	)
Interest income		2,456			79			3,118			79
Other income		33			70			33			70
Total other income (expense)		2,471			(224	)		1,739			(1,248	)
(Loss) income before income taxes		(2,944	)		(702	)		(17,073	)		4,244
Income tax expense		181			688			602			2,642
Net (loss) income	$	(3,125	)	$	(1,390	)	$	(17,675	)	$	1,602
Net (loss) income allocable to common stockholders	$	(3,125	)	$	(1,390	)	$	(17,675	)	$	1,065
Net (loss) income per weighted average share:
Basic	$	(0.04	)	$	(0.09	)	$	(0.35	)	$	0.04
Diluted	$	(0.04	)	$	(0.09	)	$	(0.35	)	$	0.03
Shares used in per weighted average share calculations:
Basic		82,045			15,670			49,929			27,502
Diluted		82,045			15,670			49,929			34,136

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

LIMELIGHT NETWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	For the
	Nine months Ended
	September 30,
	2007			2006
	(Unaudited)
Cash flows from operating activities:
Net (loss) income	$	(17,675	)	$	1,602
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		15,889			6,543
Share-based compensation		15,285			3,393
Deferred income tax expense		286			(1	)
Accounts receivable charges		3,536			419
Accretion of debt discount		424			69
Accretion of marketable securities		(277	)		—
Changes in operating assets and liabilities:
Accounts receivable		(4,441	)		(8,102	)
Prepaid expenses and other current assets		(2,495	)		(1,572	)
Income taxes receivable		(126	)		144
Other assets		(698	)		(261	)
Accounts payable		(5,595	)		9,799
Accounts payable, related parties		(781	)		(362	)
Deferred revenue and other current liabilities		20,138			2,805
Net cash provided by operating activities		23,470			14,476
Cash flows from investing activities:
Purchase of marketable securities		(72,001	)		—
Sale of marketable securities		7,000			—
Purchases of property and equipment		(20,650	)		(27,327	)
Net cash used in investing activities		(85,651	)		(27,327	)
Cash flows from financing activities:
Borrowings on credit facilities		—			9,055
Payments on credit facilities		(23,818	)		(11,933	)
Borrowings on line of credit		1,500			—
Payments on line of credit		(1,500	)		(1,000	)
Payments on capital lease obligations		(250	)		(171	)
Payments on notes payable — related parties		—			(195	)
Escrow funds returned from share repurchase		3,418			412
Tax benefit from share-based compensation		23			—
Proceeds from exercise of stock options		35			1,886
Net proceeds from preferred stock issuance		—			126,423
Repurchase of common stock		—			(102,121	)
Proceeds from initial public offering, net of issuance costs		203,912			—
Net cash provided by financing activities		183,320			22,356
Net increase in cash and cash equivalents		121,139			9,505
Cash and cash equivalents at beginning of period		7,611			1,536
Cash and cash equivalents at end of period	$	128,750		$	11,041
Supplemental disclosure of cash flow information:
Cash paid for interest	$	1,020		$	1,023
Cash paid for income taxes	$	360		$	3,720
Property and equipment purchases remaining in accounts payable	$	998		$	4,057

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

LIMELIGHT NETWORKS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Nature of Business

     Limelight Networks, Inc. (the Company) is a provider of high-performance content delivery network (CDN) services. The Company delivers content for traditional and emerging media companies, or content providers, including businesses operating in the television, music, radio, newspaper, magazine, movie, videogame, software and social media industries. The Company was formed in June 2001 as an Arizona limited liability company, Limelight Networks, LLC, and converted into a Delaware corporation, Limelight Networks, Inc., in August 2003. The Company has operated in the Phoenix metropolitan area since 2001 and elsewhere throughout the United States since 2003. The Company began international operations in 2004.

2. Summary of Significant Accounting Policies and Use of Estimates

Basis of Presentation

     The condensed consolidated financial statements include accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The accompanying interim condensed consolidated balance sheet as of September 30, 2007, the condensed consolidated statements of operations for the three months and nine months ended September 30, 2007 and 2006, and the condensed consolidated statements of cash flows for the nine months ended September 30, 2007 and 2006, are unaudited. The condensed consolidated balance sheet information as of December 31, 2006 is derived from the audited consolidated financial statements which were restated in a Current Report on Form 8-K filed with the SEC on October 29, 2007. The consolidated financial information contained in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and related notes contained in the Current Report on From 8-K filed on October 29, 2007.

     The results of operations presented in this Quarterly Report on Form 10-Q are not necessarily indicative of the results that may be expected for the year ending December 31, 2007 or for any future periods. In the opinion of management, these unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature that are necessary, in the opinion of management, to present fairly the results of all interim periods reported herein.

Revenue Recognition

     The Company recognizes service revenues in accordance with the SEC’s Staff Accounting Bulletin No. 104, Revenue Recognition, and the Financial Accounting Standards Board’s (FASB) Emerging Issues Task Force Issue No. 00-21, Revenue Arrangements with Multiple Deliverables. Revenue is recognized when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectibility of the resulting receivable is reasonably assured.

     At the inception of a customer contract for service, the Company makes an assessment as to that customer’s ability to pay for the services provided. If the Company subsequently determines that collection from the customer is not reasonably assured, the Company records an allowance for doubtful accounts and bad debt expense for all of that customer’s unpaid invoices and ceases recognizing revenue for continued services provided until cash is received.

     The Company primarily derives revenue from the sale of content delivery network services to customers executing contracts having terms of one year or longer. These contracts generally commit the customer to a minimum monthly level of usage on a calendar month basis and provide the rate at which the customer must pay for actual usage above the monthly minimum. For these services, the Company recognizes the monthly minimum as revenue each month provided that an enforceable contract has been signed by both parties, the service has been delivered to the customer, the fee for the service is fixed or determinable and collection is reasonably assured. Should a customer’s usage of the Company’s services exceed the monthly minimum, the Company recognizes revenue for such excess in the period of the usage. The Company typically charges the customer an installation fee when the services are first activated. The installation fees are recorded as deferred revenue and recognized as revenue ratably over the estimated life of the customer arrangement. The Company also derives revenue from services sold as discrete, non-recurring events or based solely on usage. For these services, the Company recognizes revenue after an enforceable contract has been signed by both parties, the fee is fixed or determinable, the event or usage has occurred and collection is reasonably assured.

     The Company periodically enters into multi-element arrangements. When the Company enters into such arrangements, each element is accounted for separately over its respective service period or at the time of delivery, provided that there is objective evidence of fair value for the separate elements. Objective evidence of fair value includes the price charged for the element when sold separately. If the fair value of each element cannot be objectively determined, the total value of the arrangement is recognized ratably over the entire service period to the extent that all services have begun to be provided, and other revenue recognition criteria has been satisfied.

     The Company has entered a multi-element arrangement which includes a significant software component. In accounting for such an arrangement the Company applies the provisions of Statement of Position, 97-2, (SOP 97-2) Software Revenue Recognition, as amended by SOP 98-9, Modifications of SOP 97-2, Software Revenue Recognition, With Respect to Certain Transactions. The Company recognizes software license revenue when persuasive evidence of an arrangement exists, delivery has occurred, the fee is

6

fixed or determinable and collection of the receivable is probable. If a software license contains an undelivered element, the vendor-specific objective evidence (VSOE) of fair value of the undelivered element is deferred and the revenue recognized once the element is delivered. The undelivered elements are primarily software support and professional services. VSOE of fair value of software support and professional services is based upon hourly rates or fixed fees charged when those services are sold separately. If VSOE cannot be established for all elements to be delivered, the Company defers all amounts received under the arrangement and does not begin to recognize revenue until the delivery of the last element of the contract has started. Subsequent to commencement of delivery of the last element, the Company commences revenue recognition. Amounts to be received under the contract are then included in the amortizable base and then recognized as revenue ratably over the remaining term of the arrangement until the Company has delivered all elements and has no additional performance obligations.

     The Company recently entered into a multi-element arrangement to provide consulting services related to the development of a custom CDN solution, the cross-license of certain technologies, including certain components of the Company’s CDN software and technology, and post-contract customer support (PCS) for both the custom CDN solution and the software component (the Multi-Element Arrangement). The agreement also contains a commitment by the customer to transmit a certain amount of traffic over the Company’s network during a five-year period from commencement of the agreement or be subject to penalty payments.

     The Company does not have VSOE of fair value to allocate the fee to the separate elements of the Multi-Element Arrangement as it has not licensed the intellectual property and software components, nor PCS separately. Accordingly the Company will recognize the revenues related to the professional services, license and PCS ratably over the four-year period over which the PCS has been contracted as allowed for by paragraph 12 of SOP 97-2. Because delivery of the license and PCS elements of this arrangement had not occurred at June 30, 2007, revenue on all services provided to this customer during the three months ended June 30, 2007, including the ongoing content delivery services, and the direct incremental costs incurred associated with these revenues, were deferred until such time as delivery occurs and PCS has commenced. Concurrently with the signing of the Multi-Element Arrangement, the Company also extended and amended a content delivery contract entered into originally in 2005. The arrangement for transmitting content is not a required element of the new software and node development project commencing under the Multi-Element Arrangement. The Company will continue to receive payments on a usage basis under the content delivery contract. Given that the services are priced at market rates and subject to regular adjustments and are cancelable with thirty days’ notice, the amount of revenue and pricing is considered variable and contingent until services are delivered. As such, the Company has attributed revenue for the service as one that is contingent and becomes measurable as the services are delivered under the terms of the content delivery contract. Accordingly, the Company will record revenue on a monthly basis in an amount based upon usage. Because the content delivery agreement was amended concurrently with the Multi-Element Arrangement, the Company deferred revenue recognition until commencement of delivery of the last element of the Multi-Element Arrangement, which was determined to be July 27, 2007. For the three-month period ended June 30, 2007, the Company had a deferred revenue balance of $3.4 million related to the Multi-Element Arrangement and related deferred direct costs of $0.9 million. During the three months ended September 30, 2007, the Company recognized approximately $2.7 million in revenue and approximately $0.7 million in costs of revenue. As of September 30, 2007, the Company had deferred revenue related to the Multi-Element Arrangement of $2.3 million, which is expected to be recognized ratably over the remaining original 44-month period commencing in July 2007 and had related deferred costs of $0.2 million.

     The Company also sells services through a reseller channel. Assuming all other revenue recognition criteria are met, revenue from reseller arrangements is recognized over the term of the contract, based on the reseller’s contracted non-refundable minimum purchase commitments plus amounts sold by the reseller to its customers in excess of the minimum commitments. These excess commitments are recognized as revenue in the period in which the service is provided. The Company records revenue under these agreements on a net or gross basis depending upon the terms of the arrangement in accordance with EITF 99-19 Recording Revenue Gross as a Principal Versus Net as an Agent. The Company typically records revenue gross when it has risk of loss, latitude in establishing price, credit risk and is the primary obligor in the arrangement.

     From time to time, the Company enters into contracts to sell services to unrelated companies at or about the same time the Company enters into contracts to purchase products or services from the same companies. If the Company concludes that these contracts were negotiated concurrently, the Company records as revenue only the net cash received from the vendor. For certain non-cash arrangements whereby the Company provides rack space and bandwidth services to several companies in exchange for advertising the Company records barter revenue and expense if the services are objectively measurable. The various types of advertising include radio, website, print and signage. The Company recorded barter revenue and expense of approximately $196,000 and $164,000, for the three-month periods ended September 30, 2007 and 2006, and approximately $648,000 and $456,000 for the nine-month periods ended September 30, 2007, and 2006, respectively.

     The Company may from time to time resell licenses or services of third parties. Revenue for these transactions is recorded when the Company has risk of loss related to the amounts purchased from the third party and the Company adds value to the license or service, such as by providing maintenance or support for such license or service. If these conditions are present, the Company recognizes revenue when all other revenue recognition criteria are satisfied.

Cash and Cash Equivalents

     The Company holds its cash and cash equivalents in checking, money market, and investment accounts with high credit quality financial instruments. The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents.

7

Investments in Marketable Securities

     The Company accounts for its investments in equity securities under FASB’s Statement of Financial Accounting Standards (SFAS) No. 115, Accounting for Certain Investments in Debt and Equity Securities. Management determines the appropriate classification of such securities at the time of purchase and reevaluates such classification as of each balance sheet date. Realized gains and losses and declines in value judged to be other than temporary are determined based on the specific identification method and would be reported in the statements of operations. To date, there have been no such realized losses.

     The Company has classified its investments in equity and debt securities as available-for-sale. Available-for-sale investments are initially recorded at cost and periodically adjusted to fair value through comprehensive income. The Company periodically reviews its investments for other-than-temporary declines in fair value based on the specific identification method and writes down investments to their fair value when an other-than-temporary decline has occurred.

     The following is a summary of available-for-sale securities at September 30, 2007 (in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized			Estimated
	Cost		Gains		Losses			Fair Value
Government agency bonds	$	16,945	$	43	$	—		$	16,988
Commercial paper		28,967		2		(10	)		28,959
Corporate notes and bonds		19,366		64		(7	)		19,423
Total available-for-sale debt securities		65,278		109		(17	)		65,370
Publicly traded common stock		472		—		(440	)		32
Total available-for-sale securities	$	65,750	$	109	$	(457	)	$	65,402

     Expected maturities can differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties, and the Company views its available-for-sale securities as available for current operations.

     The amortized cost and estimated fair value of the available-for-sale debt securities at September 30, 2007, by maturity, are shown below (in thousands).

			Gross		Gross
	Amortized		Unrealized		Unrealized			Estimated
	Cost		Gains		Losses			Fair Value
Available-for-sale debt securities
Due in one year or less	$	46,300	$	22	$	(17	)	$	46,305
Due after one year and through five years		18,978		87		—			19,065
Due after five years and through ten years		—		—		—			—
Due after ten years		—		—		—			—
	$	65,278	$	109	$	(17	)	$	65,370

     During the three and six month periods ended September 30, 2007, the Company did not have any gross realized gains or losses on sales of available-for-sale securities.

3. Other Current Liabilities

     Other current liabilities consist of the following (in thousands)

	As of		As of
	September 30,		December 31,
	2007		2006
Accrued cost of revenue	$	3,076	$	845
Accrued compensation and benefits		1,767		675
Non-income taxes payable		4,101		3,549
Proceeds from early exercise of stock options		—		610
Accrued purchases of property and equipment		1,071		—
Other accrued expenses		3,733		635
Total other current liabilities	$	13,748	$	6,314

4. Initial Public Offering (IPO)

     On June 8, 2007, the Company completed an initial public offering of its common stock in which the Company sold and issued

8

14,900,000 shares of its common stock and selling stockholders sold 3,500,000 shares of the Company’s common stock, in each case at a price to the public of $15.00 per share. The common shares began trading on the NASDAQ Global Market on June 8, 2007. The Company raised a total of $223.5 million in gross proceeds from the IPO, or approximately $203.9 million in net proceeds after deducting underwriting discounts and commissions of approximately $15.6 million and other offering costs of approximately $4.0 million. On June 14, 2007, approximately $23.8 million of the net proceeds were used to repay in full the outstanding balance of the Company’s equipment financing facility.

5. Net Income (Loss) Per Share

     The Company follows EITF Issue No. 03-6, Participating Securities and the Two-Class Method under FASB Statement 128, which established standards regarding the computation of earnings per share (EPS) by companies that have issued securities other than common stock that contractually entitle the holder to participate in dividends and earnings of the company. EITF Issue No. 03-6 requires earnings available to common stockholders for the period, after deduction of preferred stock dividends, to be allocated between the common and preferred shareholders based on their respective rights to receive dividends. Loss years are not impacted by this accounting requirement. Basic net income per share is then calculated by dividing income allocable to common stockholders (including the reduction for any undeclared, preferred stock dividends assuming current income for the period had been distributed) by the weighted-average number of common shares outstanding, net of shares subject to repurchase by the Company, during the period. EITF Issue No. 03-6 does not require the presentation of basic and diluted net income per share for securities other than common stock; therefore, the following net income (loss) per share amounts only pertain to the Company’s common stock. The Company calculates diluted net income per share under the if-converted method unless the conversion of the preferred stock is anti-dilutive to basic net income per share. To the extent preferred stock is antidilutive, the Company calculates diluted net income per share under the two-class method. Potential common shares include restricted common stock and incremental shares of common stock issuable upon the exercise of stock options and warrants using the treasury stock method.

     The following table sets forth the components used in the computation of basic and diluted net income (loss) per share for the periods indicated (in thousands, except per share data):

	For the						For the
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2007			2006			2007			2006
Numerator:
Net (loss) income	$	(3,125	)	$	(1,390	)	$	(17,675	)	$	1,602
Less: Income allocable to preferred stockholders		—			—			—			(537	)
Net income (loss) allocable to common stockholders	$	(3,125	)	$	(1,390	)	$	(17,675	)	$	1,065
Denominator:
Weighted average common shares		82,045			15,670			49,929			27,502
Less: Weighted-average unvested common shares subject to repurchase		—			—			—			—
Denominator for basic net (loss) income per share		82,045			15,670			49,929			27,502
Dilutive effect of stock options and shares subject to repurchase		—			—			—			3,261
Dilutive effect of outstanding stock warrants		—			—			—			3,373
Denominator for diluted net (loss) income per share		82,045			15,670			49,929			34,136
Basic net (loss) income per share	$	(0.04	)	$	(0.09	)	$	(0.35	)	$	0.04
Diluted net (loss) income per share	$	(0.04	)	$	(0.09	)	$	(0.35	)	$	0.03

For the three-month periods ended September 30, 2007 and 2006, options to purchase approximately 8.7 million and 4.1 million, respectively, shares of common stock were excluded from the computation of diluted net income (loss) per common share for the periods presented because including them would have had an antidilutive effect. For the nine-month periods ended September 30, 2007 and 2006, options to purchase approximately 8.7 million and 68,000, respectively, shares of common stock were excluded from the computation of diluted net income (loss) per common share for the periods presented because including them would have had an antidilutive effect.

6. Comprehensive Income (Loss)

The following table presents the calculation of comprehensive income and its components (in thousands):

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	For the						For the
	Three Months Ended						Nine months Ended
	September 30,						September 30,
	2007			2006			2007			2006
Net (loss) income	$	(3,125	)	$	(1,390	)	$	(17,675	)	$	1,602
Other comprehensive (loss) income, net of tax:
Unrealized (loss) gain on investments		8			47			(109	)		118
Other comprehensive (loss) income		8			47			(109	)		118
Comprehensive (loss) income	$	(3,117	)	$	1,343		$	(17,784	)	$	1,720

For the periods presented, accumulated other comprehensive loss consisted of (in thousands):

	As of			As of
	September 30,			December 31,
	2007			2006
Net unrealized loss on investments, net of tax	$	(222	)	$	(113	)
Total accumulated other comprehensive loss	$	(222	)	$	(113	)

7. Stockholders’ Equity

Stock Split

     On May 14, 2007, the Company effected a 3-for-2 forward stock split of its outstanding capital stock. All share and per-share data have been restated to reflect this stock split.

Conversion of Preferred Stock

     On June 14, 2007, upon the closing of the Company’s IPO, all outstanding shares of the Company’s Series A and Series B Convertible Preferred Stock automatically converted into 44,940,261 shares of common stock on a 1-for-1 share basis.

Common Stock

     The Board of Directors has authorized 150,000,000 and 120,150,000 shares of $0.001 par value Common Stock at September 30, 2007 and December 31, 2006, respectively.

Preferred Stock

     On June 13, 2007, the Company amended its certificate of incorporation to authorize the issuance of up to 7,500,000 shares of preferred stock. The preferred stock may be issued in one or more series pursuant to a resolution or resolutions providing for such issuance duly adopted by the Board of Directors. As of September 30, 2007, the Board of Directors had not adopted any resolutions for the issuance of preferred stock.

8. Share-Based Compensation

     The following table summarizes the components of share-based compensation expense included in the Company’s condensed consolidated statement of operations for the three-and six-month periods ended September 30, 2007 and 2006 in accordance with SFAS No. 123R (in thousands):

	For the				For the
	Three Months Ended				Nine months Ended
	September 30,				September 30,
	2007		2006		2007		2006
Share-based compensation expense by type of award:
Stock options	$	3,181	$	3,052	$	12,844	$	3,393
Restricted stock		774		—		2,441		—
Total share-based compensation expense	$	3,955	$	3,052	$	15,285	$	3,393
Effect of share-based compensation expense on income by line:
Cost of services	$	422	$	136	$	1,010	$	258
General and administrative expense		1,702		2,097		9,199		2,139
Sales and marketing expense		1,289		84		2,676		191
Research and development expense		542		735		2,400		805
Total cost related to share-based compensation expense	$	3,955	$	3,052	$	15,285	$	3,393

9. Related Party Transactions

     During the nine months ended September 30, 2006 the company purchased $14.8 million of equipment from a supplier owned by one of our founders. As of December 31, 2006, the Company was informed by this founder that there was no longer an ownership interest in this entity. Revenue derived from related parties was less than 1% for the three-and nine-month periods ended September 30,

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2006 and September 30, 2007. Management believes that all of the Company’s related party transactions reflected arm’s length terms.

10. Concentrations

     For the three-month period ended September 30, 2006, the Company had two major customers for which the revenue derived therefrom exceeded 10% of total revenue. For the nine-month period ended September 30, 2006, the Company had one major customer for which the revenue derived therefrom exceeded 10% of total revenue. For the three-and nine-month periods ended September 30, 2007, the Company had one major customer for which the revenue derived therefrom exceeded 10% of total revenue.

     Revenue from non-U.S. sources totaled approximately $3.4 million and $1.3 million for the three-month periods ended September 30, 2007 and 2006, respectively. Revenue from non-U.S. sources totaled approximately $9.6 million and $3.1 million for the nine-month periods ended September 30, 2007 and 2006, respectively.

11. Income taxes

     In July 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation o f FASB Statement No. 109 (FIN 48). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. FIN 48 prescribes a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than fifty percent likelihood of being realized upon ultimate settlement.

     The Company adopted the provisions of FIN 48 on January 1, 2007. The adoption of FIN 48 did not result in the recognition of an adjustment for the cumulative effect of adoption of a new accounting principle. As of January 1, 2007, the Company had approximately $428,000 of total unrecognized tax benefits. Of this total, approximately $131,000 represented the amount of unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate. The unrecognized tax benefit increased by $284,000 from January 1, 2007 to $712,000 as of September 30, 2007. The Company anticipates its unrecognized tax benefits will decrease within twelve months of the reporting date as a result of settling potential tax liabilities in certain foreign jurisdictions.

     The Company recognizes interest and penalties related to unrecognized tax benefits in its tax provision. As of January 1, 2007, the Company had recorded a liability of $131,000 for the payment of interest and penalties. The liability for the payment of interest and penalties did not materially change as of September 30, 2007.

     During the nine months ended September 30, 2007, the Company performed its assessment of the recoverability of deferred tax assets and determined that, in light of increased operating loss levels, its deferred tax assets relating to stock compensation no longer meet the “more likely than not” criteria. In accordance with SFAS No. 109, a charge to expense of approximately $0.5 million was recorded during the quarter ended June 30, 2007 to fully reserve those deferred tax assets existing at December 31, 2006. In preparing its effective income tax rate for 2007, no benefit is being provided for temporary differences that increase deferred tax assets relating to stock-based compensation. Other deferred tax assets remain unreserved, as management believes they are likely to be recovered, given the existence of loss carryback refund availability and the effect of existing deferred tax liabilities.

     The Company conducts business in various jurisdictions in the United States and in foreign countries and is subject to examination by tax authorities. As of September 30, 2007 and December 31, 2006, the Company is not under examination. The tax years 2002 through 2006 remain open to examination by U.S. and certain state and foreign taxing jurisdictions.

12. Segment Reporting

     The Company operates in one industry segment—content delivery network services. The Company operates primarily in three geographic areas— the U.S., Europe and Asia.

     SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is its Chief Executive Officer. The Company’s Chief Executive Officer reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. The Company has one business activity and there are no segment managers who are held accountable for operations, operating results and plans for products or components below the consolidated unit level. Accordingly, the Company reports as a single operating segment.

     Revenue by geography is based on the location of the server which delivered the service. The following table sets forth revenue by geographic area (in thousands).

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	For the				For the
	Three Months Ended				Nine months Ended
	September 30,				September 30,
	2007		2006		2007		2006
Domestic Revenue	$	25,813	$	16,161	$	64,391	$	40,070
International Revenue		3,377		1,293		9,588		3,063
Total Revenue	$	29,190	$	17,454	$	73,979	$	43,133

     The following table sets forth long-lived assets by geographic area (in thousands).

	As of		As of
	September 30,		December 31,
	2007		2006
Domestic long-lived assets	$	45,612	$	39,198
International long-lived assets		1,932		2,586
Total long-lived assets	$	47,544	$	41,784

13. Commitments and Contingencies

     The Company is involved in litigation with Akamai Technologies, Inc. and the Massachusetts Institute of Technology relating to a claim of patent infringement. The action was filed in June 2006. The trial date for the case has recently been set for February 11, 2008. While the outcome of this claim cannot be predicted with certainty, management does not believe the outcome of this matter will have a material adverse effect on the Company’s business. However, an unfavorable outcome could seriously impact the Company’s ability to conduct business which, in turn, would have a material adverse impact on the Company’s results of operations and financial position.

     Beginning in August 2007, the Company, certain of its officers and directors, and the firms that served as the lead underwriters in its initial public offering have been named as defendants in several purported class action lawsuits filed in the U. S. District Courts for the District of Arizona and the Southern District of New York. The complaints assert causes of action under Sections 11, 12 and 15 of the Securities Act of 1933, as amended, and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder, on behalf of a professed class consisting of all those who were allegedly damaged as a result of acquiring the Company’s common stock between June 8, 2007 and August 8, 2007. The complaints allege, among other things, that the Company omitted and/or misstated certain facts concerning the seasonality of its business and the degree to which the Company offers discounted services to its customers. Although the Company believes the individual defendants have meritorious defenses to the claims made in these complaints and intends to contest the lawsuits vigorously, an adverse resolution of the lawsuits may have a material adverse effect on the Company’s financial position and results of operations in the period in which the lawsuits are resolved. The Company is not able at this time to estimate the range of potential loss nor does it believe that a loss is probable. Therefore, there is no provision for these lawsuits in the Company’s financial statements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2006 which were restated in a Current Report on Form 8-K filed with the Securities and Exchange Commission, or SEC, on October 29, 2007. This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements as to industry trends and future expectations of ours and other matters that do not relate strictly to historical facts. These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions or variations. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q and in our other SEC filings. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Overview

     We were founded in 2001 as a provider of content delivery network, or CDN, services to deliver digital content over the Internet. We began development of our infrastructure in 2001 and began generating meaningful revenue in 2002. As of September 30, 2007, we had 988 active customers worldwide. We primarily derive revenue from the sale of services to customers executing contracts with terms of one year or longer, which we refer to as recurring revenue contracts or long-term contracts. These contracts generally commit the customer to a minimum monthly or minimum annual level of usage with additional charges applicable for actual usage above the monthly minimum. We believe that having a consistent and predictable base level of revenue is important to our financial success. Accordingly, to be successful, we must maintain our base of recurring revenue contracts by eliminating or reducing any customer cancellations or terminations and build on that base by adding new customers and increasing the number of services, features and functionalities our existing customers purchase. At the same time, we must ensure that our expenses do not increase faster than, or at the same rate as, our revenues. Accomplishing these goals requires that we compete effectively in the marketplace on the basis of price, quality and the attractiveness of our services and technology.

     We primarily derive revenue from the sale of CDN services to our customers. These services include delivery of digital media, including video, music, games, software and social media. We generate revenue by charging customers on a per-gigabyte basis or on a variable basis based on peak delivery rate for a fixed period of time, as our services are used. We recently entered into a multi-element arrangement which generates revenue by providing consulting services related to the development of a custom CDN solution, through the cross-license of certain technologies, including certain components of the Company’s CDN software and technology, and post-contract customer support, or PCS, for both the custom CDN solution and the software component. We also derive some business from the sale of custom CDN services. These are generally limited to modifying our network to accommodate non-standard content player software or to establish dedicated customer network components that reside within our network or that operate within our customers’ network.

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Overview of Operations

     The following table sets forth our historical operating results, as a percentage of revenue for the periods indicated:

	For the						For the
	Three Months Ended						Nine months Ended
	September 30,						September 30,
	2007			2006			2007			2006
	(Unaudited)						(Unaudited)
Revenues		100	%		100	%		100	%		100	%
Cost of revenue:
Cost of services		42			42			43			38
Depreciation — network		19			17			21			15
Total cost of revenue		61			58			64			53
Gross Margin		39			42			36			47
Operating expenses:
General and administrative		27			26			33			20
Sales and marketing		25			11			23			10
Research and development		4			7			6			5
Depreciation and amortization		1			—			1			—
Total operating expenses		58			44			62			35
Operating (loss) income		(19	)		(3	)		(25	)		13
Other income (expense):
Interest expense		—			(2	)		(2	)		(3	)
Interest income		8			—			4			—
Other income (expense), net		—			—			—			—
Total other income (expense)		8			(1	)		2			(3	)
Income (loss) before income taxes		(10	)		(4	)		(23	)		10
Income tax expense		1			4			1			6
Net (loss) income		(11	)%		(8	)%		(24	)%		4	%

     We have observed a number of trends in our business that are likely to have an impact on our financial condition and results of operations in the foreseeable future. Traffic on our network has grown in the last three years. This traffic growth is the result of growth in the number of new contracts, as well as growth in the traffic delivered to existing customers. Our near-exclusive focus is on providing CDN services, which we consider to be our sole industry segment. We recently entered into a multi-element arrangement which generates revenue by providing consulting services related to the development of a custom CDN solution, through the cross-license of certain technologies, including certain components of the Company’s CDN software and technology, and PCS for both the custom CDN solution and the software component. Revenue from this multi-element arrangement will be recognized ratably over 44 months commencing in July 2007.

     Historically, we have derived a small portion of our revenue from outside of the United States. Our international revenue has grown recently, and we expect this trend to continue as we focus on our strategy of expanding our network and customer base internationally. For the three- and nine-month periods ended September 30, 2007, revenue derived from customers outside the United States accounted for 11.6% and 13.0% of our total revenue, respectively, of which nearly all was derived from operations in Europe. We expect foreign revenue as a percentage of our total revenues to increase over the long run as we increase our marketing efforts and expand our international network footprint. Our international business is managed as a single geographic segment, and we report our financial results on this basis.

     During any given fiscal period, a relatively small number of customers typically account for a significant percentage of our revenue. For the three- and nine-month periods ended September 30, 2007, one major customer accounted for approximately 23% and 12% of total revenue, respectively. In addition to selling to our direct customers, we maintain relationships with a number of resellers that purchase our services and charge a mark-up to their end customers. Revenue generated from sales to direct and reseller customers accounted for approximately 79% and 21% of our revenue in 2006, respectively, and approximately 99% and 1% during the nine-month period ended September 30, 2007, respectively. This significant reduction in the percentage of reseller revenue to total revenue is primarily the result of MySpace moving from being an indirect to a direct customer at the end of 2006.

     In addition to these revenue-related business trends, our cost of revenue as a percentage of revenue has risen in 2007 as compared to 2006. This increase is primarily the result of increased cost of depreciation and co-location costs related to the increased investments to build out the capacity of our network and increased bandwidth costs to support increased current and future traffic associate with our revenue growth. Operating expense has increased in absolute dollars each period as revenue has increased. Beginning in the second half of 2006 and in 2007, these increases accelerated due primarily to increased stock-based compensation, cost of litigation and payroll and

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payroll-related costs associated with additional general administrative and sales and marketing resources to support our current and future growth.

     We make our capital investment decisions based upon careful evaluation of a number of variables, such as the amount of traffic we anticipate on our network, the cost of the physical infrastructure required to deliver that traffic, and the forecasted capacity utilization of our network. Our capital expenditures have increased substantially over time, in particular as we purchased servers and other computer equipment associated with our network build-out. For example, in 2004, 2005 and 2006, we made capital expenditures of $2.6 million, $10.9 million and $40.6 million, respectively. The substantial increase in capital expenditures in 2006, in particular, was related to a significant increase in our network capacity, needed to support current growth and to support our expectation for additional demand for our services in future periods. For the nine-month period ended September 30, 2007, we made capital expenditures of $20.7 million and expect total expenditures for the full year 2007 to be between $30 million and $31 million.

     Capital expenditures prior to January 2007 involved related party transactions, in which we expended an aggregate of $2.1 million, $7.4 million and $29.9 million on server hardware in 2004, 2005 and 2006, respectively, from a supplier owned by one of our founders. As of December 31, 2006, we were informed by this founder that he no longer has an ownership interest in this entity. In other transactions unrelated to this supplier relationship, we have also generated revenue from certain customers that are entities related to certain of our founders. Revenue derived from related parties was less than 1% for the nine months periods ended September 30, 2006 and September 30, 2007. We believe that all of our related party transactions reflected arm’s length terms.

     We are currently engaged in litigation with one of our principal competitors, Akamai Technologies, Inc., or Akamai, and its licensor, the Massachusetts Institute of Technology, or MIT, in which these parties have alleged that we are infringing three of their patents. The trial for the case has recently been set to begin on February 11, 2008. Our legal and other expenses associated with this case have been significant to date, including aggregate expenditures of $3.1 million in 2006. For the nine-month period ended September 30, 2007, our legal and other expenses associated with this case were $4.5 million. We have reflected the full amount of these litigation expenses in 2006 and 2007 in general and administrative expenses, as reported in our consolidated statement of operations. We expect that these expenses will continue to remain significant and may increase as a trial date approaches. We expect to offset one half of the cash impact of these litigation expenses through the availability of an escrow fund established in connection with our Series B preferred stock financing. This escrow account was established with an initial balance of approximately $10.1 million to serve as security for the indemnification obligations of our stockholders tendering shares in that financing. In May 2007, we, the tendering stockholders and the Series B preferred stock investors agreed to distribute $3.7 million of the escrow account to the tendering stockholders upon the closing of our initial public offering. As of the closing of our initial public offering, approximately $3.7 million of the escrow was paid to the tendering stockholders and we have received $0.7 million in 2006 and $3.4 million in 2007. As of September 30, 2007, approximately $2.3 million remained in the escrow account. The escrow account will be drawn down as we incur Akamai-related litigation expenses. We expect to draw down an additional $1.0 million to $1.5 million from this escrow during the remainder of 2007. Any cash reimbursed from this escrow account will be recorded as additional paid-in capital. The cash offset from the litigation expense funded through the escrow account is recorded on our balance sheet as additional paid-in capital.

     We were profitable during the nine-month period ended September 30, 2006 and unprofitable for the nine-month period ended September 30, 2007; primarily due to an increase in our share-based compensation expense, which increased from $3.4 million for the nine-month period ended September 30, 2006, to $15.3 million for the nine-month period ended September 30, 2007. Also, litigation expenses increased to $4.7 million for the nine-month period ended September 30, 2007 compared to expenses of $0.8 million for the nine-months ended September 30, 2006. The significant increase in share-based compensation expense reflects an increase in the level of option and restricted stock grants coupled with a significant increase in the fair market value per share at the date of grant while the increase in litigation expenses relates to the cost of litigation which commenced in July 2006.

Our future results will be affected by many factors identified in the section captioned “Risk Factors” in this Quarterly Report on Form 10-Q, including our ability to:

• rely on a few large customers for the majority of our revenue, as the impact of quarter-to-quarter declines in revenue from any of these customers could be material;

• increase our revenue by adding customers and limiting customer cancellations and terminations, as well as increasing the amount of monthly recurring revenue that we derive from our existing customers;

• manage the prices we charge for our services, as well as the costs associated with operating our network in light of increased competition;

• successfully manage our litigation with Akamai and MIT to conclusion; and

• prevent disruptions to our services and network due to accidents or intentional attacks.

As a result, we cannot assure you that we will achieve our expected financial objectives, including positive net income.

Critical Accounting Policies and Estimates

     Our management’s discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, which have been prepared by us

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in accordance with accounting principles generally accepted in the United States for interim periods. These principles require us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, cash flow and related disclosure of contingent assets and liabilities. Our estimates include those related to revenue recognition, accounts receivable reserves, income and other taxes, stock-based compensation and equipment and contingent obligations. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates. To the extent that there are material differences between these estimates and our actual results, our future financial statements will be affected.

     As of September 30, 2007, there have been no material changes to any of the critical accounting policies as described in our Current Report on Form 8-K dated October 29, 2007, with the exception of the discussion of revenue recognition discussed below.

Revenue Recognition

     We recognize service revenues in accordance with the SEC’s Staff Accounting Bulletin No. 104, Revenue Recognition, and the Financial Accounting Standards Board’s (FASB) Emerging Issues Task Force Issue No. 00-21, Revenue Arrangements with Multiple Deliverables. Revenue is recognized when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectibility of the resulting receivable is reasonably assured.

     At the inception of a customer contract for service, we make an assessment as to that customer’s ability to pay for the services provided. If we subsequently determine that collection from the customer is not reasonably assured, we record an allowance for doubtful accounts and bad debt expense for all of that customer’s unpaid invoices and ceases recognizing revenue for continued services provided until cash is received.

     We primarily derive revenue from the sale of content delivery network services to customers executing contracts having terms of one year or longer. These contracts generally commit the customer to a minimum monthly level of usage on a calendar month basis and provide the rate at which the customer must pay for actual usage above the monthly minimum. For these services, we recognize the monthly minimum as revenue each month provided that an enforceable contract has been signed by both parties, the service has been delivered to the customer, the fee for the service is fixed or determinable and collection is reasonably assured. Should a customer’s usage of our services exceed the monthly minimum, we recognize revenue for such excess in the period of the usage. We typically charge the customer an installation fee when the services are first activated. The installation fees are recorded as deferred revenue and recognized as revenue ratably over the estimated life of the customer arrangement. We also derive revenue from services sold as discrete, non-recurring events or based solely on usage. For these services, we recognize revenue after an enforceable contract has been signed by both parties, the fee is fixed or determinable, the event or usage has occurred and collection is reasonably assured.

     We periodically enter into multi-element arrangements. When we enter into such arrangements, each element is accounted for separately over its respective service period or at the time of delivery, provided that there is objective evidence of fair value for the separate elements. Objective evidence of fair value includes the price charged for the element when sold separately. If the fair value of each element cannot be objectively determined, the total value of the arrangement is recognized ratably over the entire service period to the extent that all services have begun to be provided, and other revenue recognition criteria has been satisfied.

     We have entered a multi-element arrangement which includes a significant software component. In accounting for such an arrangement we apply the provisions of Statement of Position, 97-2, (SOP 97-2) Software Revenue Recognition, as amended by SOP 98-9, Modifications of SOP 97-2, Software Revenue Recognition, With Respect to Certain Transactions. We recognize software license revenue when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collection of the receivable is probable. If a software license contains an undelivered element, the vendor-specific objective evidence (VSOE) of fair value of the undelivered element is deferred and the revenue recognized once the element is delivered. The undelivered elements are primarily software support and professional services. VSOE of fair value of software support and professional services is based upon hourly rates or fixed fees charged when those services are sold separately. If VSOE cannot be established for all elements to be delivered, we defer all amounts received under the arrangement and do not begin to recognize revenue until the delivery of the last element of the contract has started. Subsequent to commencement of delivery of the last element, we commence revenue recognition. Amounts to be received under the contract are then included in the amortizable base and then recognized as revenue ratably over the remaining term of the arrangement until we have delivered all elements and have no additional performance obligations.

     We recently entered into a multi-element arrangement to provide consulting services related to the development of a custom CDN solution, the cross-license of certain technologies, including certain components of our CDN software and technology, and post-contract customer support (PCS) for both the custom CDN solution and the software component (the Multi-Element Arrangement). The agreement also contains a commitment by the customer to transmit a certain amount of traffic over our network during a five-year period from commencement of the agreement or be subject to penalty payments.

     We do not have VSOE of fair value to allocate the fee to the separate elements of the Multi-Element Arrangement as it has not licensed the intellectual property and software components, nor PCS separately. Accordingly we will recognize the revenues related to the professional services, license and PCS ratably over the four-year period over which the PCS has been contracted as allowed for by paragraph 12 of SOP 97-2. Because delivery of the license and PCS elements of this arrangement had not occurred at June 30, 2007, revenue on all services provided to this customer during the three months ended June 30, 2007, including the ongoing content delivery services, and the direct incremental costs incurred associated with these revenues, were deferred until such time as delivery occurs and PCS has commenced. Concurrently with the signing of the Multi-Element Arrangement, we also extended and amended a content delivery contract entered into originally in 2005. The arrangement for transmitting content is not a required element of the new software and node development project commencing under the Multi-Element Arrangement. We will continue to receive payments on a

 16

usage basis under the content delivery contract. Given that the services are priced at market rates and subject to regular adjustments and are cancelable with thirty days’ notice, the amount of revenue and pricing is considered variable and contingent until services are delivered. As such, we have attributed revenue for the services as one that is contingent and becomes measurable as the services are delivered under the terms of the content delivery contract. Accordingly, we will record revenue on a monthly basis in an amount based upon usage. Because the content delivery agreement was amended concurrently with the Multi-Element Arrangement, we deferred revenue recognition until commencement of delivery of the last element of the Multi-Element Arrangement, which was determined to be July 27, 2007. For the three-month period ended June 30, 2007, we had a deferred revenue balance of $3.4 million related to the Multi-Element Arrangement and related deferred direct costs of $0.9 million. During the three months ended September 30, 2007, we recognized approximately $2.7 million in revenue and approximately $0.7 million in costs of revenue. As of September 30, 2007, we had deferred revenue related to the Multi-Element Arrangement of $2.3 million, which is expected to be recognized ratably over the remaining original 44-month period commencing in July 2007 and had related deferred costs of $0.2 million

     We also sell services through a reseller channel. Assuming all other revenue recognition criteria are met, revenue from reseller arrangements is recognized over the term of the contract, based on the reseller’s contracted non-refundable minimum purchase commitments plus amounts sold by the reseller to its customers in excess of the minimum commitments. These excess commitments are recognized as revenue in the period in which the service is provided. We record revenue under these agreements on a net or gross basis depending upon the terms of the arrangement in accordance with EITF 99-19 Recording Revenue Gross as a Principal Versus Net as an Agent. We typically record revenue gross when it has risk of loss, latitude in establishing price, credit risk and is the primary obligor in the arrangement.

     From time to time, we enter into contracts to sell services to unrelated companies at or about the same time we enter into contracts to purchase products or services from the same companies. If we conclude that these contracts were negotiated concurrently, we record as revenue only the net cash received from the vendor. For certain non-cash arrangements whereby we provide rack space and bandwidth services to several companies in exchange for advertising we record barter revenue and expense if the services are objectively measurable. The various types of advertising include radio, website, print and signage. We recorded barter revenue and expense of approximately $196,000 and $164,000, for the three-month periods ended September 30, 2007 and 2006, and approximately $648,000, and $456,000 for the nine-month periods ended September 30, 2007, and 2006, respectively.

     We may from time to time resell licenses or services of third parties. Revenue for these transactions is recorded when we have risk of loss related to the amounts purchased from the third party and we add value to the license or service, such as by providing maintenance or support for such license or service. If these conditions are present, we recognize revenue when all other revenue recognition criteria are satisfied.

Share-Based Compensation

     We account for our share-based compensation pursuant to SFAS No. 123 (revised 2004) Share-Based Payment, or SFAS No. 123R. SFAS No. 123R requires measurement of all employee share-based payments awards using a fair-value method. The grant date fair value is determined using the Black-Scholes-Merton pricing model. The Black-Scholes-Merton valuation calculation requires us to make key assumptions such as future stock price volatility, expected terms, risk-free rates and dividend yield. The weighted-average expected term for stock options granted was calculated using the simplified method in accordance with the provisions of Staff Accounting Bulletin No. 107, Share-Based Payment. The simplified method defines the expected term as the average of the contractual term and the vesting period of the stock option. We have estimated the volatility rates used as inputs to the model based on an analysis of the most similar public companies for which we have data. We have used judgment in selecting these companies, as well as in evaluating the available historical volatility data for these companies.

     SFAS No. 123R requires us to develop an estimate of the number of share-based awards which will be forfeited due to employee turnover. Quarterly changes in the estimated forfeiture rate may have a significant effect on share-based payments expense, as the effect of adjusting the rate for all expense amortization after January 1, 2006 is recognized in the period the forfeiture estimate is changed. If the actual forfeiture rate is higher than the estimated forfeiture rate, then an adjustment is made to increase the estimated forfeiture rate, which will result in a decrease to the expense recognized in the financial statements. If the actual forfeiture rate is lower than the estimated forfeiture rate, then an adjustment is made to decrease the estimated forfeiture rate, which will result in an increase to the expense recognized in the financial statements. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. We have never paid cash dividends, and do not currently intend to pay cash dividends, and thus have assumed a 0% dividend yield.

     We will continue to use judgment in evaluating the expected term, volatility and forfeiture rate related to our own stock-based awards on a prospective basis, and in incorporating these factors into the model. If our actual experience differs significantly from the assumptions used to compute our stock-based compensation cost, or if different assumptions had been used, we may have recorded too much or too little share-based compensation cost.

     We recognize expense using the straight-line attribution method. We recorded share-based compensation expense related to stock options and restricted stock under the fair value requirements of SFAS No. 123R during the three month period ended September 30, 2007 and 2006 of approximately $4.0 million and $3.1 million, respectively. For the nine-month periods ended September 30, 2007 and 2006 we recorded share-based compensation expense related to stock options and restricted stock under the fair value requirements of SFAS No. 123R of approximately $15.3 million and $3.4 million, respectively. Unrecognized share-based compensation expense totaled $48.6 million at September 30, 2007, of which we expect to recognize over a weighted average period of 3.16 years. We expect to amortize $3.6 million during the final quarter of 2007, $14.4 million in 2008 and the remainder thereafter based upon the scheduled vesting of the options outstanding at that time. Of these charges, approximately $5.8 million in 2006 and $6.7 million in 2007 relate to

17

options granted to our four founders in connection with our Series B preferred stock financing in July 2006. We expect our share-based payments expense to decrease in the remainder of 2007 and potentially to increase thereafter as we grant additional stock options and restricted stock awards.

Results of Operations

Revenue

	Three months ended September 30,									Nine months ended September 30,
					Increase		Percent							Increase		Percent
	2007		2006		(Decrease)		Change			2007		2006		(Decrease)		Change
			(in thousands)									(in thousands)
Revenue	$	29,190	$	17,454	$	11,736		67	%	$	73,979	$	43,133	$	30,846		71	%

     Revenue increased 67%, or $11.7 million, to $29.2 million for the three months ended September 30, 2007 as compared to $17.5 million for the three months ended September 30, 2006. For the nine months ended September 30, 2007, total revenues increased 71%, or $30.8 million, to $74.0 million as compared to $43.1 million for the nine months ended September 30, 2006. The increase in revenue for the three months ended September 30, 2007 as compared to the same period in the prior year was primarily attributable to an increase in our recurring CDN service revenue of $11.5 million. The increase in CDN service revenue was primarily attributable to an increase in the number of customers under recurring revenue contracts, as well as an increase in traffic and additional services sold to new and existing customers. The increase in revenue for the nine months ended September 30, 2007 as compared to the same period in the prior year was primarily attributable to an increase in our recurring CDN service revenue of $30.6 million. As of September 30, 2007, we had 988 active customers under recurring CDN service revenue contracts as compared to 625 as of September 30, 2006. During the quarter ended September 30, 2007, we recognized ongoing CDN services from one customer totaling $2.6 million which was deferred from our second quarter ending June 30, 2007. The $2.6 million was part of a multi-element arrangement for which customer acceptance of a software element of the arrangement did not occur until July 27, 2007. In addition we deferred $1.6 million in custom CDN services revenue during the quarter ended September 30, 2007. As of September 30, 2007, we had deferred revenue related to the Multi-Element Arrangement of $2.3 million which is expected to be recognized ratably over the remaining original 44 month period commencing in July 2007

     For the three months ended September 30, 2007 and 2006, 11.6% and 7.4%, respectively, of our total revenues were derived from our operations located outside of the United States, primarily from Europe. For the nine months ended September 30, 2007 and 2006, 13.0% and 7.1%, respectively, of our total revenues were derived from our operations located outside of the United States, primarily from Europe. No single country outside of the United States accounted for 10% or more of revenues during these periods.

Cost of Revenue

	Three months ended September 30,									Nine months ended September 30,
					Increase		Percent							Increase		Percent
	2007		2006		(Decrease)		Change			2007		2006		(Decrease)		Change
			(in thousands)									(in thousands)
Cost of revenue	$	17,773	$	10,200	$	7,573		74	%	$	47,106	$	22,746	$	24,360		107	%

     Cost of revenue includes fees paid to network providers for bandwidth and co-location of our network equipment. Cost of revenue also includes payroll and related costs, depreciation of network equipment used to deliver our CDN services and equity-related compensation for network operations personnel.

     Cost of revenue increased 74%, or $7.6 million, to $17.8 million for the three months ended September 30, 2007 as compared to $10.2 million for the three months ended September 30, 2006. For the nine months ended September 30, 2007, cost of revenues increased 107%, or $24.4 million, to $47.1 million as compared to $22.7 million for the nine months ended September 30, 2006. These increases were primarily due to an increase in aggregate bandwidth and co-location fees of $3.8 million and $12.7 million, respectively, due to higher traffic levels, an increase in depreciation expense of network equipment of $2.7 million and $8.9 million, respectively, due to increased investment in our network, and an increase in payroll and related employee costs of $0.7 million and $1.6 million, respectively, associated with increased staff. During the quarter ended September 30, 2007, we recognized $0.6 million of costs associated with revenue previously deferred during our quarter ended June 30, 2007 and recognized during the quarter ended September 30, 2007.

     Additionally, during the three and nine months ended September 30, 2007, cost of revenue includes share-based compensation expense of approximately $0.4 million and $1.0 million, respectively, resulting from our application of SFAS No. 123R.

     Cost of revenue was composed of the following (in millions):

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	For the				For the
	Three Months Ended				Nine months Ended
	September 30,				September 30,
	2007		2006		2007		2006
Bandwidth and co-location fees	$	10.0	$	6.2	$	26.7	$	14.0
Depreciation — network		5.6		2.9		15.3		6.4
Royalty expenses		0.2		0.5		0.8		1.0
Payroll and related employee costs		1.2		0.5		2.7		1.1
Share-based compensation		0.4		0.1		1.0		0.2
Other costs		0.4		—		0.6		—
Total cost of revenues	$	17.8	$	10.2	$	47.1	$	22.7

     We have long-term purchase commitments for bandwidth usage and co-location with various network and Internet service providers. The minimum commitments related to bandwidth usage and co-location services under agreements currently in effect are approximately: $6.2 million for the remainder of 2007, $11.5 million for 2008, $7.4 million for 2009, $2.8 million for 2010 and $0.6 million for 2011.

     We expect that cost of revenues will increase during the remainder of 2007. We expect to deliver more traffic on our network, which would result in higher expenses associated with the increased traffic; additionally, we anticipate increases in depreciation expense related to our network equipment, along with payroll and related costs, as we expect to continue to make investments in our network to service our expanding customer base. The increase in network personnel and the granting of stock options to those new employees will result in additional expense associated with the amortization of share-based compensation.

General and Administrative

	Three months ended September 30,									Nine months ended September 30,
					Increase		Percent							Increase		Percent
	2007		2006		(Decrease)		Change			2007		2006		(Decrease)		Change
			(in thousands)									(in thousands)
General and administrative	$	7,849	$	4,616	$	3,233		70	%	$	24,144	$	8,418	$	15,726		187	%

     General and administrative expenses consist primarily of the following components:

• payroll, share-based compensation and other related costs, including related expenses for executive, finance, business applications, internal network management, human resources and other administrative personnel;

• fees for professional services, including litigation expenses;

• rent and other facility-related expenditures for leased properties.

• depreciation of property and equipment we use internally;

• the provision for doubtful accounts; and

• non-income related taxes;

     General and administrative expenses increased 70%, or $3.2 million, to $7.8 million for the three months ended September 30, 2007 as compared to $4.6 million for the three months ended September 30, 2006. For the nine months ended September 30, 2007, general and administrative expenses increased 187%, or $15.7 million, to $24.1 million as compared to $8.4 million for the nine months ended September 30, 2006. The increase in general and administrative expenses for the three and nine months ended September 30, 2007 as compared to the three and nine months ended September 30, 2006 was primarily due to an increase of $2.3 million and $5.1 million, respectively, in professional fees. Our increase in professional fees is attributable to $0.7 million and $0.8 million, respectively, in increased accounting fees and costs associated with being a publicly traded company and an increase of $1.5 million and $4.2 million, respectively, in legal expenses related to our litigation with Akamai and MIT and the class action lawsuits filed against us beginning in August 2007. Our legal fees include $2.0 million and $3.4 million, respectively, which is reimbursable to us from an escrow fund established in connection with our 2006 stock repurchase. In addition, we had an increase of $0.2 million and $0.5 million, respectively, in payroll and related employee costs as a result of increased staffing, an increase of $0.4 million and $0.9 million, respectively, in bad debt expense and an increase in other expenses of $0.7 million and $2.1 million, respectively. Other expenses include such items as rent, utilities, telephone, insurance, travel and travel-related expenses, fees and licenses and property taxes. For the three months ended September 30, 2007, our share-based compensation decreased $0.4 million compared to the same period last year. The decrease is the result of having fully expensed equity grants made to our founders in connection with our Series B preferred stock financing in July 2006. For the nine-month period ended September 30, 2007 our share based compensation increased $7.1 million.

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     General and administrative expense was composed of the following (in millions):

	For the				For the
	Three Months Ended				Nine months Ended
	September 30,				September 30,
	2007		2006		2007		2006
Share-based compensation	$	1.7	$	2.1	$	9.2	$	2.1
Professional fees and legal expenses		3.1		0.8		6.0		0.9
Payroll and related employee costs		0.8		0.6		3.0		2.5
Bad debt expense		0.6		0.2		1.4		0.5
Other expenses		1.6		0.9		4.5		2.4
Total general and administrative	$	7.8	$	4.6	$	24.1	$	8.4

     We expect general and administrative expenses to decrease in the fourth quarter of 2007 as compared to the third quarter of 2007, due to lower stock-based compensation expense on equity grants made in the latter part of 2006, which will be partially offset by increases in payroll and related costs attributable to increased hiring, increased legal costs associated with ongoing litigation, as well as increased accounting and legal and other costs associated with public reporting requirements and compliance with the requirements of the Sarbanes-Oxley Act of 2002.

Sales and Marketing

	Three months ended September 30,									Nine months ended September 30,
					Increase		Percent							Increase		Percent
	2007		2006		(Decrease)		Change			2007		2006		(Decrease)		Change
			(in thousands)									(in thousands)
Sales and marketing	$	7,421	$	1,860	$	5,561		299	%	$	16,843	$	4,391	$	12,452		284	%

     Sales and marketing expenses consist primarily of payroll and related costs, equity-related compensation and commissions for personnel engaged in marketing, sales and service support functions, professional fees (consultants and recruiting fees), travel and travel-related expenses as well as advertising and promotional expenses.

     Sales and marketing expenses increased 299%, or $5.6 million, to $7.4 million for the three months ended September 30, 2007, as compared to $1.9 million for the three months ended September 30, 2006. For the nine months ended September 30, 2007, sales and marketing expenses increased 284%, or $12.5 million, to $16.8 million, as compared to $4.4 million for the nine months ended September 30, 2006. The increase in sales and marketing expenses in the three- and nine-month periods ended September 30, 2007 as compared to the three- and nine-month periods ended September 30, 2006 was primarily due to an increase of $2.9 million and $6.6 million, respectively, in payroll and related employee costs, including $1.7 million and $3.9 million, respectively, in additional salaries and $1.1 million and $2.7 million, respectively, in additional commissions on increased revenue. Additional increases were due to an increase of $1.2 million and $2.5 million, respectively, in share-based compensation expense, an increase of $0.4 million and $1.2 million, respectively, in marketing programs, an increase of $0.6 million and $1.2 million, respectively, in travel and travel-related expenses, an increase of $0.1 million and $0.3 million, respectively, in professional fees, an increase of $0.1 million and $0.2 million, respectively, in reseller commissions and an increase of $0.2 million and $0.3 million, respectively, in other expenses. Other expense included such items as rent and property taxes for our Europe and Asia Pacific sales offices, telephone and office supplies. These increases are consistent with the 67% and 71% increase in revenue for the three- and nine-month periods ended September 30, 2007 as compared to the same periods in the prior year.

     Sales and marketing expense was composed of the following (in millions):

	For the				For the
	Three Months Ended				Nine months Ended
	September 30,				September 30,
	2007		2006		2007		2006
Payroll and related employee costs	$	4.1	$	1.2	$	9.5	$	2.9
Share-based compensation		1.3		0.1		2.7		0.2
Marketing programs		0.8		0.4		2.1		0.9
Travel and travel-related expenses		0.6		—		1.2		—
Professional fees		0.3		0.2		0.6		0.3
Reseller commissions		0.1		—		0.4		0.1
Other expenses		0.2		—		0.3		—
Total sales and marketing	$	7.4	$	1.9	$	16.8	$	4.4

     We anticipate our sales and marketing expense will continue to increase in future periods in absolute dollars and as a percentage of

20

revenue due to an expected increase in commissions on higher forecasted sales, the expected increase in hiring of sales and marketing personnel, increases in rents as we expand our facilities for our sales and marketing personnel, increases in share-based compensation expense under SFAS No. 123R due to additional equity awards we expect to grant, and additional expected increases in marketing programs.

Research and Development

	Three months ended September 30,									Nine months ended September 30,
					Increase		Percent							Increase		Percent
	2007		2006		(Decrease)		Change			2007		2006		(Decrease)		Change
			(in thousands)									(in thousands)
Research and development	$	1,294	$	1,193	$	101		8	%	$	4,119	$	1,951	$	2,168		111	%

     Research and development expenses consist primarily of payroll and related costs and share-based compensation expense for research and development personnel who design, develop, test and enhance our services, network and software.

     Research and development expenses increased 8%, or $0.1 million, to $1.3 million for the three months ended September 30, 2007, as compared to $1.2 million for the three months ended September 30, 2006. For the nine months ended September 30, 2007, research and development expenses increased 111%, or $2.2 million, to $4.1 million, as compared to $2.0 million for the nine months ended September 30, 2006. The increase in research and development expenses in the three month period ended September 30, 2007 as compared to the three month period ended September 30, 2006 was primarily due to an increase of $0.2 million in payroll and related employee costs associated with our hiring of additional network and software engineering personnel, an increase of $0.1 million in travel and travel related expenses off-set by a decrease in share-based compensation of $0.2 million. The increase in research and development expenses in the nine month period ended September 30, 2007 as compared to the nine month period ended September 30, 2006 was primarily due to an increase of $1.6 million in share-based compensation expense and $0.4 million in payroll and related employee costs associated with our hiring of additional network and software engineering personnel.

     Research and development expense was composed of the following (in millions):

	For the				For the
	Three Months Ended				Nine months Ended
	September 30,				September 30,
	2007		2006		2007		2006
Share-based compensation	$	0.5	$	0.7	$	2.4	$	0.8
Payroll and related employee costs		0.7		0.5		1.6		1.2
Travel and travel related expenses		0.1		—		0.1		—
Total research and development	$	1.3	$	1.2	$	4.1	$	2.0

     We believe that research and development payroll and related employee costs will continue to increase for the remainder of 2007, as we anticipate continued increases in hiring of development personnel, and make investments in our core technology and refinements to our other service offerings. Overall we expect research and development expenses to decrease as a result of lower share-based compensation expense under SFAS No. 123R.

Interest Expense

	Three months ended September 30,										Nine months ended September 30,
					Increase			Percent							Increase		Percent
	2007		2006		(Decrease)			Change			2007		2006		(Decrease)		Change
			(in thousands)										(in thousands)
Interest expense	$	18	$	373	$	(355	)		(95	)%	$	1,412	$	1,397	$	15		1	%

     Interest expense includes interest paid on our debt obligations as well as amortization of deferred financing costs.

     Interest expense decreased 95%, or $0.4 million to $18,000 for the three months ended September 30, 2007, as compared to $0.4 million for the three months ended September 30, 2006. The $18,000 represents the amortization of loan fees associated with our unused line of credit. The decrease in interest expense for the three-month period ended September 30, 2007, was the result of our repayment of our outstanding credit facilities on June 14, 2007 from the proceeds from our initial public offering. For the nine months ended September 30, 2007, interest expense increased 1%, or $15,000 to $1.4 million, as compared to $1.4 million for the nine months ended September 30, 2006. The increase in interest expense for the nine month period ended September 30, 2007 as compared to the nine month periods ended September 30, 2006 was primarily due to the recognition of expense of approximately $0.5 million of deferred financing fees resulting from the payment of the remaining balance on our Equipment Facility during the three months ended June 30, 2007, and an increase in borrowings, primarily to fund equipment purchases to build out our network. As of September 30, 2007, we had no outstanding balances due on any of our credit facilities. We do not expect to have any interest expense in for the remainder of 2007.

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Interest Income

	Three months ended September 30,									Nine months ended September 30,
					Increase		Percent							Increase		Percent
	2007		2006		(Decrease)		Change			2007		2006		(Decrease)		Change
			(in thousands)									(in thousands)
Interest income	$	2,456	$	79	$	2,377		3,009	%	$	3,118	$	79	$	3,039		3,847	%

     Interest income includes interest earned on invested cash balances and marketable securities.

     Interest income increased to $2.5 million for the three months ended September 30, 2007, as compared to $0.1 million for the three months ended September 30, 2006. For the nine months ended September 30, 2007, interest income increased to $3.1 million, as compared to $0.1 million for the nine months ended September 30, 2006. The increase in interest income in the three- and nine-month periods ended September 30, 2007 as compared to the three- and nine-month periods ended September 30, 2006 was primarily due to an increase in our average cash balance and the investment of the net proceeds from our initial public offering after the repayment of our outstanding credit facilities. In the future, we anticipate interest income to increase, as a result of substantially increased cash, cash equivalent and marketable securities balances.

Other Income

	Three months ended September 30,										Nine months ended September 30,
					Increase			Percent							Increase			Percent
	2007		2006		(Decrease)			Change			2007		2006		(Decrease)			Change
			(in thousands)										(in thousands)
Other income	$	33	$	70	$	(37	)		(52	)%	$	33	$	70	$	(37	)		(52	)%

     Other income primarily consists of net gains from the disposal of assets.

Income Tax Expense (Benefit)

	Three months ended September 30,										Nine months ended September 30,
					Increase			Percent							Increase			Percent
	2007		2006		(Decrease)			Change			2007		2006		(Decrease)			Change
			(in thousands)										(in thousands)
Income tax expense	$	181	$	688	$	(507	)		(74	)%	$	602	$	2,642	$	(2,040	)		(77	)%

     We had an income tax expense during the three- and nine-month periods ended September 30, 2007 of 6% and 3.5%, respectively, of our loss before taxes of $2.9 million and $17.1 million, respectively which was different than our statutory income tax rate due primarily to the effect of non-deductible stock compensation expenses. The three and nine months ended September 30, 2006 had an expense rate of 98% of the loss and an expense rate of 62% of the income before taxes, due to the impact of non-deductible stock based compensation. The effective income tax rate is based upon the estimated income for the year, the composition of the income in different countries, and adjustments, if any, for the potential tax consequences, benefits or resolutions for tax audits.

     During calendar year 2006 (principally in the last six months of the year) and for the first nine months of 2007, approximately $7.6 million and $7.7 million, respectively, of share-based compensation expense was not deductible for tax purposes by us, as certain executives and other employees made tax elections which established tax bases in these awards granted at lower than the fair value recognized within the financial statements. This permanent difference was material to our pre-tax net loss of $17.1 million for the first nine months of 2007. The current unvested awards are expected to generate permanent differences of $0.6 million for the three months ended December 31, 2007 and $2.6 million, $2.6 million and $0.6 million for 2008, 2009 and 2010, respectively, based upon the unvested portion of the equity awards outstanding at September 30, 2007 and the anticipated vesting at the time.

     During the nine months ended September 30, 2007, the Company performed its assessment of the recoverability of deferred tax assets and determined that, in light of increased operating loss levels, its deferred tax assets relating to stock compensation no longer meet the “more likely than not” criteria. In accordance with SFAS No. 109, a charge to expense of approximately $0.5 million was recorded during the quarter ended June 30, 2007 to fully reserve those deferred tax assets existing at December 31, 2006. In preparing its effective income tax rate for 2007, no benefit is being provided for temporary differences that increase deferred tax assets relating to stock-based compensation. Other deferred tax assets remain unreserved, as management believes they are likely to be recovered, given the existence of loss carryback refund availability and the effect of existing deferred tax liabilities.

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Liquidity and Capital Resources

     To date, we have financed our operations primarily through the following transactions:

• private sales of common and preferred stock and subordinated notes;

• an initial public offering of our common stock in June 2007;

• borrowing on credit facilities; and

• cash generated by operations.

     As of September 30, 2007, our cash, cash equivalents and marketable securities totaled $194.2 million.

Operating Activities

     Net cash provided by operating activities increased $9.0 million to $23.5 million for the nine months ended September 30, 2007, compared to $14.5 million for the nine months ended September 30, 2006. The increase in cash provided by operating activities for the nine-month period ended September 30, 2007 was primarily due to increases in non-cash charges of depreciation and amortization, stock-based compensation and accounts receivable charges, and changes in working capital as a result of a increase in accounts receivable, prepaid expenses and other current assets, accounts payable and deferred revenue and other current liabilities, offset by the net loss incurred during the nine months ended September 30, 2007

     We expect that cash provided by operating activities may not be sufficient to cover new purchases of property and equipment during the remainder of 2007. The timing and amount of future working capital changes and our ability to manage our days sales outstanding will also affect the future amount of cash used in or provided by operating activities.

Investing Activities

     Cash used in investing activities increased $58.4 million to $85.7 million for the nine months ended September 30, 2007, compared to $27.3 million for the nine months ended September 30, 2006. Cash used in investing was principally comprised of cash invested in short-tem marketable securities from the proceeds of our IPO and capital expenditures primarily for computer equipment associated with the build-out and expansion of our content delivery network.

     We expect to have significant ongoing capital expenditure requirements, as we continue to invest in and expand our CDN. We currently anticipate making aggregate capital expenditures of approximately $30.0 million to $31.0 million for 2007 and $35.0 million to $40.0 million for 2008.

Financing Activities

     Cash provided by financing activities increased $160.9 million to $183.3 million for the nine months ended September 30, 2007, as compared to $22.4 million for the nine months ended September 30, 2006. The increase is primarily due to net proceeds of approximately $203.9 million from the sale of 14,900,000 shares of common stock in our initial public offering, $3.4 million in reimbursement of litigation expenses from our escrow account during the nine-month period ended September 30, 2007, offset by a net decrease in borrowings of $9.1 million on our bank line. Cash provided by financing activities during the nine months ended September 30, 2006 reflects net proceeds from our July 2006 private equity transaction in which we recorded $126.4 million of net proceeds. This amount was offset by $102.1 million in a share repurchase transaction in 2006, and $12.0 million of net payments on our credit facilities. We agreed to this repurchase transaction as a condition to the closing of our Series B preferred stock financing in July 2006. Pursuant to this transaction, we repurchased shares of common stock at a price of $3.26 per share from existing stockholders and holders of vested stock options and warrants. The terms of these repurchases were established through negotiation between us and the lead investors in the Series B preferred stock financing in order to provide the investors with ownership of a specified percentage of our capital stock following the financing and repurchase transactions. All outstanding shares of our Series A and Series B Convertible Preferred Stock automatically converted in common stock on June 14, 2007 upon the closing of our IPO.

     During the second quarter of 2007, we paid $25.3 million to extinguish the outstanding balances on all of our credit facilities. At September 30, 2007 we had no outstanding balance on any of our credit facilities and we had an unused line of credit of up to $5.0 million dollars. Under the terms of the line of credit, we can borrow up to 50% of the cash balances we hold at the bank, up to a maximum of $5.0 million dollars. We do not anticipate having to utilize the line of credit for the remainder of 2007.

     In connection with our Series B preferred stock financing in July 2006, an escrow account was established with an initial balance of approximately $10.1 million to serve as security for the indemnification obligations of our stockholders tendering shares in that financing and to fund 50% of the ongoing monthly expenses associated with the Akamai litigation. In May 2007, we, the tendering stockholders and the Series B preferred stock investors agreed to distribute $3.7 million of the escrow account to the tendering stockholders upon the closing of our initial public offering. During the nine-month period ended September 30, 2007, we received reimbursements from this escrow of approximately $3.4 million. At September 30, 2007, the balance outstanding in the escrow was $2.3 million. We expect to draw an additional $1.0 million to $1.5 million from this escrow during the remainder of 2007.

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     Changes in cash, cash equivalents and marketable securities are dependent upon changes in, among other things, working capital items such as deferred revenues, accounts payable, accounts receivable and various accrued expenses, as well as changes in our capital and financial structure due to debt repurchases and issuances, stock option exercises, sales of equity investments and similar events.

     We believe that our existing cash and cash equivalents will be sufficient to meet our anticipated cash needs for at least the next 18 months. If the assumptions underlying our business plan regarding future revenue and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or debt securities. If additional funds are raised through the issuance of equity or debt securities, these securities could have rights, preferences and privileges senior to those accruing to holders of common stock, and the terms of such debt could impose restrictions on our operations. The sale of additional equity or convertible debt securities would also result in additional dilution to our stockholders. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, operating results and financial condition could be harmed.

Contractual Obligations, Contingent Liabilities and Commercial Commitments

     In the normal course of business, we make certain long-term commitments for operating leases, primarily office facilities, bandwidth and computer rack space. These leases expire on various dates ranging from 2007 to 2011. We expect that the growth of our business will require us to continue to add to and increase our long-term commitments in 2007 and beyond. As a result of our growth strategies, we believe that our liquidity and capital resources requirements will grow in absolute dollars but will be generally consistent with that of historical periods on an annual basis as a percentage of net revenue.

     The following table presents our contractual obligations and commercial commitments, as of September 30, 2007 over the next five years and thereafter (in thousands):

	Payments Due by Period
			Less than						More than
Contractual Obligations as of September 30, 2007	Total		1 year		1-3 years		3-5 years		5 years
Operating Leases
Bandwidth leases	$	14,206	$	7,839	$	5,466	$	901	$	—
Rack space leases		14,342		7,362		6,945		35		—
Real estate leases		2,877		964		1,754		159		—
Total operating leases		31,425		16,165		14,165		1,095		—
Capital leases		—		—		—		—		—
Bank debt		—		—		—		—		—
Interest on bank debt		—		—		—		—		—
Total commitments	$	31,425	$	16,165	$	14,165	$	1,095	$	—

Off Balance Sheet Arrangements

     We do not have, and have never had, any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Litigation

     We are involved in litigation with Akamai Technologies, Inc. and the Massachusetts Institute of Technology relating to a claim of patent infringement. The action was filed in June 2006. The trial date for the case has recently been set for February 11, 2008. While the outcome of this claim cannot be predicted with certainty, management does not believe that the outcome of this matter will have a material adverse effect on our business. However an unfavorable outcome could seriously impact our ability to conduct our business which, in turn, would have a material adverse impact on our results of operations and financial position.

     Beginning in August 2007, we, certain of our officers and directors, and the firms that served as the lead underwriters in our initial public offering were named as defendants in several purported class action lawsuits. The complaints assert causes of action under Sections 11, 12 and 15 of the Securities Act of 1933, as amended, and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder, on behalf of a professed class consisting of all those who were allegedly damaged as a result of acquiring our common stock between June 8, 2007 and August 8, 2007. The complaints allege, among other things, that we omitted and/or misstated certain facts concerning the seasonality of our business and the degree to which we offer discounted services to our customers. Although we believe that we and the individual defendants have meritorious defenses to the claims made in these complaints and we intend to contest the lawsuits vigorously, an adverse resolution of the lawsuits may have a material adverse effect on our financial position and results of operations in the period in which the lawsuits are resolved.

     See “Legal Proceedings” in Item 1 of Part II of this Quarterly Report on Form 10-Q for further discussion on litigation.

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     We are not able at this time to estimate the range of potential loss nor do we believe that a loss is probable. Therefore, we have made no provision for these lawsuits in our financial statements.

Use of Non-GAAP Financial Measures

     In evaluating our business, we consider and use Non-GAAP revenue, Non-GAAP net income and Adjusted EBITDA as a supplemental measure of our operating performance. We consider Non-GAAP revenue and net income measurements to be an important indicator of our overall performance because it allows us to illustrate the impact of revenue generated from our multi-element contract as well as to eliminate the effects of stock based compensation and litigation expense. We define EBITDA as GAAP net income before net interest expense, provision for income taxes, depreciation and amortization. We define Adjusted EBITDA as EBITDA plus income from our multi-element contract and expenses that we do not consider reflective of our ongoing operations. We use Adjusted EBITDA as a supplemental measure to review and assess our operating performance. We also believe use of Adjusted EBITDA facilitates investors’ use of operating performance comparisons from period to period and company to company by backing out potential differences caused by variations in such items as capital structures (affecting relative interest expense and stock-based compensation expense), the book amortization of intangibles (affecting relative amortization expense), the age and book value of facilities and equipment (affecting relative depreciation expense) and other non cash expenses. We also present Adjusted EBITDA because we believe it is frequently used by securities analysts, investors and other interested parties as a measure of financial performance.

     In our earnings press releases, we have included Non-GAAP revenue and net income, EBITDA and Adjusted EBITDA. The terms Non-GAAP revenue and net income, EBITDA and Adjusted EBITDA are not defined under U.S. generally accepted accounting principles, or U.S. GAAP, and are not measures of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. Our Non-GAAP revenue and net income, EBITDA and Adjusted EBITDA have limitations as analytical tools, and when assessing our operating performance, you should not consider Non-GAAP revenue and net income, EBITDA and Adjusted EBITDA in isolation, or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with U.S. GAAP. Some of these limitations include, but are not limited to:

• EBITDA and Adjusted EBITDA do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;

• they do not reflect changes in, or cash requirements for, our working capital needs;

• they do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;

• they do not reflect income taxes or the cash requirements for any tax payments;

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements;

• while stock-based compensation is a component of operating expense, the impact on our financial statements compared to other companies can vary significantly due to such factors as assumed life of the options and assumed volatility of our common stock; and

• other companies may calculate EBITDA and Adjusted EBITDA differently than we do, limiting their usefulness as comparative measures.

     We compensate for these limitations by relying primarily on our GAAP results and using Non-GAAP Net Income and Adjusted EBITDA only supplementally. Non-GAAP Net Income, EBITDA and Adjusted EBITDA are calculated as follows for the periods presented in thousands:

Reconciliation of Non-GAAP Financial Measures

     In accordance with the requirements of Regulation G issued by the Securities and Exchange Commission, we are presenting the most directly comparable GAAP financial measures and reconciling the non-GAAP financial metrics to the comparable GAAP measures. Reconciling items to GAAP revenue to arrive at non-GAAP revenue represents the difference between the determined value of services delivered which are different from the corresponding revenue recognized for each respective period.

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Reconciliation of GAAP Revenue to Non-GAAP Revenue
(In thousands)
(Unaudited)

	Three Months Ended									Nine Months Ended
	September 30,			June 30,		September 30,		June 30,		September 30,		September 30,
	2007			2007		2006		2006		2007		2006
GAAP Revenue	$	29,190		$	21,436	$	17,454	$	14,841	$	73,979	$	43,133
Deferred Traffic Revenue		(2,645	)		2,645		—		—		—		—
Deferred Custom CDN Services		1,504			820		—		—		2,324		—
Non-GAAP Revenue	$	28,049		$	24,901	$	17,454	$	14,841	$	76,303	$	43,133

Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (Loss)
(In thousands)
(Unaudited)

	Three Months Ended											Nine Months Ended
	September30,			June 30,			September 30,			June 30,		September 30,			September 30,
	2007			2007			2006			2006		2007			2006
GAAP net income (loss)	$	(3,125	)	$	(10,644	)	$	(1,390	)	$	1,722	$	(17,675	)	$	1,602
Share-based compensation		3,955			6,259			3,052			229		15,285			3,393
Litigation expenses		2,002			1,636			825			—		4,523			825
Deferred revenue		(1,141	)		3,465			—			—		2,324			—
Deferred cost of traffic and services		649			(935	)		—			—		(286	)		—
Non-GAAP net income	$	2,340		$	(219	)	$	2,487		$	1,951	$	4,171		$	5,820

Reconciliation of GAAP Net Income (Loss) to EBITDA to Adjusted EBITDA
(In thousands)
(Unaudited)

	Three Months Ended											Nine Months Ended
	September 30,			June 30,			September 30,			June 30,		September 30,			September 30,
	2007			2007			2006			2006		2007			2006
GAAP net income (loss)	$	(3,125	)	$	(10,644	)	$	(1,390	)	$	1,722	$	(17,675	)	$	1,602
Add: depreciation and amortization		5,870			5,194			2,963			2,079		15,889			6,543
Add: interest expense		18			821			373			519		1,412			1,397
Less: interest/other income		(2,490	)		(573	)		(149	)		—		(3,151	)		(149	)
Plus income tax expense		181			221			688			1,125		602			2,642
EBITDA	$	454		$	(4,981	)	$	2,485		$	5,445	$	(2,923	)	$	12,035
Add: share-based compensation		3,955			6,259			3,052			229		15,285			3,393
Add: litigation expenses recoverable from escrow (1)		1,001			818			413			—		2,261			413
Add: deferred traffic and services revenue		(1,141	)		3,465			—			—		2,324			—
Less: deferred traffic and service costs		649			(935	)		—			—		(286	)		—
Adjusted EBITDA	$	4,918		$	4,626		$	5,950		$	5,674	$	16,661		$	15,841

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(1) During 2006, we repurchased stock in a transaction with a total value of $102.1 million. Selling stockholders agreed to hold $10.1 million of the proceeds to offset specific claims for reimbursement associated with the Akamai lawsuit and other undisclosed obligations that may arise. For the three–month periods ended September 30, 2007 and 2006, we had $1.0 million and $0.4 million, respectively, of litigation costs subject to reimbursement from this escrow. For the nine–month periods ended September 30, 2007 and 2006, we had $2.3 million and $0.4 million, respectively, of litigation costs subject to reimbursement from this escrow.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

     Our exposure to market risk for changes in interest rates relates primarily to our debt and investment portfolio. In our investment portfolio, we do not use derivative financial instruments. Our investments are primarily with our commercial and investment banks and, by policy, we limit the amount of risk by investing primarily in money market funds, United States Treasury obligations, high-quality corporate and municipal obligations and certificates of deposit. We do not believe that a 10% change in interest rates would have a significant impact on our interest income, operating results or liquidity.

Foreign Currency Risk

     Substantially all of our customer agreements are denominated in U.S. dollars, and therefore our revenue is not subject to foreign currency risk. Because we have operations in Europe and Asia, however, we may be exposed to fluctuations in foreign exchange rates with respect to certain operating expenses and cash flows. Additionally, we may continue to expand our operations globally and sell to customers in foreign locations, potentially with customer agreements denominated in foreign currencies, which may increase our exposure to foreign exchange fluctuations. At this time, we do not have any foreign hedge contracts because exchange rate fluctuations have had little or no impact on our operating results and cash flows.

Inflation Risk

     We do not believe that inflation has had a material effect on our business, financial condition or results of operations. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations.

Item 4. Controls and Procedures

     We are responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in SEC Rule 13a-15(e). We maintain disclosure controls and procedures, as such term is defined in SEC Rule 13a-15(e), that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

     During our third quarter ended September 30, 2007 we were notified by a customer of a billing error. In response, we conducted an internal review of customer contracts and billings. We also implemented a stock administration system during the quarter. In performing the above, we identified material weaknesses in our system of internal controls over the revenue recognition and stock-based compensation processes that required us to restate our previously reported consolidated financial statements for the three and nine months ended September 30, 2006, the three months and year ended December 31, 2006, the three–month period ended March 31, 2007 and the three–and six–month periods ended June 30, 2007. A material weakness is defined as a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. Information with respect to the material weaknesses is as follows:

• In conjunction with a customer inquiry, we conducted an internal review of customer billing files covering a significant portion of our monthly billings for the current period. During this review, we identified one customer that had been under-billed for CDN services delivered. Further review revealed that the billing error had begun in July 2006. These procedures revealed that during our quarter ended September 30, 2006, we did not have sufficient internal controls in place to ensure that customer contract amendments were properly maintained within our customer billing system. This deficiency resulted in our incorrectly updating our customer billing system for contract amendments associated with one customer in July and August 2006. Further, our internal control procedures were not adequate to identify this ongoing customer billing error, which continued until September 2007. The error resulted in our under-billing the customer by

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$1.6 million, which has since been billed to and collected from the customer. As a result of correcting these errors, revenue increased for each of the three months ended September 30, 2006, December 31, 2006, March 31, 2007 and June 30, 2007 by $0.4 million, $0.5 million, $0.5 million and $0.2 million, respectively.

•

During the third quarter ended September 30, 2007, we engaged a third party stock administration firm to administer our employee stock option program. In connection with converting from our previous manual process to an automated computation, we determined that there were errors in the original manual calculation of stock-based compensation under SFAS No. 123R. Specifically, assumptions input for certain stock option and restricted stock grants were in error primarily related to the service period assumption, which affects not only the valuation of the stock options but also the period over which the stock options and restricted stock is recognized. As a result of correcting these errors, stock-based compensation expense increased by $0.1 million for the year ended December 31, 2006, and decreased by $0.5 million and $0.4 million for the three-month periods ended March 31, 2007 and June 30,2007, respectively.

Since the date of discovery of these material weaknesses and through the date of this Quarterly Report on Form 10-Q, we have taken steps which we feel have strengthened our internal controls, including the following actions:

• We have implemented a reconciliation of monthly customer bookings to monthly revenue results. We have established a process of senior management review of revenue by customer on a monthly basis. Further, we have implemented a practice of periodic reviews of customer information in our billing system to customer contract files. Additionally, we completed a reconciliation of the customer billing file to the customer contract file covering a significant portion of our monthly customer billings. No additional material errors were found during this review.

• Previously, we had relied on a manual system to calculate our stock-based compensation expense. During the third quarter which ended September 30, 2007, we engaged a third party company specializing in stock option administration to take over the administration of our stock option and restricted stock plan. In conjunction with this change, we implemented the vendor’s automated stock option and restricted stock accounting system. We feel the implementation of this system coupled with the reconciliation of the input data to the original employee option and restricted stock agreements has improved the accuracy of the stock option and restricted stock data. Notwithstanding the initiation of these remediation actions, the identified material weaknesses in our internal control over financial reporting will not be considered remediated until the new controls are fully implemented and in operation for a sufficient period of time to be evaluated.

• Additionally, we have recently engaged an international accounting firm to commence a review of our overall control environment and assist us in our preparation for compliance under Section 404 of the Sarbanes-Oxley Act.

     Furthermore, SEC rules require that, as a publicly-traded company, we file periodic reports containing our financial statements within a specified time following the completion of quarterly and annual periods. Commencing with our year ending December 31, 2008, we must perform system and process evaluations and testing of our internal controls over financial reporting to allow management and our independent registered public accounting firm to report on the effectiveness of our internal controls over financial reporting, as required under Section 404 of the Sarbanes-Oxley Act. We may experience difficulty in meeting these reporting requirements in a timely manner, particularly if a material weakness or significant deficiencies persist. Even if we are able to report our financial statements accurately and timely, if we do not make all the necessary improvements to address the material weaknesses, continued disclosure of our material weaknesses will be required in future filings with the SEC.

     The actions we have taken to remediate these material weaknesses are subject to continued management review supported by confirmation and testing, as well as oversight by the Audit Committee of our Board of Directors. We cannot assure you that material weaknesses or significant deficiencies will not occur in the future and that we will be able to remediate such weaknesses or deficiencies in a timely manner, which could impair our ability to accurately and timely report our financial position, results of operations or cash flows. See the Risk Factor entitled “If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements could be impaired, which could adversely affect our operating results, our ability to operate our business and investors view of us” in this Quarterly Report on Form 10-Q.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

     In June 2006, Akamai Technologies, Inc., or Akamai, and the Massachusetts Institute of Technology, or MIT, filed a lawsuit against us in the U.S. District Court for the District of Massachusetts alleging that we are infringing two patents assigned to MIT and exclusively licensed by MIT to Akamai. In September 2006, Akamai and MIT expanded their claims to assert infringement of a third, recently issued patent. These two matters have been consolidated by the Court. In addition to monetary relief, including treble damages, interest, fees and costs, the consolidated complaint seeks an order permanently enjoining us from conducting our business in a manner that infringes the relevant patents. A permanent injunction could prevent us from operating our CDN altogether. The Court held a claim

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construction hearing, known as a Markman hearing, on May 17, 2007 and issued a claim construction order on June 29, 2007. The trial date for the case has recently been set for February 11, 2008.

     Akamai and MIT have asserted some of the patents at issue in the current litigation in two previous lawsuits against different defendants. Both cases were filed in the same district court as the current action, and assigned to the same judge currently presiding over the lawsuit filed against us. In one case, Akamai prevailed in part after a jury trial, securing an injunction against the defendant on four claims of the asserted patent. The appeals court upheld the injunction, though it held that two of the four claims of the challenged patent were invalid. Neither lawsuit resulted in settlement or in the issuance of a license to the defendant before the trial. In addition, the second lawsuit ended only when Akamai acquired the defendant prior to final resolution of the case.

     While we believe that the claims of infringement asserted against us by Akamai and MIT in the present litigation are without merit and intend to vigorously defend the action, we cannot assure you that this lawsuit ultimately will be resolved in our favor. An adverse ruling could seriously impact our ability to conduct our business and to offer our products and services to our customers. This, in turn, would harm our revenue, market share, reputation, liquidity and overall financial position. Whether or not we prevail in our litigation, we expect that the litigation will continue to be expensive, time consuming and a distraction to our management in operating our business.

     Beginning in August 2007, we, certain of our officers and directors, and the firms that served as the lead underwriters in our initial public offering have been named as defendants in several purported class action lawsuits filed in the U. S. District Courts for the District of Arizona and the Southern District of New York. The complaints assert causes of action under Sections 11, 12 and 15 of the Securities Act of 1933, as amended, and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder, on behalf of a professed class consisting of all those who were allegedly damaged as a result of acquiring our common stock between June 8, 2007 and August 8, 2007. The complaints allege, among other things, that we omitted and/or misstated certain facts concerning the seasonality of our business and the degree to which we offer discounted services to our customers. Although we believe the individual defendants have meritorious defenses to the claims made in these complaints and intend to contest the lawsuits vigorously, an adverse resolution of the lawsuits may have a material adverse effect on our financial position and results of operations in the period in which the lawsuits are resolved. We are not able at this time to estimate the range of potential loss nor do we believe that a loss is probable. Therefore, there is no provision for these lawsuits in our financial statements.

     From time to time, we also may become involved in legal proceedings arising in the ordinary course of our business.

Item 1A. Risk Factors

     Investments in the equity securities of publicly traded companies involve significant risks. Our business, prospects, financial condition or operating results could be materially adversely affected by any of these risks, as well as other risks not currently known to us or that we currently consider immaterial. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment. In assessing the risks described below, you should also refer to the information contained in this report on Form 10-Q, including our unaudited condensed consolidated financial statements and the related notes, before deciding to purchase any shares of our common stock.

Risks Related to Our Business

Our limited operating history makes evaluating our business and future prospects difficult, and may increase the risk of your investment.

     Our company has only been in existence since 2001. A significant amount of our growth, in terms of employees, operations and revenue, has occurred since 2004. For example, our revenue has grown from $5.0 million in 2003 to $64.3 million in 2006. For the nine-month period ended September 30, 2007 our revenue was $74.0 million. As a consequence, we have a limited operating history which makes it difficult to evaluate our business and our future prospects. We have encountered and will continue to encounter risks and difficulties frequently experienced by growing companies in rapidly changing industries, such as the risks described in this quarterly report on Form 10-Q. If we do not address these risks successfully, our business will be harmed.

If we fail to manage future growth effectively, we may not be able to market and sell our services successfully.

     We have recently expanded our operations significantly, increasing our total number of employees from 29 at December 31, 2004 to 219 at September 30, 2007, and we anticipate that further significant expansion will be required. Our future operating results depend to a large extent on our ability to manage this expansion and growth successfully. Risks that we face in undertaking this expansion include: training new sales personnel to become productive and generate revenue; forecasting revenue; controlling expenses and investments in anticipation of expanded operations; implementing and enhancing our content delivery network, or CDN, and administrative infrastructure, systems and processes; addressing new markets; and expanding international operations. A failure to manage our growth effectively could materially and adversely affect our ability to market and sell our products and services.

A lawsuit has been filed against us and an adverse resolution of this lawsuit could cause us to incur substantial costs and liability or force us to cease providing our CDN services altogether.

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     In June 2006, Akamai Technologies, Inc., or Akamai, and the Massachusetts Institute of Technology, or MIT, filed a lawsuit against us in the U.S. District Court for the District of Massachusetts alleging that we are infringing two patents assigned to MIT and exclusively licensed by MIT to Akamai. In September 2006, Akamai and MIT expanded their claims to assert infringement of a third, recently issued patent. These two matters have been consolidated by the Court. In addition to monetary relief, including treble damages, interest, fees and costs, the consolidated complaint seeks an order permanently enjoining us from conducting our business in a manner that infringes the relevant patents. A permanent injunction could prevent us from operating our CDN altogether. The Court held a claim construction hearing, known as a Markman hearing, on May 17, 2007 and issued a claim construction order on June 29, 2007. The trial date for the case has recently been set for February 11, 2008. See “Legal Proceeding” in Item 1 of Part II of this quarterly report on Form 10-Q for further discussion.

     Akamai and MIT have asserted some of the patents at issue in the current litigation in two previous lawsuits against different defendants. Both cases were filed in the same district court as the current action, and assigned to the same judge currently presiding over the lawsuit filed against us. In one case, Akamai prevailed in part after a jury trial, securing an injunction against the defendant on four claims of the asserted patent. The appeals court upheld the injunction, though it held that two of the four claims of the challenged patent were invalid. Neither lawsuit resulted in settlement or in the issuance of a license to the defendant before the trial. In addition, the second lawsuit ended only when Akamai acquired the defendant prior to final resolution of the case.

     While we believe that the claims of infringement asserted against us by Akamai and MIT in the present litigation are without merit and intend to vigorously defend the action, we cannot assure you that this lawsuit ultimately will be resolved in our favor. An adverse ruling could seriously impact our ability to conduct our business and to offer our products and services to our customers. This, in turn, would harm our revenue, market share, reputation, liquidity and overall financial position. Whether or not we prevail in our litigation, we expect that the litigation will continue to be expensive, time consuming and a distraction to our management in operating our business.

We currently face competition from established competitors and may face competition from others in the future.

     We compete in markets that are intensely competitive, rapidly changing and characterized by vendors offering a wide range of content delivery solutions. We have experienced and expect to continue to experience increased competition. Many of our current competitors, as well as a number of our potential competitors, have longer operating histories, greater name recognition, broader customer relationships and industry alliances and substantially greater financial, technical and marketing resources than we do.

     Our primary competitors include content delivery service providers such as Akamai, Level 3 Communications (which recently acquired Digital Island, SAVVIS Communications’ content delivery network services business) and Internap Network Services Corporation (which recently acquired VitalStream). Also, as a result of the growth of the content delivery market, a number of companies are currently attempting to enter our market, either directly or indirectly, some of which may become significant competitors in the future. Our competitors may be able to respond more quickly than we can to new or emerging technologies and changes in customer requirements. Some of our current or potential competitors may bundle their offerings with other services, software or hardware in a manner that may discourage content providers from purchasing the services that we offer. In addition, as we expand internationally, we face different market characteristics and competition with local content delivery service providers, many of which are very well positioned within their local markets. Increased competition could result in price reductions and revenue shortfalls, loss of customers and loss of market share, which could harm our business, financial condition and results of operations.

We may lose customers if they elect to develop content delivery solutions internally.

     Our customers and potential customers may decide to develop their own content delivery solutions rather than outsource these solutions to CDN services providers like us. This is particularly true as our customers increase their operations and begin expending greater resources on delivering their content using third-party solutions. For example, MusicMatch was our most significant customer in 2004 and one of our top 10 customers in 2005, but following its acquisition by Yahoo! Inc., MusicMatch’s content delivery requirements were in-sourced and it was not a customer of ours at all in 2006. In 2006, one of our top 10 customers, CDN Consulting, which acted as a reseller of our services primarily to MySpace.com, represented approximately 21% of our total revenue. At the end of 2006, MySpace became a direct customer of ours. During the nine month period ended September 30, 2007, sales to the reseller CDN Consulting were less than 1% of revenue after this change. In the quarter ended September 30, 2007, sales to MySpace declined to approximately 2% of our revenue. If we fail to offer CDN services that are competitive to in-sourced solutions, we may lose additional customers or fail to attract customers that may consider pursuing this in-sourced approach, and our business and financial results would suffer.

Rapidly evolving technologies or new business models could cause demand for our CDN services to decline or could cause these services to become obsolete.

     Customers or third parties may develop technological or business model innovations that address content delivery requirements in a manner that is, or is perceived to be, equivalent or superior to our CDN services. If competitors introduce new products or services that compete with or surpass the quality or the price/performance of our services, we may be unable to renew our agreements with existing customers or attract new customers at the prices and levels that allow us to generate attractive rates of return on our investment. For example, one or more third parties might develop improvements to current peer-to-peer technology, which is a technology that relies upon the computing power and bandwidth of its participants, such that this technological approach is better able to deliver content in a

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way that is competitive to our CDN services, or even that makes CDN services obsolete. We may not anticipate such developments and may be unable to adequately compete with these potential solutions. In addition, our customers’ business models may change in ways that we do not anticipate and these changes could reduce or eliminate our customers’ needs for CDN services. If this occurred, we could lose customers or potential customers, and our business and financial results would suffer. As a result of these or similar potential developments, in the future it is possible that competitive dynamics in our market may require us to reduce our prices, which could harm our revenue, gross margin and operating results.

If we are unable to sell our services at acceptable prices relative to our costs, our revenue and gross margins will decrease, and our business and financial results will suffer.

     Prices for content delivery services have fallen in recent years and are likely to fall further in the future. Recently, we have invested significant amounts in purchasing capital equipment to increase the capacity of our content delivery services. For example, in 2006 we invested $40.6 million in capital expenditures and have invested $20.7 million in capital expenditures for the nine month period ended September 30, 2007, primarily for computer equipment associated with the build-out and expansion of our CDN. Our investments in our infrastructure are based upon our assumptions regarding future demand and also prices that we will be able to charge for our services. These assumptions may prove to be wrong. If the price that we are able to charge customers to deliver their content falls to a greater extent than we anticipate, if we over-estimate future demand for our services or if our costs to deliver our services do not fall commensurate with any future price declines, we may not be able to achieve acceptable rates of return on our infrastructure investments and our gross profit and results of operations may suffer dramatically.

     In addition, for the remainder of 2007 and beyond, we expect to increase our expenses, in absolute dollars, in substantially all areas of our business, including sales and marketing, general and administrative, and research and development. For the remainder of 2007 and 2008, as we further expand our CDN, we also expect our capital expenditures to be generally consistent with the high level of expenditures we made in this area in 2006 and the first nine months of 2007. We currently anticipate making aggregate capital expenditures of approximately $30.0 million to $31.0 million for 2007 and $35.0 million to $40.0 million for 2008. As a consequence, we are dependent on significant future growth in demand for our services to provide the necessary gross profit to pay these additional expenses. If we fail to generate significant additional demand for our services, our results of operations will suffer and we may fail to achieve planned or expected financial results. There are numerous factors that could, alone or in combination with other factors, impede our ability to increase revenue, moderate expenses or maintain gross margins, including:

• failure to increase sales of our core services;

• significant increases in bandwidth and rack space costs or other operating expenses;

• inability to maintain our prices relative to our costs;

• failure of our current and planned services and software to operate as expected;

• loss of any significant customers or loss of existing customers at a rate greater than our increase in new customers or our sales to existing customers;

• failure to increase sales of our services to current customers as a result of their ability to reduce their monthly usage of our services to their minimum monthly contractual commitment;

• failure of a significant number of customers to pay our fees on a timely basis or at all or failure to continue to purchase our services in accordance with their contractual commitments; and

• inability to attract high-quality customers to purchase and implement our current and planned services.

If we are unable to develop new services and enhancements to existing services or fail to predict and respond to emerging technological trends and customers’ changing needs, our operating results may suffer.

     The market for our CDN services is characterized by rapidly changing technology, evolving industry standards and new product and service introductions. Our operating results depend on our ability to develop and introduce new services into existing and emerging markets. The process of developing new technologies is complex and uncertain. We must commit significant resources to developing new services or enhancements to our existing services before knowing whether our investments will result in services the market will accept. For example, we recently introduced our Geo-Compliance paid service option, and we do not yet know whether our customers will adopt this offering in sufficient numbers to justify our development costs. Furthermore, we may not execute successfully our technology initiatives because of errors in planning or timing, technical hurdles that we fail to overcome in a timely fashion, misunderstandings about market demand or a lack of appropriate resources. Failures in execution or market acceptance of new services we introduce could result in competitors providing those solutions before we do, which could lead to loss of market share, revenue and earnings.

We depend on a limited number of customers for a substantial portion of our revenue in any fiscal period, and the loss of, or a significant shortfall in demand from, these customers could significantly harm our results of operations.

     During any given fiscal period, a relatively small number of customers typically accounts for a significant percentage of our

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revenue. For example, in 2006, revenue generated by sales to our top 10 customers, in terms of revenue, accounted for approximately 54% of our total revenue. In the nine month period ended September 30, 2007, our top 10 customers, in terms of revenue, accounted for approximately 45% of our total revenue. In 2006, one of these top 10 customers, CDN Consulting, which acted as a reseller of our services primarily to MySpace.com, represented approximately 21% of our total revenue. In the three month period ended September 30, 2007, sales to this reseller and Myspace declined to approximately 2% of our revenue, and prospectively, we expect sales to this reseller and MySpace to continue to be less than 2% for the remainder of 2007. In the past, the customers that comprised our top 10 customers have continually changed, and we also have experienced significant fluctuations in our individual customers’ usage of our services. As a consequence, we may not be able to adjust our expenses in the short term to address the unanticipated loss of a large customer during any particular period. As such, we may experience significant, unanticipated fluctuations in our operating results which may cause us to not meet our expectations or those of stock market analysts, which could cause our stock price to decline.

If we are unable to attract new customers or to retain our existing customers, our revenue could be lower than expected and our operating results may suffer.

     In addition to adding new customers, to increase our revenue, we must sell additional services to existing customers and encourage existing customers to increase their usage levels. If our existing and prospective customers do not perceive our services to be of sufficiently high value and quality, we may not be able to retain our current customers or attract new customers. We sell our services pursuant to service agreements that are generally one year in length. Our customers have no obligation to renew their contracts for our services after the expiration of their initial commitment period, and these service agreements may not be renewed at the same or higher level of service, if at all. Moreover, under some circumstances, some of our customers have the right to cancel their service agreements prior to the expiration of the terms of their agreements. Because of our limited operating history, we have limited historical data with respect to rates of customer service agreement renewals. This fact, in addition to the changing competitive landscape in our market, means that we cannot accurately predict future customer renewal rates. Our customers’ renewal rates may decline or fluctuate as a result of a number of factors, including:

• their satisfaction or dissatisfaction with our services;

• the prices of our services;

• the prices of services offered by our competitors;

• mergers and acquisitions affecting our customer base; and

• reductions in our customers’ spending levels.

     If our customers do not renew their service agreements with us or if they renew on less favorable terms, our revenue may decline and our business will suffer. Similarly, our customer agreements often provide for minimum commitments that are often significantly below our customers’ historical usage levels. Consequently, even if we have agreements with our customers to use our services, these customers could significantly curtail their usage without incurring any penalties under our agreements. In this event, our revenue would be lower than expected and our operating results could suffer.

     It also is an important component of our growth strategy to market our CDN services to industries, such as enterprise and the government. As an organization, we do not have significant experience in selling our services into these markets. We have only recently begun a number of these initiatives, and our ability to successfully sell our services into these markets to a meaningful extent remains unproven. If we are unsuccessful in such efforts, our business, financial condition and results of operations could suffer.

Our results of operations may fluctuate in the future. As a result, we may fail to meet or exceed the expectations of securities analysts or investors, which could cause our stock price to decline.

     Our results of operations may fluctuate as a result of a variety of factors, many of which are outside of our control. If our results of operations fall below the expectations of securities analysts or investors, the price of our common stock could decline substantially. Fluctuations in our results of operations may be due to a number of factors, including:

• our ability to increase sales to existing customers and attract new customers to our CDN services;

• the addition or loss of large customers, or significant variation in their use of our CDN services;

• costs associated with current or future intellectual property lawsuits;

• service outages or security breaches;

• the amount and timing of operating costs and capital expenditures related to the maintenance and expansion of our business, operations and infrastructure;

• the timing and success of new product and service introductions by us or our competitors;

• the occurrence of significant events in a particular period that result in an increase in the use of our CDN services, such as a major media event or a customer’s online release of a new or updated video game;

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• seasonality affecting our customers’ business that impacts demand for our CDN services;

• strikes or work stoppages affecting our customers;

• changes in our pricing policies or those of our competitors;

• the timing of recognizing revenue;

• share-based compensation expenses associated with attracting and retaining key personnel;

• limitations of the capacity of our content delivery network and related systems;

• the timing of costs related to the development or acquisition of technologies, services or businesses;

• general economic, industry and market conditions and those conditions specific to Internet usage and online businesses;

• limitations on usage imposed by our customers in order to limit their online expenses; and

• geopolitical events such as war, threat of war or terrorist actions.

     We believe that our revenue and results of operations may vary significantly in the future and that period-to-period comparisons of our operating results may not be meaningful. You should not rely on the results of one period as an indication of future performance.

After being profitable in 2004 and 2005, we became unprofitable in 2006 and for the nine month period ended September 30, 2007 primarily due to significantly increased stock-based compensation expense, which we expect will increase in 2007 and may increase thereafter, and which could affect our ability to achieve and maintain profitability in the future.

     Our recent adoption of SFAS 123R for 2006 has substantially increased the amount of share-based compensation expense we record and has had a significant impact on our results of operations. After being profitable in 2004 and 2005, we were unprofitable in 2006 and for the nine month period ended September 30, 2007; primarily due to an increase in our share-based compensation expense, which increased from $0.1 million in 2005 to $9.1 million in 2006. For the nine month period ended September 30, 2007, our share-based compensation expense was $15.3 million. This significant increase in share-based compensation expense reflects an increase in the level of option and restricted stock grants coupled with a significant increase in the fair market value per share at the date of grant. Our unrecognized share-based compensation expense totaled $48.6 million at September 30, 2007, of which we expect to amortize $3.6 million during the fourth quarter of 2007, $14.4 million in 2008 and the remainder thereafter based upon the scheduled vesting of the options outstanding at that time. We further expect our share-based compensation expense to decrease in the remainder of 2007 and potentially to increase thereafter as we grant additional options or restricted stock awards. The increased share-based compensation expense could adversely affect our ability to achieve and maintain profitability in the future.

We generate our revenue almost entirely from the sale of CDN services, and the failure of the market for these services to expand as we expect or the reduction in spending on those services by our current or potential customers would seriously harm our business.

     While we offer our customers a number of services associated with our CDN, we generated nearly a substantial majority of our revenue in 2006 and for the nine month period ended September 30, 2007, from charging our customers for the content delivered on their behalf through our CDN. As we do not currently have other meaningful sources of revenue, we are subject to an elevated risk of reduced demand for these services. Furthermore, if the market for delivery of rich media content in particular does not continue to grow as we expect or grows more slowly, then we may fail to achieve a return on the significant investment we are making to prepare for this growth. Our success, therefore, depends on the continued and increasing reliance on the Internet for delivery of media content and our ability to cost-effectively deliver these services. Factors that may have a general tendency to limit or reduce the number of users relying on the Internet for media content or the number of providers making this content available online include a general decline in Internet usage, litigation involving our customers and third-party restrictions on online content, including copyright restrictions, digital rights management and restrictions in certain geographic regions, as well as a significant increase in the quality or fidelity of offline media content beyond that available online to the point where users prefer the offline experience. The influence of any of these factors may cause our current or potential customers to reduce their spending on CDN services, which would seriously harm our operating results and financial condition.

Many of our significant current and potential customers are pursuing emerging or unproven business models which, if unsuccessful, could lead to a substantial decline in demand for our CDN services.

     Because the proliferation of broadband Internet connections and the subsequent monetization of content libraries for distribution to Internet users are relatively recent phenomena, many of our customers’ business models that center on the delivery of rich media and other content to users remain unproven. For example, social media companies have been among our top recent customers and are pursuing emerging strategies for monetizing the user content and traffic on their web sites. Our customers will not continue to purchase our CDN services if their investment in providing access to the media stored on or deliverable through our CDN does not generate a sufficient return on their investment. A reduction in spending on CDN services by our current or potential customers would seriously harm our operating results and financial condition.

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We may need to defend our intellectual property and processes against patent or copyright infringement claims, which would cause us to incur substantial costs.

     Companies, organizations or individuals, including our competitors, may hold or obtain patents or other proprietary rights that would prevent, limit or interfere with our ability to make, use or sell our services or develop new services, which could make it more difficult for us to operate our business. From time to time, we may receive inquiries from holders of patents inquiring whether we infringe their proprietary rights. Companies holding Internet-related patents or other intellectual property rights are increasingly bringing suits alleging infringement of such rights or otherwise asserting their rights and seeking licenses. For example, in June 2006, we were sued by Akamai and MIT alleging we infringed patents licensed to Akamai. Any litigation or claims, whether or not valid, could result in substantial costs and diversion of resources. See “Legal Proceeding” in Item 1 of Part II of this quarterly report on Form 10-Q. In addition, if we are determined to have infringed upon a third party’s intellectual property rights, we may be required to do one or more of the following:

• cease selling, incorporating or using products or services that incorporate the challenged intellectual property;

• pay substantial damages;

• obtain a license from the holder of the infringed intellectual property right, which license may or may not be available on reasonable terms or at all; or

• redesign products or services.

     If we are forced to take any of these actions, our business may be seriously harmed. In the event of a successful claim of infringement against us and our failure or inability to obtain a license to the infringed technology, our business and operating results could be harmed.

Our business will be adversely affected if we are unable to protect our intellectual property rights from unauthorized use or infringement by third parties.

     We rely on a combination of patent, copyright, trademark and trade secret laws and restrictions on disclosure to protect our intellectual property rights. These legal protections afford only limited protection, and we have no currently issued patents. Monitoring infringement of our intellectual property rights is difficult, and we cannot be certain that the steps we have taken will prevent unauthorized use of our intellectual property rights. We have applied for patent protection in a number of foreign countries, but the laws in these jurisdictions may not protect our proprietary rights as fully as in the United States. Furthermore, we cannot be certain that any pending or future patent applications will be granted, that any future patent will not be challenged, invalidated or circumvented, or that rights granted under any patent that may be issued will provide competitive advantages to us.

Any unplanned interruption in the functioning of our network or services could lead to significant costs and disruptions that could reduce our revenue and harm our business, financial results and reputation.

     Our business is dependent on providing our customers with fast, efficient and reliable distribution of application and content delivery services over the Internet. Many of our customers depend primarily or exclusively on our services to operate their businesses. Consequently, any disruption of our services could have a material impact on our customers’ businesses. Our network or services could be disrupted by numerous events, including natural disasters, failure or refusal of our third-party network providers to provide the necessary capacity, failure of our software or CDN delivery infrastructure and power losses. In addition, we deploy our servers in approximately 61 third-party co-location facilities, and these third-party co-location providers could experience system outages or other disruptions that could constrain our ability to deliver our services. We may also experience disruptions caused by software viruses or other attacks by unauthorized users.

     While we have not experienced any significant, unplanned disruption of our services to date, our CDN may fail in the future. Despite our significant infrastructure investments, we may have insufficient communications and server capacity to address these or other disruptions, which could result in interruptions in our services. Any widespread interruption of the functioning of our CDN and related services for any reason would reduce our revenue and could harm our business and financial results. If such a widespread interruption occurred or if we failed to deliver content to users as expected during a high-profile media event, game release or other well-publicized circumstance, our reputation could be damaged severely. Moreover, any disruptions could undermine confidence in our services and cause us to lose customers or make it more difficult to attract new ones, either of which could harm our business and results of operations.

We may have difficulty scaling and adapting our existing architecture to accommodate increased traffic and technology advances or changing business requirements, which could lead to the loss of customers and cause us to incur unexpected expenses to make network improvements.

     Our CDN services are highly complex and are designed to be deployed in and across numerous large and complex networks. Our

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network infrastructure has to perform well and be reliable for us to be successful. The greater the user traffic and the greater the complexity of our products and services, the more resources we will need to invest in additional infrastructure and support. We have spent and expect to continue to spend substantial amounts on the purchase and lease of equipment and data centers and the upgrade of our technology and network infrastructure to handle increased traffic over our network and to roll out new products and services. This expansion is expensive and complex and could result in inefficiencies, operational failures or defects in our network and related software. If we do not expand successfully, or if we experience inefficiencies and operational failures, the quality of our products and services and user experience could decline. From time to time, we have needed to correct errors and defects in our software or in other aspects of our CDN. In the future, there may be additional errors and defects that may harm our ability to deliver our services, including errors and defects originating with third party networks or software on which we rely. These occurrences could damage our reputation and lead us to lose current and potential customers. We must continuously upgrade our infrastructure in order to keep pace with our customers’ evolving demands. Cost increases or the failure to accommodate increased traffic or these evolving business demands without disruption could harm our operating results and financial condition.

Our operations are dependent in part upon communications capacity provided by third-party telecommunications providers. A material disruption of the communications capacity we have leased could harm our results of operations, reputation and customer relations.

     We lease private line capacity for our backbone from a third party provider, Global Crossing Ltd. Our contracts for private line capacity with Global Crossing generally have terms of three years. The communications capacity we have leased may become unavailable for a variety of reasons, such as physical interruption, technical difficulties, contractual disputes, or the financial health of our third party provider. As it would be time consuming and expensive to identify and obtain alternative third-party connectivity, we are dependent on Global Crossing in the near term. Additionally, as we grow, we anticipate requiring greater private line capacity than we currently have in place. If we are unable to obtain such capacity on terms commercially acceptable to us or at all, our business and financial results would suffer. We may not be able to deploy on a timely basis enough network capacity to meet the needs of our customer base or effectively manage demand for our services.

Our business depends on continued and unimpeded access to third-party controlled end-user access networks.

     Our content delivery services depend on our ability to access certain end-user access networks in order to complete the delivery of rich media and other online content to end-users. Some operators of these networks may take measures, such as the deployment of a variety of filters, that could degrade, disrupt or increase the cost of our or our customers’ access to certain of these end-user access networks by restricting or prohibiting the use of their networks to support or facilitate our services, or by charging increased fees to us, our customers or end-users in connection with our services. This or other types of interference could result in a loss of existing customers, increased costs and impairment of our ability to attract new customers, thereby harming our revenue and growth.

     In addition, the performance of our infrastructure depends in part on the direct connection of our CDN to a large number of end-user access networks, known as peering, which we achieve through mutually beneficial cooperation with these networks. If in the future a significant percentage of these network operators elected to no longer peer with our CDN, the performance of our infrastructure could be diminished and our business could suffer.

If our ability to deliver media files in popular proprietary content formats was restricted or became cost-prohibitive, demand for our content delivery services could decline, we could lose customers and our financial results could suffer.

     Our business depends on our ability to deliver media content in all major formats. If our legal right or technical ability to store and deliver content in one or more popular proprietary content formats, such as Adobe Flash or Windows Media, was limited, our ability to serve our customers in these formats would be impaired and the demand for our content delivery services would decline by customers using these formats. Owners of propriety content formats may be able to block, restrict or impose fees or other costs on our use of such formats, which could lead to additional expenses for us and for our customers, or which could prevent our delivery of this type of content altogether. Such interference could result in a loss of existing customers, increased costs and impairment of our ability to attract new customers, which would harm our revenue, operating results and growth.

If we are unable to retain our key employees and hire qualified sales and technical personnel, our ability to compete could be harmed.

     Our future success depends upon the continued services of our executive officers and other key technology, sales, marketing and support personnel who have critical industry experience and relationships that they rely on in implementing our business plan. In particular, we are dependent on the services of our Chief Executive Officer, Jeffrey W. Lunsford and also our Chief Technical Officer, Nathan F. Raciborski. Neither of these officers nor any of our other key employees is bound by an employment agreement for any specific term. In addition, we do not have “key person” life insurance policies covering any of our officers or other key employees, and we therefore have no way of mitigating our financial loss were we to lose their services. There is increasing competition for talented individuals with the specialized knowledge to deliver content delivery services and this competition affects both our ability to retain key employees and hire new ones. The loss of the services of any of our key employees could disrupt our operations, delay the development and introduction of our services, and negatively impact our ability to sell our services.

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Our senior management team has limited experience working together as a group, and may not be able to manage our business effectively.

     Three members of our senior management team, our President and Chief Executive Officer, Jeffrey W. Lunsford, our Chief Financial Officer, Matthew Hale, and our Senior Vice President of Worldwide Sales, Marketing and Services, David M. Hatfield, have been hired since November 2006. As a result, our senior management team has limited experience working together as a group. This lack of shared experience could harm our senior management team’s ability to quickly and efficiently respond to problems and effectively manage our business.

We face risks associated with international operations that could harm our business.

     We have operations and personnel in Japan, the United Kingdom and Singapore, and we currently maintain network equipment in Australia, Canada, France, Germany, Hong Kong, Ireland, Japan, the Netherlands and the United Kingdom. As part of our growth strategy, we intend to expand our sales and support organizations internationally, as well as to further expand our international network infrastructure. We have limited experience in providing our services internationally and such expansion could require us to make significant expenditures, including the hiring of local employees, in advance of generating any revenue. As a consequence, we may fail to achieve profitable operations that will compensate our investment in international locations. We are subject to a number of risks associated with international business activities that may increase our costs, lengthen our sales cycle and require significant management attention.

These risks include:

• increased expenses associated with sales and marketing, deploying services and maintaining our infrastructure in foreign countries;

• competition from local content delivery service providers, many of which are very well positioned within their local markets;

• unexpected changes in regulatory requirements resulting in unanticipated costs and delays;

• interpretations of laws or regulations that would subject us to regulatory supervision or, in the alternative, require us to exit a country, which could have a negative impact on the quality of our services or our results of operations;

• longer accounts receivable payment cycles and difficulties in collecting accounts receivable;

• corporate and personal liability for violations of local laws and regulations;

• currency exchange rate fluctuations; and

• potentially adverse tax consequences.

Internet-related and other laws relating to taxation issues, privacy and consumer protection and liability for content distributed over our network, could harm our business.

     Laws and regulations that apply to communications and commerce conducted over the Internet are becoming more prevalent, both in the United States and internationally, and may impose additional burdens on companies conducting business online or providing Internet-related services such as ours. Increased regulation could negatively affect our business directly, as well as the businesses of our customers, which could reduce their demand for our services. For example, tax authorities abroad may impose taxes on the Internet-related revenue we generate based on where our internationally deployed servers are located. In addition, domestic and international taxation laws are subject to change. Our services, or the businesses of our customers, may become subject to increased taxation, which could harm our financial results either directly or by forcing our customers to scale back their operations and use of our services in order to maintain their operations. In addition, the laws relating to the liability of private network operators for information carried on or disseminated through their networks are unsettled, both in the United States and abroad. Network operators have been sued in the past, sometimes successfully, based on the content of material disseminated through their networks. We may become subject to legal claims such as defamation, invasion of privacy and copyright infringement in connection with content stored on or distributed through our network. In addition, our reputation could suffer as a result of our perceived association with the type of content that some of our customers deliver. If we need to take costly measures to reduce our exposure to these risks, or are required to defend ourselves against such claims, our financial results could be negatively affected.

If we are required to seek additional funding, such funding may not be available on acceptable terms or at all.

     We may need to obtain additional funding due to a number of factors beyond our control, including a shortfall in revenue, increased expenses, increase investment in capital equipment or the acquisition of significant businesses or technologies. We believe that our cash, plus cash from operations will be sufficient to fund our operations and proposed capital expenditures for at least the next 18 months. However, we may need funding before such time. If we do need to obtain funding, it may not be available on commercially reasonable terms or at all. If we are unable to obtain sufficient funding, our business would be harmed. Even if we were able to find outside funding sources, we might be required to issue securities in a transaction that could be highly dilutive to our investors or we may be required to issue securities with greater rights than the securities we have outstanding today. We might also be required to take other actions that could lessen the value of our common stock, including borrowing money on terms that are not favorable to us. If we

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are unable to generate or raise capital that is sufficient to fund our operations, we may be required to curtail operations, reduce our capabilities or cease operations in certain jurisdictions or completely.

Our business requires the continued development of effective business support systems to support our customer growth and related services.

     The growth of our business depends on our ability to continue to develop effective business support systems. This is a complicated undertaking requiring significant resources and expertise. Business support systems are needed for:

• implementing customer orders for services;

• delivering these services; and

• timely billing for these services.

     Because our business plan provides for continued growth in the number of customers that we serve and services offered, there is a need to continue to develop our business support systems on a schedule sufficient to meet proposed service rollout dates. The failure to continue to develop effective business support systems could harm our ability to implement our business plans and meet our financial goals and objectives.

If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements could be impaired, which could adversely affect our operating results, our ability to operate our business and investors’ views of us.

     We must ensure that we have adequate internal financial and accounting controls and procedures in place so that we can produce accurate financial statements on a timely basis. We are required to spend considerable effort on establishing and maintaining our internal controls, which is costly and time-consuming and needs to be re-evaluated frequently. We have very limited experience in designing and testing our internal controls. For example, during the third quarter of 2007, we discovered material weaknesses in our system of internal controls over our revenue recognition and stock-based compensation processes that required us to restate our previously reported consolidated financial statements for the three and nine months ended September 30, 2006, the three months and year ended December 31, 2006, the three months ended March 31, 2007, and the three and six months ended June 30, 2007. We are in the process of documenting, reviewing and, where appropriate, improving our internal controls and procedures. As a newly public company we will be required to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, which will require annual management assessments of the effectiveness of our internal control over financial reporting. In addition, we will be required to file a report by our independent registered public accounting firm addressing these assessments beginning with our Annual Report on Form 10-K for the year ended December 31, 2008. Both we and our independent auditors will be testing our internal controls in anticipation of being subject to Section 404 requirements and, as part of that documentation and testing, may identify areas for further attention and improvement. Implementing any appropriate changes to our internal controls may entail substantial costs to modify our existing financial and accounting systems, take a significant period of time to complete, and distract our officers, directors and employees from the operation of our business. These changes may not, however, be effective in maintaining the adequacy of our internal controls, and any failure to maintain that adequacy, or a consequent inability to produce accurate financial statements on a timely basis, could increase our operating costs and could materially impair our ability to operate our business. In addition, investors’ perceptions that our internal controls are inadequate or that we are unable to produce accurate financial statements may seriously affect our stock price.

Changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and affect our reported results of operations.

     A change in accounting standards or practices can have a significant effect on our operating results and may affect our reporting of transactions completed before the change is effective. New accounting pronouncements and varying interpretations of existing accounting pronouncements have occurred and may occur in the future. Changes to existing rules or the questioning of current practices may adversely affect our reported financial results or the way we conduct our business. For example, our recent adoption of SFAS 123R in 2006 has increased the amount of stock-based compensation expense we record. This, in turn, has impacted our results of operations for the periods since this adoption and has made it more difficult to evaluate our recent financial results relative to prior periods.

We have incurred, and will continue to incur significantly increased costs as a result of operating as a public company, and our management is required to devote substantial time to compliance initiatives.

     As a newly public company, we have incurred, and will continue to incur, significant accounting and other expenses that we did not incur as a private company. These expenses include increased accounting, legal and other professional fees, insurance premiums, investor relations costs, and costs associated with compensating our independent directors. In addition, the Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the Securities and Exchange Commission and the Nasdaq Global Market, impose additional requirements on public companies, including requiring changes in corporate governance practices. For example, the listing requirements of the Nasdaq Global Market require that we satisfy certain corporate governance requirements relating to independent directors, audit committees, distribution of annual and interim reports, stockholder meetings, stockholder approvals, solicitation of proxies, conflicts of interest, stockholder voting rights and codes of conduct. Our management and other personnel need to devote a

37

substantial amount of time to these compliance initiatives. Moreover, these rules and regulations have increased our legal and financial compliance costs and make some activities more time-consuming and costly. For example, these rules and regulations make it more difficult and more expensive for us to obtain director and officer liability insurance. These rules and regulations could also make it more difficult for us to identify and retain qualified persons to serve on our board of directors, our board committees or as executive officers.

Failure to effectively expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our services.

     Increasing our customer base and achieving broader market acceptance of our services will depend to a significant extent on our ability to expand our sales and marketing operations. Historically, we have concentrated our sales force at our headquarters in Tempe, Arizona. However, we have recently begun building a field sales force to augment our sales efforts and to bring our sales personnel closer to our current and potential customers. Developing such a field sales force will be expensive and we have limited knowledge in developing and operating a widely dispersed sales force. As a result, we may not be successful in developing an effective sales force, which could cause our results of operations to suffer.

     We believe that there is significant competition for direct sales personnel with the sales skills and technical knowledge that we require. Our ability to achieve significant growth in revenue in the future will depend, in large part, on our success in recruiting, training and retaining sufficient numbers of direct sales personnel. We have expanded our sales and marketing personnel from a total of 13 at December 31, 2004 to 113 at September 30, 2007. New hires require significant training and, in most cases, take a significant period of time before they achieve full productivity. Our recent hires and planned hires may not become as productive as we would like, and we may be unable to hire or retain sufficient numbers of qualified individuals in the future in the markets where we do business. Our business will be seriously harmed if these expansion efforts do not generate a corresponding significant increase in revenue.

If the estimates we make, and the assumptions on which we rely, in preparing our financial statements prove inaccurate, our actual results may be adversely affected.

     Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments about, among other things, taxes, revenue recognition, share-based compensation costs, contingent obligations and doubtful accounts. These estimates and judgments affect the reported amounts of our assets, liabilities, revenue and expenses, the amounts of charges accrued by us, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances and at the time they are made. If our estimates or the assumptions underlying them are not correct, we may need to accrue additional charges that could adversely affect our results of operations, investors may lose confidence in our ability to manage our business and our stock price could decline.

As part of our business strategy, we may acquire businesses or technologies and may have difficulty integrating these operations.

     We may seek to acquire businesses or technologies that are complementary to our business. Acquisitions involve a number of risks to our business, including the difficulty of integrating the operations and personnel of the acquired companies, the potential disruption of our ongoing business, the potential distraction of management, expenses related to the acquisition and potential unknown liabilities associated with acquired businesses. Any inability to integrate operations or personnel in an efficient and timely manner could harm our results of operations. We do not have prior experience as a company in this complex process of acquiring and integrating businesses. If we are not successful in completing acquisitions that we may pursue in the future, we may be required to reevaluate our business strategy, and we may incur substantial expenses and devote significant management time and resources without a productive result. In addition, future acquisitions will require the use of our available cash or dilutive issuances of securities. Future acquisitions or attempted acquisitions could also harm our ability to achieve profitability. We may also experience significant turnover from the acquired operations or from our current operations as we integrate businesses.

Risks Related to Ownership of Our Common Stock

The trading price of our common stock has been, and is likely to continue to be, volatile.

     The trading prices of our common stock and the securities of technology companies generally have been highly volatile. Factors affecting the trading price of our common stock will include:

• variations in our operating results;

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

• commencement or resolution of, or our involvement in, litigation, particularly our current litigation with Akamai and MIT;

38

• recruitment or departure of key personnel;

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

• developments or disputes concerning our intellectual property or other proprietary rights;

• the gain or loss of significant customers;

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

• adoption or modification of regulations, policies, procedures or programs applicable to our business.

     In addition, if the market for technology stocks or the stock market in general experiences loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, operating results or financial condition. The trading price of our common stock might also decline in reaction to events that affect other companies in our industry even if these events do not directly affect us.

We are currently subject to several securities class action lawsuits, the unfavorable outcomes of which might have a material adverse effect on our financial condition, results of operations and cash flows.

     Several putative class action lawsuits have been filed against us, certain of our officers and directors, and the lead underwriters of our recent initial public offering, alleging, among other things, securities laws violations. While we intend to vigorously contest these lawsuits and any similar lawsuits filed against us in the future, we cannot determine the outcome or resolution of these claims or when they might be resolved. In addition to the expense and burden incurred in defending this litigation and any damages that we may suffer, our management’s efforts and attention may be diverted from the ordinary business operations in order to address these claims. If the final resolution of this litigation is unfavorable to us, our financial condition, results of operations and cash flows may be materially adversely affected if our existing insurance coverage is unavailable or inadequate to resolve the matter.

If securities or industry analysts do not publish research or reports about our business, or if they issue an adverse or misleading opinion regarding our stock, our stock price and trading volume could decline.

     The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. If any of the analysts who cover us issue an adverse or misleading opinion regarding our stock, our stock price would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

Insiders have substantial control over us and will be able to influence corporate matters.

     As of September 30, 2007, our directors and executive officers and their affiliates beneficially owned, in the aggregate, approximately 63% of our outstanding common stock, including approximately 37% beneficially owned by investment entities affiliated with Goldman, Sachs & Co. As a result, these stockholders will be able to exercise significant influence over all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions, such as a merger or other sale of our company or its assets. This concentration of ownership could limit other stockholders’ ability to influence corporate matters and may have the effect of delaying or preventing a third party from acquiring control over us.

Anti-takeover provisions in our charter documents and Delaware law could discourage, delay or prevent a change in control of our company and may affect the trading price of our common stock.

     We are a Delaware corporation and the anti-takeover provisions of the Delaware General Corporation Law may discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the person becomes an interested stockholder, even if a change in control would be beneficial to our existing stockholders. In addition, our certificate of incorporation and bylaws may discourage, delay or prevent a change in our management or control over us that stockholders may consider favorable. Our certificate of incorporation and bylaws:

• authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to thwart a takeover attempt;

• provide for a classified board of directors, as a result of which the successors to the directors whose terms have expired will be elected to serve from the time of election and qualification until the third annual meeting following their election;

• require that directors only be removed from office for cause and only upon a majority stockholder vote;

• provide that vacancies on the board of directors, including newly created directorships, may be filled only by a majority vote of directors then in office;

39

• limit who may call special meetings of stockholders;

• prohibit stockholder action by written consent, requiring all actions to be taken at a meeting of the stockholders; and

• require supermajority stockholder voting to effect certain amendments to our certificate of incorporation and bylaws.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

     (a) Not applicable

     (b) On June 7, 2007, our registration statement on Form S-1 (No. 333-141516) was declared effective in connection with our initial public offering, pursuant to which we registered an aggregate of 18,400,000 shares of our common stock, of which we sold 14,900,000 shares and certain selling stockholders sold 3,500,000 shares, including shares subject to the underwriters’ over-allotment option, at a price to the public of $15.00 per share. The offering closed on June 13, 2007, and, as a result, we received net proceeds of approximately $203.9 million (after underwriters’ discounts and commissions of approximately $15.6 million and additional offering-related costs of approximately $4.0 million), and the selling stockholders received net proceeds of approximately $48.8 million (after underwriters’ discounts and commissions of approximately $3.7 million). The managing underwriters of the offering were Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated, Jefferies & Company, Inc., Piper Jaffray & Co. and Friedman, Billings, Ramsey & Co., Inc.

     In June 2007, we used $23.8 million of the net proceeds to repay the outstanding balance of our credit facility with Silicon Valley Bank. We expect to use the remaining net proceeds for capital expenditures, working capital and other general corporate purposes. For the nine-month period ended September 30, 2007, we made capital expenditures of $20.7 million and expect total expenditures for the full year 2007 to be between $30.0 million and $31.0 million. We may also use a portion of our net proceeds to fund acquisitions of complementary businesses, products or technologies. However, we do not have agreements or commitments for any specific acquisitions at this time. Pending the uses described above, we intend to invest the net proceeds in a variety of short-term, interest-bearing, investment grade securities. There has been no material change in the planned use of proceeds from our initial public offering from that described in the final prospectus dated June 7, 2007 filed by us with the SEC pursuant to Rule 424(b).

ITEM 3. DEFAULT UPON SENIOR SECURITIES

     Not applicable

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None

ITEM 5. OTHER INFORMATION

     Not applicable

ITEM 6. EXHIBITS

		Incorporated by Reference
Exhibit						Filing	Provided
Number	Exhibit Description	Form	File No.	Exhibit		Date	Herewith
3.02	Amended Restated Certificate of Incorporation of Limelight Networks, Inc.	S-1	333-141516		3.2	5/21/07
3.04	Amended and Restated Bylaws of Limelight Networks, Inc.	S-1	333-141516		3.4	3/22/07
10.15†	Edge Computing Network Service and License Agreement dated March 1, 2007 between Limelight Networks, Inc. and Microsoft Corporation, and Addendum to the Edge Computing Network Service and License Agreement dated March 19, 2007.						X
31.01	Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rule 13a-14(a).						X
31.02	Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rule 13a-14(a).						X

40

		Incorporated by Reference
Exhibit					Filing	Provided
Number	Exhibit Description	Form	File No.	Exhibit	Date	Herewith
32.01	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 and Securities Exchange Act Rule 13a-14(b).*					X
32.02	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 and Securities Exchange Act Rule 13a-14(b).*					X

*

This certification is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that Limelight Networks, Inc. specifically incorporates it by reference.

†

Confidential treatment has been requested for portions of this exhibit. These portions have been omitted from this Quarterly Report on Form 10-Q and have been filed separately with the Securities and Exchange Commission.

41

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	LIMELIGHT NETWORKS, INC.
Date: November 14, 2007	By:	/s/ Matthew Hale
		Matthew Hale
		Chief Financial Officer
		(Principal Financial Officer)

42

EXHIBIT INDEX

		Incorporated by Reference
Exhibit						Filing	Provided
Number	Exhibit Description	Form	File No.	Exhibit		Date	Herewith
3.02	Amended Restated Certificate of Incorporation of Limelight Networks, Inc.	S-1	333-141516		3.2	5/21/07
3.04	Amended and Restated Bylaws of Limelight Networks, Inc.	S-1	333-141516		3.4	3/22/07
10.15†	Edge Computing Network Service and License Agreement dated March 1, 2007 between Limelight Networks, Inc. and Microsoft Corporation, and Addendum to the Edge Computing Network Service and License Agreement dated March 17, 2007.						X
31.01	Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rule 13a-14(a).						X
31.02	Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rule 13a-14(a).						X
32.01	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 and Securities Exchange Act Rule 13a-14(b).*						X
32.02	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 and Securities Exchange Act Rule 13a-14(b).*						X

*

This certification is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that Limelight Networks, Inc. specifically incorporates it by reference.

†

Confidential treatment has been requested for portions of this exhibit. These portions have been omitted from this Quarterly Report on Form 10-Q and have been filed separately with the Securities and Exchange Commission.

43

EX-10.15

Limelight Networks, Inc.		Microsoft Corporation
2220 West 14th Street		One Microsoft Way
Tempe, AZ 85281		Redmond, WA 98052
Signature:	/s/ Jeffrey W. Lunsford	Signature:	/s/ Kevin Johnson
Printed Name: Jeffrey W. Lunsford		Printed Name: Kevin Johnson
Title: CEO		Title: President, Platforms and Services Division
Date: 3/20/07		Date: 3/9/07

Confidential

[*] Confidential Treatment Requested

Page 34

Contents of this Document

Edge Computing Network Service and License Agreement

Exhibit A-1	Microsoft Edge Computing Network Specifications	2(a), 2(b)3
Exhibit A-2	Microsoft Responsibility in ECN Node Readiness	2(b)4
Exhibit B-1	Microsoft Edge Computing Network Support Services	2(c), 2(f)
Exhibit B-2	Microsoft Edge Computing Professional Services	2(e),2(j)
Exhibit C-1	Limelight Software Inventory	3(a)
Exhibit C-2	Limelight Know-How and Trade Secrets	3(a),11(b)
Exhibit C-3	Limelight Software Specification Definition	3(a)
Exhibit D	Form Co-Location Agreement	2(a)2
Exhibit E	Form Of [*] ECN Node Readiness Certificate	2(b)2
Exhibit F	Criteria For Determining ECN Node Readiness	2(b)2
Exhibit G	Press Release	21(i)

Edge Computing Network Service and License Agreement

[*] Confidential Treatment Requested

1

EXHIBIT A-1

[*] EDGE COMPUTING NETWORK SPECIFICATIONS

The edge computing network is an [*] consisting of individual [*] ECN Nodes connected to each other, and the Internet, which provides an [*] of services, capacity, and connectivity. Each [*] ECN Node will deliver the following services: large file download, small object/file caching, large object/file caching, network storage, live and on-demand streaming, path /hostname resolution, secure content delivery (SSL/HTTPS), infrastructure management (logging, billing, monitoring, alerting, ticketing, replication, [*]), and dynamic computational services. Each [*] ECN Node will be constructed and operated based on Limelight’s content delivery network architecture and the Limelight Software, with additional functionality as provided by Microsoft.

Each [*] ECN Node will comprise the following major components which provide the ECN functionality:

i)	[*] ECN Node equipment infrastructure (servers, switches, routers, and miscellaneous) will be procured and owned by Microsoft and based on specifications recommended by Limelight
ii)	[*] ECN Node space and power procured by Microsoft
iii)	Network facilities [*] and [*] (including [*], if applicable) providing [*] on specifications recommended by Limelight and jointly agreed between Limelight and Microsoft;
iv)	The Limelight Software hosted within the equipment infrastructure as per (i) above
v)	Microsoft Edge Computing Services running on Microsoft owned hardware, using Microsoft public and proprietary software;

which, taken together will yield an operational, Microsoft Edge Computing Network which will operate in compliance with the specifications in this exhibit.

Microsoft and Limelight will mutually agree on the scale (traffic, storage, streams, etc) of each service (small object/file caching, streaming, etc) within each [*] ECN Node, and use agreed upon [*] ECN Node Acceptance Criteria (set forth in Exhibit F) to assure the [*] ECN Node is operating at required levels.

Limelight shall (i) monitor each [*] ECN Node for all parameters that Limelight uses to monitor the existing Limelight content delivery network and hosted servers within their nodes, and (ii) provide Microsoft with (A) monitoring test results, (B) ongoing monitoring operational results and (C) recommended actions based on those test results.

Microsoft has selected the first Edge Node site to be [*] an existing Microsoft Data Center or co-location nearby on the metro ring. Within four weeks of the Effective Date, Microsoft and Limelight will collaborate to develop an appropriate list of cities with deployment dates noting Microsoft’s prioritization and appropriate site selection criteria based on Limelight’s experience.

Timeline: [*].

[*] Confidential Treatment Requested

EXHIBIT A-2

MICROSOFT RESPONSIBILITY IN ECN NODE READINESS

Both parties agree that this list of responsibilities will evolve in accordance with Section 2(b)(4) of the Agreement.

Microsoft has [*] prior to [*] ECN Node activation to provide the responsibilities listed below.

[*] ECN Node Location

• Microsoft/Limelight to cooperate in identifying the [*] ECN Node locations

• Microsoft will provide required access to ECN network hardware and devices so Limelight can effectively install and manage the [*] ECN Node until [*] ECN Node acceptance

• Microsoft will provide Limelight 24/7/365 contact information for all support and service issues and escalation path/contact and contact process

• DC Power Systems

• N+1 redundancy in all power systems

• 48 volt DC power with 1500 — 3000 amps of available power

• Redundant “A” and “B” circuits

• Two hours battery backup at full load

• AC Power Systems

• N+1 redundancy in all power systems

• Parallel redundant Uninterruptible Power Sources (UPS)

• 48-hour backup at full load with power generator

• Environmental Control

• Equipped with High Capacity HVAC systems

• Co-location environment maintained at optimal temperature and humidity levels for equipment

• 24/7/365 HVAC emergency service by certified contactors

• Contracted scheduled and preventative maintenance with certified HVAC contractors

• Fire Protection

• Smoke and high temperature detection and alarm system

• 24/7/365 NOC alerted before temperatures get to danger levels

• Concrete floors and fireproof walls protect datacenter in case of fire in surrounding

• Zone alerts fire extinguishing mechanism.

[*] ECN Node Networking

•	Nodes should be located in a Microsoft facility or carrier-neutral co-locations in major metropolitan areas around the world.
•	Each metro area contains a single logical routing core comprised of redundant routers
•	At minimum there should be redundant connections to the Internet and at least one connection into a Limelight facility (where applicable) and a backbone connection into another city [*] ECN Node location
•	Co-locations within each metro area should be connected together via local fiber rings.
•	Microsoft/Limelight to identify the desired capacity requirements on a per node basis for each [*] ECN Node
•	Microsoft will assure the appropriate level of egress peering and transit capacity exists at each [*] ECN Node, and for all cross connections within each [*] ECN Node, through existing Microsoft networks and / or additional peering agreements.
•	Microsoft should maintain a single ECN ASN on a global basis.
	(A global ASN is necessary to function with the CDN technology from Limelight. For optimized delivery it is best to have consistent routing with our proprietary routing architecture).

[*] Confidential Treatment Requested

EXHIBIT B-1

MICROSOFT EDGE COMPUTING NETWORK SUPPORT SERVICES

Standard Operating Procedure for Production Support —

• Limelight will manage a 24x7x365 Tier 1 operations center for the [*] ECN Node with 24x7x365 Tier 2 and 24x7x365 On-call Tier 3 support.

• Tier 1 is defined as customer/property facing support. The agent must have sufficient technical skills to assess the customer problem, triage, and log, escalate and solve to completion [*] of the Tier 1 call volume at first touch. Tier 1 should identify themselves as “[*] ECN”

• Tier 2 is defined as Operational Support Services, including but not limited to Network Operation, Application Operations, and Hardware Operations. Tier 2 shall respond to all logs from Tier 1 within the OLAs (Operational Service Levels) defined in documentation that Limelight will provide Microsoft prior to the First [*] ECN Node is operational, and drive [*] closure to all open logs, and escalate to Tier 3 when all support options are exhausted within the time period defined in the operation level agreement (OLA). Tier 2 is responsible for identifying and managing RCA’s (Root Cause Analysis) for all problems escalated to Tier 3, and for similar problems re-occurring more than four times in a [ * ] period.

• Tier 3 refers to architectural, engineering and development support necessary to maintain the system. Tier 3 shall operate within the OLA.

• Prioritizing alerts and issues — Issues will be classified in 3 priority levels —

1.	High — e.g. user impact, property outages, significant revenue loss, and property is not rendering, network outage, latency
2.	Medium — e.g. Server/service outages not directly impacting performance and availability of the live sites
3.	Low — e.g. Non critical server/service outages

• Priority Level: The default priority of an alert/ticket is Medium, but property TSGs or a Tier 1 Lead at his/her discretion can change this priority with documentation of justification for escalation.

• Communication Procedures — Any alerts and changes affecting live site operations will be communicated to concerned Microsoft properties and the [*] ECN Node operations staff based on documented procedures

• Escalation procedures

1.	All handoffs between tiers will be documented and confirmed
2.	All Technical Support Guides (TSG), Handoff procedures, troubleshooting steps will be documented and exchanged with Microsoft.

Limelight to provide the following documentation before operations of any [*] ECN Node is transitioned to Microsoft

• Operations Guide

• Service offerings Definitions

• Define roles and responsibilities

• Define current customer SLAs and internal OLAs and process/tools to ensure they are met

• On-boarding process of customers

• Customer communication and escalation procedures

• Process engineering flow (flowchart or step-by-step)

• Knowledge Base articles and documentation

• Security and Systems settings

• Procedures for implementing technology with links to TSG’s

The documentation Limelight provides Microsoft shall fully address and answer the following:

• Definition of day-to-day tasks for each role involved in support of the technology

• What is the process to install the technology?

• What events should be monitored?

• What events would be seen on clients?

[*] Confidential Treatment Requested

• What security issues should the operations team be aware off?

• What kind of response time (SLA) is signed for each activity

• Who is responsible for troubleshooting the servers?

• What are the troubleshooting steps to be taken to manage the servers

• Where are the TSGs to manage the servers located?

• At what point would a Service Request (SR) be distinguished from a client issue as opposed to server issue?

• Who would make that distinction? What are the troubleshooting steps to arrive at that conclusion

• When should an issue be escalated from Tier 1 to Tier 2 to Tier 3?

• When should an issue be escalated to Security team(s) or Test or Development?

• During the escalation process who would be responsible for customer communication

• Monitoring

• What are the different applications and server functions that are monitored?

• How are they monitored?

• What are the thresholds and watermarks?

• How do you know that monitoring is working? (i.e. what systems are in place to monitor the monitoring systems — or is it irrelevant by design?)

• How is the availability of the service determined?

• What metrics are key to “availability” of this service? & how can they be gathered?

• Estimate of how many alarms/events will be seen by the Tier 1 and 2 teams?

• Logging

• What data has been logged?

• What tools are used to reduce and analyze logs?

• What processes are used to respond to demands from law enforcement and regulatory bodies?

• Backups and Disaster Recovery

• Is Disaster Recovery a concern for this service and how is the risk managed?

• What are the recovery points for this service?

• What are the recovery thresholds for data, latency, and uptime? (i.e. what is the tolerance?)

• What needs to be backed up?

• How is a restore and return to normal operations validated?

• Handoff documentation (to enable operational support to be handed off to Microsoft before the end of [*])

• Project Plan

• Description of Deliverables / Customer requirements

• Engineering Design Documentation Acceptance

• Design drawings with formal design review

• Test Plan and Final Analysis report

• Risks / Impact Analysis

• Security Design Documentation and acceptance

• Interdependencies among departments and teams

• Systems Configurations and ACLs

• Definitions/Acronyms

• Automated Alarming / Monitoring

• List of all hosted Microsoft sites, customers, and contact points

• Customer SLAs

• Server Names: Location, Quantity, naming convention, function

• Domain names, Organizational Units, Accounts

• Ownership of the all servers and/or services with customers and SLA details

• Maintenance Contract (High level)

• Project Deliverables Checklist

[*] Confidential Treatment Requested

• Software Design Documents as specified in Exhibit C-3

• List of unresolved defects including reproduction instructions, other analyses, and engineering notes describing possible solutions

[*] Confidential Treatment Requested

EXHIBIT B-2

MICROSOFT EDGE COMPUTING PROFESSIONAL SERVICES

Limelight Consulting Services: Engagement Management, Project Management, CDN Architecture and Design Consulting, Network and Systems Consulting, and Limelight Executive Management Consulting. Microsoft will provide Limelight’s program management staff onsite and remote access to Microsoft’s operation, platform and networking staff in Redmond.

Limelight Software Development Services: Software Project Management, Software Design, Software Development and Quality Assurance. Software development services means the development of software functionality that was not in Limelight’s original specifications or on a schedule that was not Limelight’s original schedule (i.e., either more/different software function than planned or delivery on a schedule other than planned).

Limelight Deployment Services: [*] ECN Node initial configuration and deployment, CDN server configuration and deployment.

At Microsoft’s election, Limelight will meet and discuss the number of hours of Professional Services used with the objective of helping ensure that all [*] ECN Nodes will be deployed without the need for any Additional Professional Services Payment, and the Parties will use good faith efforts to adjust staffing for Professional Services to meet that goal and the objectives of this Agreement.

Total Hours and Hourly Rates for Professional Services:

			Hourly	Total
Category	Title	Total Hours	Rate	Value/Category
Engagement Management	GPM	[*]	[*]	[*]
Project Management	PM	[*]	[*]	[*]
CDN Architecture	Architect	[*]	[*]	[*]
Network Engineering	NW Eng	[*]	[*]	[*]
Software Program Management	PM	[*]	[*]	[*]
Software Design	Prod Mgr	[*]	[*]	[*]
Software Development	Dev	[*]	[*]	[*]
Quality Assurance	Test	[*]	[*]	[*]
Deployment	PM	[*]	[*]	[*]
Executive Management	Management	[*]	[*]	[*]
TOTAL PROFESSIONAL SERVICES HOURS AND VALUE		[*]		[*]

[*] Confidential Treatment Requested

EXHIBIT C-1

LIMELIGHT SOFTWARE INVENTORY

Limelight-Proprietary Modules and Programs:

[*]
[*]

[*]
[*]
[*]

[*]
[*]
[*]
[*]

[*]

[*]
[*]

[*]

Modified Versions of Open Source Software Licensed Pursuant to the [*]:

[*]
[*]
[*]

Modified Versions of Open Source Software Licensed Pursuant to the [*]:

[*]

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EXHIBIT C-2

LIMELIGHT KNOW-HOW AND TRADE SECRETS

• Methods for adapting a [*]

• Techniques for managing the [*]

• Methods of exploiting the [*]

• Methods and techniques for [*]

• Methods and techniques for [*]

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EXHIBIT C-3

LIMELIGHT SOFTWARE SPECIFICATION DEFINITION

Software Specifications include, but are not limited to:

• System designs (conceptual, logical, physical)

• Functional specifications for systems, subsystems, components, and object

• Database schema

• File format definitions

• Network protocol specifications

• API specifications for exposed and/or architected interfaces

• Data flow diagrams

• Network diagrams

• Monitoring procedures and processes

• Test definitions (unit, functional, system, performance, stress) and expected outcomes

Software Construction Specifications include, but are not limited to:

• Identification of compilers, linkers, source code management tools, etc.

• Software specifications for any custom software construction tools (e.g. build automation tools, build verification tools, test automation infrastructure)

• Descriptions of software construction workflow and processes

• Descriptions of test and validation workflow and processes

Tasks Microsoft will perform in its evaluation of Limelight Software may include (and are not limited to):

• Construct Limelight Software in accordance with Software Construction Specifications. Any instance of software which cannot be so constructed shall constitute a Software Error.

• Compare constructed binaries to binaries delivered by Limelight. Any discrepancy which cannot be shown to be irrelevant to the operation of the software (such as a time-of-compilation timestamp) shall constitute a Software Error.

• Compare test definitions against the test code supplied by Limelight. Any defined test for which no test code or documented test procedure was provided shall constitute a Software Error.

• Compare test definitions against Software Specifications. Any requirement or functional specification for which no test definitions were provided shall constitute a Software Error.

• Execute/perform all supplied tests in accordance with Software Construction Specifications. Any test for which actual results do not match the defined expected results shall constitute a Software Error.

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EXHIBIT D

FORM CO-LOCATION AGREEMENT

This Co-location Agreement (the “Agreement”) is made between [Microsoft Entity] (“Customer”) and Limelight Networks, Inc., a Delaware corporation (“Limelight”) and consists of (i) these terms and conditions and (ii) Exhibits A, B, C, D, E, F, G, H and I. This Agreement may be executed by facsimile and/or in multiple counterparts. Once executed by both parties, this Agreement is effective as of the Effective Date shown below. In the event of conflict between this Agreement and Exhibit D herein Exhibit D shall take precedent. Limelight and Customer both consent, and agree to accept, the use of electronic signatures as valid under this Agreement. Furthermore, Limelight and Customer agree that an electronic signature will be considered of identical weight to a handwritten signature.

[MICROSOFT ENTITY]	Limelight Networks, Inc.
Authorized Signature	Authorized Signature
(Print name)	(Print name)
Title	Title
Address:	Address:
Telephone:	Telephone:
Facsimile:	Facsimile:

Effective Date:

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1.	Provision of Services		7
	1.1.	Service Charges and Billing	7
	1.2.	Initial Payment	7
	1.3.	Recurring Charges	7
	1.4.	Additional works / Services	7
	1.5.	Payment	7
2.	Co-location		8
	2.1.	Use of Space	8
	2.2.	Hours of Operation	8
	2.3.	Customer Equipment	8
	2.4.	Access and Security	8
	2.5.	Illegal Use	8
8.	Warranty		9
9.	Limitations of Liability		9
	9.1.	Personal Injury	9
	9.2.	Damage to Customer Equipment	9
	9.3.	Damage to Customer Business	9
	9.4.	Maximum Liability	9
	9.5.	Consequential Loss	9
10.	Indemnification		10
	10.1.	By Customer	10
	10.2.	By Limelight	10
	10.3.	Notice Procedure	10
12.	Termination		10
13.	Survival		11
14.	Insurance		11
15.	Miscellaneous Provisions		11
16.	General		12
Exhibit A to Co-Location Agreement, Quote			13
	Term		13
	Service Charges		13
	Power:		13
	Additional Charges:		13
Exhibit B to Co-Location Agreement, Electrical Schema			14
Exhibit C to Co-Location Agreement, [Limelight’s] Co-location Security and Access Procedures			14
[INSERT]			14
Exhibit D to Co-Location Agreement: Facility Systems and Security Requirements			14
	Exhibit H to Co-Location Agreement: Customer Space		14

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Definitions

“Customer’s Equipment” means the computer equipment, software, networking hardware or other materials placed by or for Customer in the Co-location Space.

“Co-location Premises” means Limelight’s facility at [INSERT].

“Co-location Space Fee” means the charge for the space and power in Limelight’s facility as detailed in Exhibit A Quote.

“Co-location Space” means the physical areas within the Co-location Premises as identified on at Exhibit H Customer Space.

“Quote” means the quote as set out in Exhibit A Quote provided by Limelight and accepted and signed by Customer.

“Service(s)” means the provision of the activation services and the making available of Co-location Space, as more specifically detailed in Exhibit D Facility Systems and Security Requirements.

“Critical Power” shall mean power that is supported by a 2N UPS configuration and a N+1 Generator configuration as detailed in Exhibit B Electrical Schema. If 2N is not available, Limelight will disclose.

“CBEMA Curve” means 240V AC line voltage, as measured at the PDU or applicable standard of measurement mutually agreed to, and maintained within the “No Interruption in Function Region” described in the ITI CBEMA Curve in Exhibit D Facility Systems and Security Requirements Appendix 1 attached hereto.

“Computer Room Air Conditioning Unit(s)” or “CRAC(s)” shall mean the individual air conditioning/cooling devices that regulate temperature and humidity within the Premises raised floor space.

“Environmental Conditions” means the temperature and humidity conditions in Customer Space as described in Exhibit D Facility Systems and Security Requirements Section A.(i)(a).

“HVAC” shall mean the heating, ventilation, and air conditioning system used for environmental regulation and air filtering.

“HVAC Deficiency” shall mean failure to meet HVAC Demand or the failure to maintain the Environmental Conditions within the Allowable Range as defined in Exhibit D Facility Systems and Security Requirements Section A(i) a. An interruption of less than one (1) minute resulting from a switch from utility power to back-up or generator power shall not be included as an HVAC Deficiency.

“HVAC Demand” shall mean the quantity of HVAC required to reject the heat generated by the consumption of electricity within a computer suite in order for Customer to sufficiently conduct its business operations in such customer suite.

“Customer Representatives” mean the individuals separately notified in writing by Customer to Limelight (which shall be updated as necessary by Customer from time to time) and authorized by Customer to enter Customer Space.

“Power Sockets” (the “Power socket(s)”) shall refer to approved electrical power commando sockets installed by Limelight that meet power requirements, usually for 240 volt.

“Power Deficiency” is defined in Exhibit D Facility Systems and Security Requirements Section A(ii)(b).

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“Power Distribution Unit” (“PDU”) shall refer to an electrical device that is used to separate power from a larger source, and deliver it among the data center raised floor space via the static transfer switches (STS where the PDU’s are fitted with STS devices).

“Power whips” (the “Whip(s)”) shall refer to standard electrical cables that are placed between the PDU and the rack/cabinet locations. For power delivery to the rack and/or cabinet, the Whip is connected on one end to the PDU, and on the other end allows for Power Sockets to be connected to it.

“Service Deficiency” means a Power Deficiency or an HVAC Deficiency, or a deficiency resulting from security violations as described in Exhibit D Facility Systems and Security Requirements Section A.(v)(a)(i).

“Static Transfer Switch” (“STS”) is defined as an electrical distribution component that accepts multiple input power sources and automatically and instantaneously switches the flow of electricity among those sources to the equipment drawing electricity from the output.

“Termination Charges” means the charges payable if Customer exercises the option to cease occupancy of the space as detailed in Exhibit A Quote.

1. Provision of Services

Limelight will begin provision of the Services only after it receives and accepts this Agreement and a Quote (in each case) signed by a Customer authorized representative.

1.1.	Service Charges and Billing. In consideration of receipt of the Services, Customer agrees to pay the monthly charges for Services, indicated on the Quote (the, “Service Charges”). Billing for monthly Service Charges will begin on the Effective Date set forth above. Limelight will use its reasonable and commercial endeavors to make the Facility available for the installation of equipment by Customer by [INSERT DESIRED DATE].
1.2.	Initial Payment. Upon Limelight’s acceptance of this Agreement, Customer shall be invoiced for all pre-agreed Service Charges relating to activation at the Co-location Space which will be due [ * ] after the date of completion of the initial installation. Customer shall also be invoiced for each monthly Service Charges and Customer will pay such invoice as set forth below.
1.3.	Recurring Charges. Limelight will bill Customer monthly in advance for the Co-location Space (“Co-location Space Fees”), and Customer will pay such invoice as set forth below.
1.4.	Additional works / Services. In the event that Customer requires Limelight to carry out works or services other than the Services set out in Exhibit D Facility Systems and Security Requirements the parties shall agree on the charges payable in respect of these works or services in writing and in advance (the “Additional Charges”). Limelight shall at the end of each month issue an invoice to Customer in respect of the Additional Charges and Customer shall pay Limelight each invoice as set forth below.
1.5.	Payment. Upon receipt of a correct and undisputed invoice, Customer shall pay the all undisputed portions of the invoice net [ * ] from the date of the invoice. Payments shall be made according to Customer’s then-current payment policies, which include payment via ACH electronic payment to Limelight’s financial institution under instructions supplied by Limelight in Customer’s ACH Electronic Payment form. Limelight shall invoice Customer for all amounts via the Customer Invoice online tool in accordance with the then-current requirements at http://invoice.microsoft.com. All invoices shall be submitted with line-item detail identifying all aspects of the applicable charges provided to Customer. Invoices shall not bear an invoice date earlier than the date on which Limelight shall be entitled to be paid under this Agreement, or if not specified, invoices may be issued monthly in arrears.
1.6.	Customer may dispute any invoice by providing written notice to Limelight within [ * ] of receiving the invoice (each a “Disputed Amount”). All Disputed Amounts that Customer agrees in writing to pay, or that are required to be paid pursuant to a final court order or arbitration award (along

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with any other amounts legally required, e.g., by statute or under this Agreement), shall be paid on the payment terms set forth in Section 1.5. Payment of an invoice without asserting a dispute is not a waiver of any claim or right. Failure to dispute an invoiced amount within the [*] period shall not be deemed a waiver of any claim unknown to Customer at the time.

2. Co-location

2.1.

Use of Space. Limelight shall provide to Customer the Co-location Space, as specified on the Quote. Customer may use the Co-location Space only for the purposes of maintaining and operating Customer Equipment. Limelight will be solely responsible for all activities relating to the operations and maintenance of the Facility, including, without limitation, all major facilities equipment and infrastructure and systems, shipping and receiving stations, shipping company access (ingress and egress), telecommunications systems (but only the telecommunications systems under the Limelight’s control) and utilities. Limelight will adequately staff the Facility for the provision of all Services in accordance with the terms and conditions of this Agreement. Limelight will supply the Co-Location space to the specifications in Exhibit G.

2.2.

Hours of Operation. The Facility will have, at a minimum, the following operating hours:

2.2.1.	All Customer Space will operate 24x7, every day of the year.
2.2.2.	The Facility loading dock (if available) will operate M-F 8:30 a.m. to 4:30 p.m. local time (“Loading Dock Hours”) and will be available to Customer during those times and upon one (1) hour’s notice by Customer’s authorized personnel for all other times.
2.2.3.	On-site security will be present 24x7, every day of the year.
2.2.4.	Limelight’s emergency point of contact will be available 24x7, every day of the year. Availability of Limelight’s electrician during 8:30am to 4:30 pm Monday to Friday and on-call thereafter.

2.3. Customer Equipment. Customer will install Customer Equipment, including bringing appropriate equipment and tools as is required. Customer will remove all packaging for Customer Equipment promptly after installation. Limelight will not, directly or indirectly:

2.3.1.	except as ordered by Customer in a Change Order, move, relocate or otherwise remove Customer Equipment from Customer Space, or allow Customer Equipment to come into possession of any other person or entity, without Customers express prior written consent;
2.3.2.	sell, transfer, dispose, lend, assign, pledge, hypothecate or grant any security interest in any Customer Equipment; or
2.3.3.	Create or place, or permit or suffer to be created or placed by any third party acting on Limelight’s behalf, any lien, mortgage, pledge, security interest, charge or any other encumbrance of any kind whatsoever on any Customer Equipment.

2.4. Access and Security. Customer may access the Co-location Space only in accordance with ‘Limelight’s Co-location Security and Access Procedures’ as set out in Exhibit C.

2.4.1. Limelight will be solely responsible for providing physical and electronic security systems for the Facility perimeter and common areas leading up to and including entry Customer Space. The service level for security and Service Credit for non-compliance are detailed in Exhibit G Service Level Requirements/ Credits, Section A.

2.5. Illegal Use. Customer will cooperate in any investigation of Customer’s alleged illegal, unauthorized or unlawful use or use contrary to any Limelight policy of Limelight facilities, or equipment of any third party or other networks accessed through the Co-location Premises.

3. Local and Long Distance Carriers. (If Available)

Customer will order, maintain and terminate any data and telecommunications circuits provided to Customer by local and long-distance carriers. Limelight offers the Facility as Carrier Neutral and (1) will allow any data or telecommunications provider to utilize existing duct banks to install copper and fiber cabling and to install equipment to both meet-me rooms and (2) will not discriminate or offer preferential treatment to individual carriers and (3) will not charge onerous fees or fees in excess of market rates for the rental or utilization of building entrances, duct banks or meet-me room space.

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4. Other networks.

Customer will pay any fees, obtain any required approvals and consents and comply with any laws or usage policies applicable to transmitting data beyond the Network and/or through other public and private networks. Limelight is not responsible or liable for performance or non-performance of such networks or their inter-connection points.

5. Power Availability and Climate Control.

Limelight warrants (for Customer’s benefit) [*] power availability on either A or B supply for Critical Power and an operating temperature [INSERT FOR SPECIFIC FACILITY] for the Co-location Space measured at top rack level. In the event of a power outage or temperature fluctuation outside the range of 15 ° to 32 ° Celsius temperature not caused by Customer, Limelight will credit Customer’s account the pro-rata Co-Location Space Fees (as a “Service Credit”) associated with the power outage or temperature fluctuation, as detailed in Exhibit G Service Level Requirement / Credits Section B.

6. Payment of Credits

Limelight will credit Customer for any Service Credits within [*] of the Service Credit falling due.

7. No Warranty

NO WARRANTY EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THE SERVICES ARE PROVIDED ON AN AS-IS BASIS, AND CUSTOMER’S USE OF THE SERVICES AND THE CO-LOCATION SPACE ARE AT CUSTOMER’S OWN RISK. LIMELIGHT DOES NOT MAKE, AND HEREBY DISCLAIMS, ANY AND ALL OTHER EXPRESS AND IMPLIED WARRANTIES OR CONDITIONS, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OR CONDITIONS OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT AND TITLE, AND ANY WARRANTIES OR CONDITIONS ARISING FROM A COURSE OF DEALING, USAGE, OR TRADE PRACTICE AND DOES NOT WARRANT THAT THE SERVICES WILL BE UNINTERRUPTED, ERROR-FREE, OR COMPLETELY SECURE.

8. Warranty

8.1.	Authority to agree. Both Parties hereto warrant to each other that they have obtained and are duly authorized to enter into this Agreement
8.2.	Resources. Both Parties hereto warrant they shall provide adequate and sufficient resources to undertake and perform their respective obligations under this Agreement, acting at all time with all due skill, professionalism and attention as befits Limelight and Customer.

9. Limitations of Liability

9.1.	Personal Injury. Nothing in this Agreement shall operate to limit or exclude the respective liability for death, personal injury or liability for fraud caused by the negligence of Limelight or Customer, or the employees of Limelight or Customer.
9.2.	Damage to Customer Equipment. Limelight shall not be liable for damage to, or loss of any of Customer’s Equipment or other property resulting from any cause, other than Limelight breach of this Agreement, its negligence and/or willful misconduct.
9.3.	Damage to Customer Business. Limelight shall not be liable for any indirect or consequential loss or damage related to Customer’s business.
9.4.	Maximum Liability. Either party’s maximum aggregate liability to the other party related to or in connection with this Agreement whether in contract, tort (including negligence), strict liability or otherwise will be limited to the total amount paid by Customer to Limelight hereunder.
9.5.	Consequential Loss. Customer shall not be liable for any indirect or consequential loss or damage howsoever caused.

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10. Indemnification

10.1. By Customer. Customer will indemnify, defend and hold harmless Limelight, its directors, officers, employees, affiliates and customers (collectively, the ‘Limelight Covered Entities’) from and against any and all claims, actions or demands brought against any of the Limelight Covered Entities in connection with the following

10.1.1. any loss suffered by, damage to or injury of any third party, Customer employees, agents, sub-contractors and consultants, and any other third party equipment which loss, damage or injury is caused by or otherwise results from acts or omissions by Customer (collectively, the ‘Customer Covered Claims’).

10.2. By Limelight. Limelight will defend and hold harmless Customer, its directors, officers, employees and affiliates (collectively, the ‘Customer Covered Entities’) from and against any and all claims, actions or demands brought against any of Customer Covered Entities with respect to:

10.2.1. any loss suffered by, damage to or injury of any third party, Limelight employees, agents, sub-contractors and consultants, and any other third party equipment which loss, damage or injury is caused by or otherwise results from acts or omissions by Limelight (collectively, the ‘Limelight Covered Claims’).

10.3. Notice Procedure. Limelight will provide Customer with prompt written notice of each Customer Covered Claim of which Limelight becomes aware, and, at Limelight’s sole option, Limelight may elect to participate in the defense and settlement of any Customer Covered Claim, provided that such participation shall not relieve Customer of any of its obligations under this Clause 10 Customer shall have the right to control the defense of any Customer Covered Claim. Customer will provide Limelight with prompt written notice of each Limelight Covered Claim of which Customer becomes aware, and at Customer’s sole option, Customer may elect to participate in the defense and settlement of Limelight Covered Claim, provided that such participation shall not relieve Limelight of any of its obligations under this Clause 10 Limelight shall control the defense of any Limelight Covered Claim.

11. Term

This Agreement will commence on the Effective Date and shall expire at the end of the contract term specified in the Quote, Exhibit A, unless sooner terminated as provided in Clause 12 below.

12. Termination

12.1.	Non-payment. Limelight may suspend Services to Customer if any amount due hereunder is not paid in full within [*] after Customer is sent an overdue notice. Limelight may terminate this Agreement (or at its option, only the relevant Quote) if any amount due hereunder is not paid in full within [*] after Customer is sent an overdue notice.
12.2.	Insolvency/liquidation. Either party may terminate this Agreement upon written notice to the other party if the other party becomes insolvent or goes into liquidation or makes any voluntary arrangement with its creditors or becomes subject to an examination order, or becomes subject to any legal proceedings relating to insolvency, receivership, liquidation or examination or anything analogous to the foregoing in any jurisdiction.
12.3.	For Other Cause; Convenience. Except as otherwise stated, either party may terminate this Agreement if the other party breaches any material term or condition of this Agreement and fails to cure such breach if capable of remedy within [*] after receipt of written notice of the same. The Customer may, upon 6 months written notice, terminate this Agreement without cause.
12.4.	Effect of Termination. Upon expiration or termination of this Agreement: Limelight may cease providing the Services,

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12.4.1.	Customer shall pay all of Customer payment obligations under this Agreement that accrue as of the date of termination; and
12.4.2.	within [*], Customer will remove all of Customer’s Equipment from the Co-location Premises and any other Limelight premises and return the Co-location Space to Limelight in the same condition as it was prior to Customer installation. If Customer does not remove such property within the [*] period, Limelight at its option and at Customer’s expense may remove and store Customer’s Equipment.

13. Survival

The parties’ respective representations, warranties, and covenants, together with obligations of indemnification, confidentiality and limitations and exclusions of liability will survive the expiration, termination or rescission of this Agreement and continue in full force and effect.

14. Insurance

Limelight shall ensure that all liabilities incurred by Limelight during the provision of the service are adequately covered by insurance in particular regarding Employer’s Liability, (including use in connection with the provision of the services) and Public Liability, Professional indemnity insurance.

15. Miscellaneous Provisions

15.1.	Force Majeure. Other than with respect to failure to make payments due hereunder, neither party shall be liable under this Agreement for delays, failures to perform, damages, losses or destruction, or malfunction of any equipment, or any consequence thereof, caused or occasioned by, or due to fire, earthquake, flood, water, the elements, labor disputes or shortages, utility curtailments and utility power failures which are not as a result of Limelight’s negligence and/or which have a duration more than 48 hours, explosions, civil disturbances, governmental actions, shortages of equipment or supplies, unavailability of transportation, acts or omissions of third parties, or any other cause beyond its reasonable control.
15.2.	Confidentiality. [INCORPORATE BY REFERENCE EXISTING NDA]
15.3.	No Lease. This Agreement is a services agreement and is not intended to and will not constitute a lease of or tenancy or other interest in the Co-Location Space, Co-location Premises or other Limelight premises, or any other real or personal property, and shall in no way confer or impose upon either party any of the rights or obligations of landlord and tenant.
15.4.	Government Regulations. Customer and Limelight will each comply with all applicable government regulations.
15.5.	Assignment. Neither party may assign its rights or delegate its duties under this Agreement either in whole or in part to a third party without the prior written consent of the other which consent will not be unreasonably withheld.
15.6.	Notices. Any required notice hereunder will be given in writing and deemed to have been duly given if delivered personally by hand or by courier; sent by confirmed facsimile; or posted by registered mail or special delivery, return receipt requested postage prepaid to either party at the name and address on a signature page of this Agreement, or at such other address as a party may provide to the other by written notice. Such notice will be deemed to have been given as of the date it is delivered personally or by courier, or seventy two (72) hours after dispatch if sent by special delivery or air courier, or [*] after it is sent by confirmed facsimile or mailed.
15.7.	Relationship of Parties. This Agreement will not establish any relationship of partnership, joint venture, employment, franchise or agency between the parties.

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15.8.	Choice of Law. This Agreement shall be construed and controlled by the laws of the State of Washington. The parties waive all defenses of lack of personal jurisdiction and forum non-conveniens. Process may be served on either party in the manner authorized by applicable law or court rule.
15.9.	Reports. Limelight will provide reports relating to the Services, all in a format and frequency and with content as Customer may reasonably specify to Limelight, as indicated in Exhibit E Reports.

16. General

This Agreement, together with the Quote(s) and Exhibits is the entire agreement and understanding of the parties with respect to the subject matter hereof, and supersedes any other agreement or understanding, written or oral. This Agreement may be modified only through a written instrument signed by both parties. Should any provision of this Agreement be declared void or unenforceable, such provision will be deemed amended to achieve as nearly as possible the same economic effect as the original terms and the remainder of this Agreement will remain in full force and effect. If a conflict arises between a party’s pre-printed business form and this Agreement, this Agreement will take precedence.

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Exhibit A to Co-Location Agreement, Quote

Term

The Term of this Agreement is [INSERT]

Service Charges

Limelight Pricing for Customer

[INSERT]

These charges are based on a total Customer Space of [INSERT] square feet as shown in Exhibit H Customer Space.

Power:

Power / kWh: At cost from [INSERT] + plus [INSERT] per month for humidity and fresh air systems for Computer Suite 1, and an additional [INSERT] for Computer Suite 2 from date of occupancy. An administration charge based on the power consumption table below will be added to the power charges. This system is a shared system which is used for all computer rooms on the first floor of the Facility. Power will be fully metered for all other Customer components and will be re-charged at cost.

Monthly Administration Charges:

Power Usage	Amount
0 to 500,000 Kwatt hours
500,001 to 1,000,000 Kwatt hours
1,000,001 to 1,500,000 Kwatt hours
1,500,001 to 2,000,000 Kwatt hours
Over 2,000,001 Kwatt hours

Additional Charges:

Charges Sheet for change controls request

Task Amount

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Exhibit B to Co-Location Agreement, Electrical Schema

     [INSERT]

Exhibit C to Co-Location Agreement, [Limelight’s] Co-location Security and Access Procedures

     [INSERT]

Exhibit D to Co-Location Agreement: Facility Systems and Security Requirements

     [INSERT]

Exhibit E to Co-Location Agreement, Reports

     [INSERT]

Exhibit G to Co-Location Agreement, Service Level Requirements / Credits

Limelight will at all times during the term of this Agreement perform in accordance with the service level requirements set forth in this Exhibit G. Limelight and Customer agree that it is extremely difficult and impracticable under the currently known and reasonably foreseeable facts and circumstances to ascertain the actual damages but nonetheless have agreed to a genuine pre-estimate of loss which Customer would incur should Limelight fail to perform its obligations in accordance with the service level requirements set forth in this Exhibit. Accordingly, if Limelight fails to so perform, Customer will be entitled, without limiting any of its other rights or remedies under this Agreement or otherwise, to receive the credits set forth under the heading “Noncompliance” as liquidated damages (and not as a penalty), provided that, nothing in this section shall be interpreted to mean that Customer is entitled to receive credits and/or other damages in excess of the actual damage Customer sustains. Each noncompliance fee identified below is a reasonable, good faith estimate of the damage that Customer would suffer for each failure by Limelight to comply with each corresponding service level requirement, and, subject to any additional remedies referenced in section D of this Exhibit, is Customer’s sole remedy with respect to each such failure.

     [INSERT]

Exhibit H to Co-Location Agreement: Customer Space

     [INSERT]

Exhibit I to Co-Location Agreement: Operations Procedures

     [INSERT]

Exhibit J to Co-Location Agreement: Customer Security Requirements /Definitions

     [INSERT]

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EXHIBIT E

FORM OF [*] ECN NODE READINESS CERTIFICATE

Date of Acceptance:                     

Node Location:                     

                                                

                                               

Site Contact if applicable:                      e-mail:                      phone:                     

			Accept	Punch List
ECN Node Operational Requirements:
	•	Review custom customer configuration and requirement for facility; validate all the contributing components comply.
	•	All devices are configured in Limelight Standard NMS tools	o	o
	•	Confirm all relevant checklists have been completed for circuits, network hardware, system hardware, and soft configuration.	o	o
	•	Verify all configurations with Limelight Engineering standards	o	o
	•	Verify Operating Systems are in accordance with Vendor recommendations	o	o
	•	Validate that the circuits, backbone and egress capacity is inline with system and network configuration.
	•	Validate all Limelight Engineering security components are in compliance.	o	o
Additional Backbone Circuit/s:			o	o
	•	Validate circuit is up and running to Limelight Engineering standards
	•	All [*] sessions are connected and correct policies are applied
	•	All circuit IDs and directly connected, device details verified and	o	o
		logged in spreadsheet/DB
	•	Interface description is in place and set to Limelight Engineering standards	o	o
	•	[*] is reporting interface and data in graph is valid	o	o
	•	Verify engineering allowed a 24 hour burn in time
	•	All relevant groups and management are advised that circuit/s is operational
Additional Peering/Transit Circuit/s:			o	o
	•	Validate circuit/s is up and running to Limelight Engineering standards	o	o
	•	All [*] sessions are connected and correct policies are applied and any special instance notated	o	o
	•	All circuit IDs, directly connected device, and circuit bandwidth details verified and logged in spreadsheet/DB	o	o
	•	Interface description is in place and set to Limelight Engineering standards
	•	[*] is reporting interface and data in graph is valid
	•	All contact information is logged and distributed amongst relevant groups	o	o
Additional Network Devices:
	•	Verify role of device
	•	Validate hardware specs are up to Limelight Engineering standards	o	o
	•	Validate device works on console server(s)
	•	Log device management IP, all interchangeable hardware, software revision, and attached CSM(s) in spreadsheet/DB	o	o
	•	Set 24 hour grace period for “In Production” status
	•	All relevant groups and management are advised that device is operational		o
Network Device Software/Configuration/Policy Change Management:
	•	Review and verify change reason(s) and back out plan(s)
	•	Determine impact to Network and/or Customer services
	•	Notify all relevant customers and peers of maintenance and time line
	•	Track maintenance progression during possible outage
	•	Validate maintenance was completed to specifications and log all issues
	•	Notify all relevant customers and peers that maintenance was completed
Site/Equipment Deployment:
	•	Review schedule timeline and advise if any discrepancies are found
	•	Review maintenance windows for conflicts, determine Network/Customer impact and notify all relevant customers and peers if one is present
	•	Schedule remote hands with relevant POP and verify 24 hours prior that remote hands ticket is still in place and that a technician has been assigned to it.
Performance Testing:
	•	Keynote – Will be used to test Global Availability, and Load Testing
	•	Lab testing – Use of licensed and custom traffic generation software will be used to test the load of the designed solution

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Terms of Acceptance are set forth in Section 2 of the Agreement.

Punch List Items:

Microsoft Corporation	Limelight Networks, Inc.
Name:	Name:
Title:	Title:
Signature:	Signature
Date:	Date:

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EXHIBIT F

CRITERIA FOR DETERMINING ECN NODE READINESS

Limelight will use the ECN process, test and checklist as outlined in Exhibit E. Limelight and Microsoft will jointly develop the specification for each particular [*] ECN Node. Limelight will test the Microsoft instantiated architecture (combination of Limelight Software and Microsoft Hardware Standards) in the Limelight test harness, with the same process and acceptance criteria that Limelight uses to test and accept their own systems. Upon successful testing, Limelight will use the Microsoft instantiation as the basis for its standard deployments. After deployment, Limelight will use the deployment checklist in Exhibit E and successfully conduct the following series of tests (similar to the Content Delivery Service Agreement — Exhibit 4) to ensure the [*] ECN Node is performing at or above that level of service. Once the Node meets all the service level agreement (SLA) requirements Limelight will turn the [*] ECN Node over to Microsoft for acceptance.

Keynote is referenced below — Microsoft and Limelight agreed to use a 3^rd party system such as Keynote or Gomez to perform these tests.

Limelight Networks will generate an artificial load of the lesser of (i) two (2) Gbps and (ii) [*] of ECN capacity for 24 hours and run Keynote or Gomez against the [*] ECN Node to verify performance and availability.

Small Object/File Caching and File [*] Services

Small Object/File Caching Service Levels — Keynote

	North America/Europe		Asia — ROW
Daily Availability (%)		[*]		[*]
Performance Improvement		[*]		[*]
over Origin (%) (when excluding DNS lookup times)

1. Microsoft will select from Keynote’s list of standard groups of agents that are generally available and that have at least thirty five (35) geographically and network globally diverse locations in major metropolitan areas (excludes China).

2. All Keynote test data to be made available via Microsoft’s Keynote test account. For purposes of clarification, all Keynote days are calculated as GMT.

3. Keynote tests (frequency of one test per hour per agent) will be configured to perform two (2) http GET operations each hour according to the model below:

a.	A test file (defined in Section (5) below) will be placed on the Microsoft origin server (i.e., origin.customer.com).
b.	One GET operation will be performed to retrieve the file directly from the origin server (i.e. http://origin.customer.com/testobject).
c.	The other GET operation will be performed to retrieve the file through the [*] ECN Node, by requesting the object from the appropriate customer hostname CNAMEd to Limelight (i.e., http://www.customer.com/testobject, where www.customer.com is CNAMEd to Limelight and configured to pull content from origin.customer.com)

4. The Limelight test object will have a TTL of 6 hours or greater.

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5. The test content will be a file of approximately 10 KB in size or in certain cases; the file may larger if the typical file size of the property using the Limelight service exceeds 10 KB. In the later case, Limelight must approve in advance the file used for testing.

6. Raw data will be trimmed once per day to eliminate any measurements that came from an agent experiencing technical problems during the measurement period.

7. The Availability metrics (as set above) will be based on a daily average of the service and Microsoft’s production web server (measured directly), computed from data captured across all regions and hits.

File [*] Service Levels — Performance and Availability Metrics

Keynote Set:	North America/Europe		Asia-ROW
Daily Availability (%)		[*]		[*]
Daily Performance Improvement		[*]		[*]
over Origin (%) (excluding DNS Lookup)

1. Microsoft will select from Keynote’s list of standard groups of agents that are generally available and that have at least thirty five (35) geographically and global network diverse locations in major metropolitan areas (excludes China).

2. All keynote test data to be made available via Microsoft’s Keynote test account. For purposes of clarification, all Keynote days are calculated as GMT.

3. Keynote tests (frequency of one test per hour per agent) will be configured to perform two (2) http GET operations each hour according to the model below:

a. A test file (as described in Section (5) below) will be placed on the customer’s origin server (i.e., origin.customer.com).

4. One GET operation will be performed to retrieve the file directly from the origin server (i.e. http://origin.customer.com/testobject).

5. The other GET operation will be performed to retrieve the file through the [*] ECN Node, by requesting the object from the appropriate customer hostname CNAMEd to [*] ECN Node (i.e., http://www.customer.com/testobject, where www.customer.com is CNAMEd to [*] ECN Node and configured to pull content from origin.customer.com)

6.	The [*] ECN Node test object will have a TTL of 6 hours or greater.
7.	The test content will be a file of approximately 1 MB in size.

8. Raw data will be trimmed once per day to eliminate any measurements that came from an agent experiencing technical problems during the measurement period.

Service Level Agreements for Streaming, Storage, and DNS Services

Streaming Service Level Agreement — Service Levels

• [*] Uptime — The [*] ECN Node will serve content [*] of the time. [*] uptime is defined as no outages during a 24 hour period.

Monitoring Methodology

1. Microsoft will contract with Keynote Systems to perform the monitoring defined herein. Microsoft will be responsible for the cost of this testing and for coordinating execution of the testing with Keynote, but will provide Limelight with access to the relevant testing account to enable Limelight to track the testing hereunder and investigate any potential performance issues.

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2.	The polling mechanism will request the test file from the [*] ECN Node.
3.	Polling will occur at approximately 15 minute intervals.
4.	Each test request will last 60 seconds during which time various measurements are collected to determine performance under the service commitments described above.
5.	Raw data will be verified at least daily to eliminate any measurements that came from an agent experiencing technical problems during the measurement period.
6.	The test file will meet the following criteria:

a.	The [*] ECN Node test object will have a TTL of 2 hours or greater.
b.	The file storage location will be mutually agreed to by Microsoft and Limelight, but such approval will not be unreasonably withheld.

i.	The file will be a Windows Media file.
ii.	The encoding parameters of the file must be mutually agreed to by Microsoft and Limelight, but such approval will not be unreasonably withheld.

Storage Service Level Agreement — Service Levels

• [*] Uptime — The [*] ECN Node will serve content [*] of the time. [*] Uptime is defined as no Outages in a 24 hour period.

Monitoring Methodology

• From at least six (6) geographically and network diverse locations in major metropolitan areas, Limelight will simultaneously poll a test file residing on the Microsoft’s production servers and on the [*] ECN Node’s network

• The polling mechanism will perform a GET operation for a test file stored on [*] ECN Node Storage:

• Polling will occur at approximately 15 minute intervals.

• Raw data will be trimmed once per day to eliminate any measurements that came from an agent experiencing technical problems during the measurement period.

• The test file will meet the following criteria:

• The [*] ECN Node test object will have a TTL of 0 to ensure that requests are passed through the [*] ECN Node network to the network Storage

• The test content will be a file of approximately 10 KB in size.

DNS Service Level Agreement — Service Levels

• [*] Uptime — The [*] ECN Node will have no outages in a 24 hour period.

Monitoring Methodology

• From at least five (5) geographically and network diverse locations in major metropolitan areas, Limelight will make a request to the hostname CNAME’d to the [*] ECN Node DNS service.

• Polling will occur at approximately 3 minute intervals.

• Raw data will be trimmed once per day to eliminate any measurements that came from an agent experiencing technical problems during the measurement period.

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EXHIBIT G

PRESS RELEASE
LIMELIGHT NETWORKS TEAMS WITH MICROSOFT
TO DELIVER NEXT GENERATION NETWORK

Technology and Services Agreement Will Improve the Performance, Scalability, and Reliability of
Microsoft’s Online Services for Consumers

March XX, 2007 — Tempe, AZ — Limelight Networks, Inc. today announced that it has entered into a major new technology and services agreement with Microsoft under which Limelight will help improve the performance, scalability, and reliability of Internet delivery of media content and online services, including video, music, games, software, and social media, across Microsoft’s global internet properties. Under the agreement, Microsoft and Limelight will cross-license certain technologies, consider joint development projects in the future, and cooperate on extending and improving their respective technology infrastructures. Microsoft and Limelight have also entered into a multi-year relationship under which Limelight Networks will continue to provide global media streaming and content delivery services to Microsoft.

The new technology and services agreement is aimed at radically improving user experiences across the Internet media properties of Microsoft’s globally scaled internet services, which today serve over 460 million unique users per month worldwide. By working together to solve, over time, the Internet’s challenges of media content performance, scale and reliability, Microsoft and Limelight intend to deliver true globally scaled media-caliber experiences to Internet-connected users, to any device and in any format anywhere in the world.

“Today’s digital media initiatives only hint at the full potential of the Internet as a channel for distribution of traditionally produced content and as a platform for the creation of new forms of media and entertainment content,” said xxx, title of Microsoft. “Our agreement with Limelight Networks anticipates Internet audiences and content offerings that are orders of magnitude larger than today. Limelight’s vision, service and technology leadership in Internet delivery of media is a perfect fit with our own vision and initiatives toward the future.”

“Microsoft is widely recognized as a global leader in digital entertainment,” said Jeff Lunsford, chairman and CEO of Limelight Networks. “We are proud to have been chosen for this strategic initiative based on our network and technology’s performance in delivering video for MSNBC.com and game content and video downloads for Xbox Live. Microsoft’s vision for a connected experience closely aligns with our own, including delivery services for the next generation, high definition Internet.”

About Microsoft

Founded in 1975, Microsoft (Nasdaq: MSFT) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

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About Limelight Networks

Limelight Networks is the high performance content delivery network for digital media, providing massively scalable, global delivery solutions for on-demand and live Internet distribution of video, music, games and downloads. Limelight Networks’ infrastructure is optimized for the large object sizes, large content libraries, and large audiences associated with compelling rich media content. Limelight Networks is the content delivery network of choice for more than 700 of the world’s top media companies. For more information, visit: http://www.llnw.com

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Addendum to the

Edge Computing Network Service and License Agreement

     This Addendum to the Edge Computing Network Service and License Agreement (the “Addendum”) between Limelight Networks, Inc., a Delaware corporation (“Limelight”), and Microsoft Corporation, a Washington corporation (“Microsoft”) is effective as of the 19^th day of March, 2007 (“Addendum Effective Date”). This Addendum amends that certain Edge Computing Network Service and License Agreement between Limelight, and Microsoft dated as of the 1st day of March, 2007 (the “Original Agreement”). Capitalized terms used but not defined in this Addendum shall have the meaning ascribed to them in the Original Agreement. Except as expressly set forth in this Addendum, the Original Agreement remains in full force and effect.

Recitals

     WHEREAS, Microsoft and Limelight have executed the Original Agreement and concurrently desire to amend certain terms related to the Limelight Software exception and Traffic Commitment; as set forth in this Addendum;

     NOW, THEREFORE, the Parties hereby agree as follows

Addendum

1. TIME LIMITING LICENSE EXCEPTION. Section 3(c) of the Original Agreement shall be deleted in its entirety and replaced with the following:

     Section 3 (c) Limelight Software License Exception. The license granted by Limelight in Section 3(b) does not include the right to use Limelight Software to [*] during the Exception Period, as defined below. “Exception Period” means the time period commencing on [*] and ending on [*]. Limelight acknowledges and agrees that neither of the following is [*] (i) Microsoft services that are [*], including, but not limited to, those offered under [*], and (ii) Microsoft’s services that are [*]. The Limelight Software License is subject to the limitations expressly set forth in Section 5(a)(3) (Payment of Software License Fee) and Section 17 (d) (Termination/Survival of Limelight Software License).

2. LIMITING LIMELIGHT SOFTWARE TO EXISTING VERSION.

     (a) Replacing Updates with Fixes. The last sentence of Section 3(a) of the Original Agreement shall be deleted in its entirety and replaced with the following:

Limelight Software also includes (i) the know-how and trade secrets expressly set forth in Exhibit C-2 (the “Know-How and Trade Secrets”) and (ii) Fixes.

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     (b) Removing Limelight Software [*] & Updates. Section 3(e) of the Original Agreement shall be deleted in its entirety and replaced with the following:

     Section 3 (e) Limelight Software, Documentation & Fixes. Limelight has no obligation to provide Microsoft [*](“Limelight Software [*]). Limelight shall, through the earlier of [*], and the termination date of this Agreement, provide Microsoft any error corrections intended to mitigate software defects that directly and adversely affect the core service operation, that [*] to the extent that such error corrections are separately identifiable as applicable solely to the Limelight Software, all in [*] and [*] (each a “Fix,” and collectively, the “Fixes”). In no event shall Limelight be required under this Agreement to develop Limelight Software error correction due to a problem that is not attributable to Limelight. Limelight shall, through the earlier of [*], and the termination date of this Agreement, provide Microsoft with reasonable access to intermediate check-ins, final-form [*], designs, diagrams, specifications, requirements, test plans, prototypes and development history for the Limelight Software for which Limelight has the right to disclose [*], and will identify all other software [*].

     (c) Limelight Software License Fee. The last paragraph of Section 5(a)(3) of the Original Agreement shall be deleted in its entirety and replaced with the following:

     For purposes of clarity, the Limelight Software License Fee is the entire payment Microsoft will owe Limelight for Limelight Software license fees, including, Fixes, if any, regardless of how many Fixes Limelight delivers. For purposes of clarity, in the event this Agreement terminates or expires prior to Microsoft’s issuance of the Limelight Software Acceptance, then Microsoft will have no obligation to pay the Limelight Software License Fee and the Limelight Software License shall expire as of the date of termination or expiration, as applicable, of this Agreement.

3. TRAFFIC COMMITMENT.

     (a) Lengthening Traffic Commitment to [*]. The first paragraph of Section 6(c) of the Original Agreement shall be deleted in its entirety and replaced with the following:

During the time period commencing on [*] and ending [*] from the Effective Date, and subject to terms, conditions and limitations set forth in this Agreement, Microsoft shall meet the Traffic Commitment, defined below.

     (b) Increasing Traffic Commitment by [*]. The first sentence of Section 6(c)(1) of the Original Agreement shall be deleted in its entirety and replaced with the following:

“Traffic Commitment” means total usage of CDN Services, where Services are as defined in and used under the Limelight Content Delivery Service Agreement for all Microsoft properties and/or online services in all markets worldwide representing the sum of the billable traffic rate calculated for each month (except for Excluded Service Traffic, defined below) and equal to [*] Mbps-[*] over the

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time period starting [*] (the “Traffic Commitment Start Date”), and ending [*] from the Effective Date (the “Traffic Commitment End Date”), subject to any adjustments as set forth in this Agreement.

     (c) Modifying Adjustments to Traffic Commitment. The first sentence of Section 6(c)(2)(i) of the Original Agreement shall be deleted in its entirety and replaced with the following:

In the event that this Agreement terminates early such that the Term is less than [*], then the Traffic Commitment shall be reduced pro rata based on the actual time period of the Term of this Agreement as compared to [*] (for example, if the Term is [*], then the Traffic Commitment shall be reduced by [*]).

     (d) Including [*] [*] for Traffic Commitment. Section 6(c)(4) of the Original Agreement shall be deleted in its entirety and replaced with the following:

     Section 6(c)(4). Failure to [*] Traffic Commitment.

     (i) [*]. If, by [*] (the “[*] Traffic Commitment End Date”), Microsoft has not met [*] of the Traffic Commitment (the “[*] Traffic Commitment Minimum”), then, subject to all terms, conditions and limitations in this Agreement, Microsoft shall pay Limelight an amount equal to (i) that amount of the [*] Traffic Commitment Minimum not attained as measured in Mbps multiplied by (ii) the weighted average price per Mbps (that is, total invoiced amount in US dollars, or if in another currency, converted into US dollars, divided by the total traffic in Mbps) using the actual traffic volume and invoiced amounts for traffic applicable to the Traffic Commitment over the [*] months prior to the [*] Traffic Commitment End Date (the “[*] Traffic Commitment Payment”).

     (ii) [*]. If, by [*] (the “[*] Traffic Commitment End Date”), Microsoft has not met [*] of the Traffic Commitment (the “[*] Traffic Commitment Minimum”), including any Traffic Commitment satisfied through any prior Traffic Commitment Payments, then, subject to all terms, conditions and limitations in this Agreement, Microsoft shall pay Limelight an amount equal to (i) that amount of the [*] Traffic Commitment Minimum not attained as measured in Mbps multiplied by (ii) the weighted average price per Mbps (that is, total invoiced amount in US dollars, or if in another currency, converted into US dollars, divided by the total traffic in Mbps) using the actual traffic volume and invoiced amounts for traffic applicable to the Traffic Commitment over the [*] months prior to the [*] Traffic Commitment End Date (the “[*] Traffic Commitment Payment”).

     (iii) [*] If, by [*] (the “[*] Traffic Commitment End Date”), Microsoft has not met [*] of the Traffic Commitment (the “[*] Traffic Commitment Minimum”), including any prior Traffic Commitment satisfied through any Traffic Commitment Payments, then, subject to all terms, conditions and limitations in this Agreement, Microsoft shall pay Limelight an amount equal to (i) that amount of the [*] Traffic Commitment Minimum not attained as measured in Mbps multiplied by (ii) the weighted average price per Mbps (that is, total invoiced amount in US dollars, or if in another currency, converted into US

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dollars, divided by the total traffic in Mbps) using the actual traffic volume and invoiced amounts for traffic applicable to the Traffic Commitment over the [*] months prior to the [*] Traffic Commitment End Date (the “[*] Traffic Commitment Payment”).

     (iv) [*]. If, by [*] (the “[*] Traffic Commitment End Date”), Microsoft has not met [*] of the Traffic Commitment (the “[*] Traffic Commitment Minimum”), including any prior Traffic Commitment satisfied through any Traffic Commitment Payments, then, subject to all terms, conditions and limitations in this Agreement, Microsoft shall pay Limelight an amount equal to (i) that amount of the [*] Traffic Commitment Minimum not attained as measured in Mbps multiplied by (ii) the weighted average price per Mbps (that is, total invoiced amount in US dollars, or if in another currency, converted into US dollars, divided by the total traffic in Mbps) using the actual traffic volume and invoiced amounts for traffic applicable to the Traffic Commitment over the [*] months prior to the [*] Traffic Commitment End Date (the “[*] Traffic Commitment Payment”).

     (v) [*] If, by the Traffic Commitment End Date, Microsoft has not met the [*], then, subject to all terms, conditions and limitations in this Agreement, Microsoft shall pay Limelight an amount equal to (i) that amount of the Traffic Commitment not attained as measured in Mbps including any Traffic Commitment satisfied through any prior Traffic Commitment Payments made multiplied by (ii) the weighted average price per Mbps (that is, total invoiced amount in US dollars, or if in another currency, converted into US dollars, divided by the total traffic in Mbps) using the actual traffic volume and invoiced amounts for traffic applicable to the Traffic Commitment over the [*] prior to the Traffic Commitment End Date (the “[*] Traffic Commitment Payment”).

     (vi) For example, if by [*]Microsoft has satisfied [*] Mbps-months of the entire Traffic Commitment, and the weighted average price per Mbps for [*] was [*] per Mbps, then the [*] Traffic Commitment Payment would be equal to:[*], and upon payment of such amount, the amount of Traffic Commitment satisfied as of [*] would be equal to [*] of the Traffic Comment. The [*] Traffic Commitment Payment, [*] Traffic Commitment Payment, [*] Traffic Commitment Payment, [*] Traffic Commitment Payment, and [*] Traffic Commitment Payment are each a “Traffic Commitment Payment,” and collectively the “Traffic Commitment Payments.” Microsoft will pay any Traffic Commitment Payment under the terms of Section 5(c)-(e), subject to Limelight’s submission of an invoice, as set forth in Section 5(d).

4. EXTEND TERM OF AGREEMENT TO [*]. Section 17(a) of the Original Agreement shall be deleted in its entirety and replaced with the following:

     Section 17 (a) Duration. Subject to Section 17(b)-(c) hereof, the period of time during which this Agreement shall be in effect (the “Term”) commences on the Effective Date and shall continue for a period of [*] thereafter. This Agreement shall be renewable by mutual agreement of Microsoft and Limelight.

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In the event of any conflict between this Addendum and Original Agreement, this Addendum shall control.

Limelight Networks, Inc.		Microsoft Corporation
2220 West 14th Street		One Microsoft Way
Tempe, AZ 85281		Redmond, WA 98052
Signature:	/s/ Jeffrey W. Lunsford	Signature:	/s/ Debra Chrapaty
Printed Name: Jeffrey W. Lunsford		Printed Name: Debra Chrapaty
Title: CEO		Title: Vice President
Date: 3/20/07		Date: 3/19/07

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Exhibit-10.15

Edge Computing Network Service and License Agreement

     This Edge Computing Network Service and License Agreement (the “Agreement”) between Limelight Networks, Inc., a Delaware corporation (“Limelight”), and Microsoft Corporation, a Washington corporation (“Microsoft”) is effective as of the 1^st day of March, 2007 (“Effective Date”). Limelight and Microsoft are sometimes jointly referred to as the “Parties” and individually referred to as a “Party.”

Recitals

WHEREAS, Limelight is in the business of providing content delivery network services; and

WHEREAS, Microsoft is the business of providing software, services and Internet technologies for personal and business computing; and

WHEREAS, Microsoft desires to establish an edge computing network and technology that is an extension of currently existing content delivery networks; and

WHEREAS, Microsoft desires to utilize Limelight’s expertise in building, maintaining and supporting an edge computing network; and

WHEREAS, Limelight is prepared to (1) perform certain professional services, (2) perform certain support services, and (3) license software, know how, trade secrets, and pending patent rights pursuant to the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the mutual promises contained herein, the sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

Agreement

1. DEFINITIONS.

     “Advance” shall have the meaning given in Section 5(b).

     “Additional Professional Services Payment” shall have the meaning given in Section 2(e).

     “Agreement” shall mean this Edge Computing Network Service and License Agreement, including all exhibits and other attachments hereto, as the same may be amended from time to time.

     “Catch Up Payment” shall have the meaning given in Section 2(e).

     “Confidential Information” shall have the meaning given in the NDA.

     “CDN” means content delivery network.

     “Disputed Amount” shall have the meaning given in Section 5(e).

     “ECN Node Co-Location Agreement” shall have the meaning given in Section 2(a).

     “Effective Date” shall have the meaning given in the first paragraph of this Agreement.

     “Enhanced [*] Manager” shall have the meaning given in Section 4(a).

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     “Enhanced [*] Manager IPR” shall have the meaning given in Section 4(a).

     “Excluded License” shall have the meaning given in Section 4(b).

     “Excluded Service Traffic” shall have the meaning given in Section 6(c).

     “Excluded Software” shall have the meaning given in Section 3(a).

     “Fees” shall have the meaning given in Section 5(a).

     “Fix” shall have the meaning given in Section 3(e).

     “First [*] ECN Node” shall have the meaning given in Section 2(b).

     “Force Majeure” means any cause beyond a Party’s reasonable control, including acts of war, acts of God, terrorism, earthquake, flood, embargo, riot, sabotage, labor shortage or dispute, governmental act or failure of the Internet (not resulting from the actions or omissions of such Party).

     “Form Co-Location Agreement” shall have the meaning given in Section 2(a).

     “Interconnection Points” shall have the meaning given in Section 8(a).

     “Intellectual Property Rights” means all trade secrets, patents, copyrights, trademarks, moral rights, and any similar rights of any type under the laws of any governmental authority, domestic or foreign, as well as applications for any such rights.

     “Know-How and Trade Secrets” has the meaning given in Section 3(a).

     “Licensed Patents” shall have the meaning given in Section 7(a).

     “Licensed Pending Patents” shall have the meaning given in Section 7(b)

     “Limelight Change of Control” shall mean a transaction or a series of related transactions: (i) in which one or more related parties that did not previously own or control at least a fifty percent (50%) equity interest in Limelight, obtains ownership or control of at least a fifty percent (50%) equity interest in Limelight; or (ii) in which Limelight sells all or substantially all of its assets.

     “Limelight Claims” shall have the meaning given in Section 14(b).

     “Limelight Indemnified Parties” shall have the meaning given in Section 14(b).

     “Limelight Content Delivery Service Agreement” means that certain Content Delivery Service Agreement dated as of March 1, 2007 between Microsoft and Limelight.

     “Limelight Software” shall have the meaning given in Section 3(a).

     “Limelight Software Acceptance” shall have the meaning given in Section 3(d).

     “Limelight Software Delivery Date” shall have the meaning given in Section 3(d).

     “Limelight Software Fee” shall have the meaning given in Section 5(a).

     “Limelight Software [*]” shall have the meaning given in Section 3(e).

     “Limelight Technical Support Director” shall have the meaning given in Section 6(c).

     “Party” or “Parties” shall have the meaning given in the first paragraph of this Agreement.

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     “Microsoft Affiliate” shall mean any entity that directly or indirectly controls, is controlled by or is under common control of Microsoft.

     “Microsoft Claims” shall have the meaning given in Section 14(a).

     “Microsoft Edge Computing Network Support Services” shall have the meaning given in Section 2(c).

     “Microsoft Edge Computing Network Specifications” shall have the meaning given in Section 2(a).

     “[*] ECN Node” and “[*] ECN Nodes” shall have the meaning given in Section 2(a).

     “[*] ECN Node Acceptance” shall have the meaning given in Section 2(b).

     “[*] ECN Node Rejection” shall have the meaning given in Section 2(b).

     “[*] ECN Node Space” shall have the meaning given in Section 2(a).

     “[*] ECN Node Equipment/Connectivity” shall have the meaning given in Section 2(a).

     “Microsoft Indemnified Parties” shall have the meaning given in Section 14(a).

     “Microsoft Modifications” shall have the meaning given in Section 3(f).

     “Microsoft Responsibilities” shall have the meaning given in Section 2(b).

     “[*] Traffic” shall have the meaning given in Section 6(c).

     “MVG” shall mean the Microsoft Vendor Guidelines which may be modified by Microsoft from time to time and which are available at http://www.microsoft.com/about/companyinformation/procurement/process/contracting.asp. In the event there is a conflict between the MVG and this Agreement, then this Agreement shall control.

     “NDA” shall have the meaning given in Section 10(a).

     “Patent Claims” shall have the meaning given in Section 14(a).

     “Peer Route Utilization” shall have the meaning given in Section 8(c).

     “Personal Information” shall have the meaning given in Section 12(a).

     “Professional Services” shall have the meaning given in Section 2(a).

     “Professional Services Fees” shall have the meaning given in Section 5(a).

     “Professional Services Fee End Date” shall have the meaning given in Section 2(e).

     “Publicly Available Software” shall mean each of (i) any software that contains, or is derived in any manner (in whole or in part) from, any software that is distributed as free software, open source software (e.g., Linux) or similar licensing or distribution models; and (ii) any software that requires as a condition of use, modification and/or distribution of such software that such software or other software incorporated into, derived from or distributed with such software (a) be disclosed or distributed in source code form; (b) be licensed for the purpose of making derivative works; or (c) be redistributable at no charge. Publicly Available Software includes, without limitation, software licensed or distributed under any of the following licenses

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or distribution models, or licenses or distribution models similar to any of the following: (a) GNU’s General Public License (GPL) or Lesser/Library GPL (LGPL), (b) The Artistic License (e.g., PERL), (c) the Mozilla Public License, (d) the Netscape Public License, (e) the Sun Community Source License (SCSL), (f) the Sun Industry Source License (SISL), and (g) the Apache Server license.

     “Readiness Criteria” shall have the meaning given in Section 2(b).

     “Services” shall mean Professional Services, Support Services, and any other services performed by Limelight under this Agreement.

     “Software Error” shall have the meaning given in Section 3(d).

     “Streaming” means the transfer of data in a stream of packets that are interpreted and rendered, in real time, by a software application as the packets arrive.

     “Subcontractor” shall have the meaning given in Section 9.

     “Support Services” shall have the meaning given in Section 2(c).

     “Successful Test Deployment” shall have the meaning given in Section 3(d).

     “Support Services Fees” shall have the meaning given in Section 5(a).

     “Traffic Commitment” shall have the meaning given in Section 6(c).

     “Traffic Commitment End Date” shall have the meaning given in Section 6(c).

     “Traffic Commitment Payment” shall have the meaning given in Section 6(c).

     “Traffic Commitment Report” shall have the meaning given in Section 6(c).

     “Traffic Commitment Start Date” shall have the meaning given in Section 6(c).

     “Term” shall have the meaning given in Section 17(a).

     “Transition Period” shall have the meaning given in Section 17(e).

     “Update” shall have the meaning given in Section 3(e)

     “[*] Traffic” shall have the meaning given in Section 6(c).

2. LIMELIGHT SERVICES.

     (a) Building [*] ECN Nodes. Limelight shall provide professional services (“Professional Services”) to assist Microsoft in architecting, designing, and building Microsoft edge computing node facilities at specified locations, as recommended by Limelight and as finally determined by Microsoft, around the world (each, a “[*] ECN Node”, and collectively, the “[*] ECN Nodes”) [*], consistent with the operations, specifications, timelines, and other requirements contained in Exhibit A-1 to this Agreement (“Microsoft Edge Computing Network Specifications”).

     1. Initial Planning. Limelight and Microsoft shall meet one or more times (split between Redmond, WA and Phoenix, AZ) for initial planning to develop a summary plan, along with a detailed plan if the Parties agree that it is immediately

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necessary, for architecting, designing and building the First [*] ECN Node (defined below) integrated with Limelight’s CDN logical locations.

     2. [*] ECN Node Space. Microsoft shall be responsible for obtaining space for [*] ECN Nodes (“[*] ECN Node Space”). To assist Microsoft in obtaining [*] ECN Node Space, at Microsoft’s request, Limelight shall give Microsoft notice if the option is available for Microsoft to obtain [*] ECN Node Space through co-location in Limelight content delivery network facilities. If so, then Microsoft’s use shall be under the terms of the form co-location agreement set forth in Exhibit D (the “Form Co-Location Agreement”). In such case, Limelight and Microsoft shall (i) complete the Form Co-Location Agreement for a particular [*] ECN Node or other necessary equipment (e.g., a single server) (the “ECN Node Co-Location Agreement”) and (ii) sign such ECN Node Co-Location Agreement prior to the deployment of the applicable [*] ECN Node for such ECN Node Co-Location Agreement. Once an ECN Node Co-Location Agreement has been executed by both Parties, Microsoft’s responsibility for all charges associated with such [*] ECN Node (except for Support Services) shall be as set forth in the applicable ECN Node Co-Location Agreement.

     3. [*] ECN Node Equipment & Connectivity. As part of the Professional Services Limelight provides Microsoft under this Agreement, Limelight shall identify in writing the equipment and connectivity needed for [*] ECN Nodes (“[*] ECN Node Equipment/Connectivity”) and shall update the list of identified [*] ECN Node Equipment/Connectivity from time to time as is reasonably necessary. It shall be Microsoft’s responsibility to obtain [*] ECN Node Equipment/Connectivity.

     (b) [*] ECN Node Readiness.

     1. Initial Deployment will be One [*] ECN Node. Limelight and Microsoft agree that the initial deployment under this agreement will be one [*] ECN Node [*] (the “First [*] ECN Node”). Limelight and Microsoft further agree that the First [*] ECN Node will be deployed in Microsoft’s [*] facility or such other location in the United States as the Parties agree. The process for accepting the First [*] ECN Node is set forth below. The Parties agree that no subsequent [*] ECN Nodes will be deployed, and Limelight has no obligation to perform, or to continue to perform, any services in support of the deployment of any subsequent [*] ECN Nodes, until after Microsoft has accepted the First [*] ECN Node and has issued the Limelight Software Acceptance.

     2. Subsequent Deployment of [*] ECN Node. Upon completion of a [*] ECN Node (including, for purposes of clarity, the First [*] ECN Node), Limelight shall provide Microsoft an ECN Node Readiness Certificate in the form of Exhibit E along with all materials supporting such ECN Node Readiness Certificate. The completion criteria that Limelight shall use in assessing ECN Node readiness shall be substantially the same as the criteria that Limelight uses in assessing the readiness of its own new CDN logical locations (the “Readiness Criteria”). The current criteria that Limelight uses in assessing the readiness of its own new CDN logical locations are provided in Exhibit F and may be updated by Limelight from time to time upon notice to Microsoft. Microsoft shall have [*] after Limelight has issued the ECN Node Readiness Certificate to either (i) accept the ECN Node Readiness Certificate (a “[*] ECN Node Acceptance”) or (ii) dispute in good faith the actual readiness of the [*] ECN Node by

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specifying in writing and with reasonable detail how the [*] ECN Node fails to meet the Readiness Criteria (a “[*] ECN Node Rejection”). If Microsoft does not submit a [*] ECN Node Acceptance or [*] ECN Node Rejection to Limelight within the notice period set forth in the preceding sentence, then it shall be deemed that the [*] ECN Node has been accepted. If Microsoft issues a [*] ECN Node Rejection, then Limelight shall have up to [*] to provide conclusive evidence that such [*] ECN Node actually meets the Readiness Criteria. After providing such conclusive evidence, Limelight shall issue the ECN Readiness Certificate for such [*] ECN Node and the [*] ECN Node Acceptance shall be deemed issued for such [*] ECN Node. If Limelight repeatedly fails to deliver any [*] ECN Node with an ECN Node Readiness Certificate accepted by Microsoft within the mutually agreed dates set in accordance with this Agreement, then, unless such failure is caused by Microsoft’s failure to meet its obligations in Section 2(b)(4), Microsoft may, at its option: (i) accept and retain the [*] ECN Node with all rights and obligations as set forth in this Agreement for such [*] ECN Node; (ii) extend the period for acceptance; or (iii) except for cases where the failure to deliver any [*] ECN Node with an ECN Node Readiness Certificate accepted by Microsoft within the mutually agreed dates set in accordance with this Agreement is caused by Force Majeure, terminate this Agreement for cause pursuant to Section 17, provided, however, that, if Microsoft elects to terminate this Agreement under the circumstances provided for in this section, Microsoft need not provide Limelight the cure period specified in Section 17 and Microsoft will only be responsible for those charges that have accrued as of the termination date. For purposes of clarity, Microsoft’s selection of an option (as set forth in the immediate preceding sentence) for one [*] ECN Node, shall not dictate the option, if any, Microsoft may chose for any other applicable [*] ECN Node.

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     3. After Issuing the ECN Node Readiness Certificate. Within a reasonable period of time after issuing the ECN Node Readiness Certificate, Limelight shall (i) to the extent practicable, manage the routing of user content requests for Microsoft-delivered content to the applicable (based on standard criteria, such as logical Internet location and [*] ECN Node availability) [*] ECN Node, (ii) to the extent practicable, manage the satisfaction of user content requests for Microsoft-delivered content from the applicable (based on standard criteria, such as logical Internet location and [*] ECN Node availability) [*] ECN Node; (iii) manage such [*] ECN Node, (iv) monitor the [*] ECN Node for the parameters set forth in Exhibit F, and, (v) deliver all such monitoring results to Microsoft. Limelight will utilize a process for integrating new [*] ECN Nodes into the integrated delivery infrastructure that is similar to Limelight’s own process for integrating its own new CDN logical locations into its infrastructure. This process may include beginning with a minority of deliverable content and gradually increasing the content delivered through the node/location over a period of time, until reaching full utilization of the node/location. At any time that Limelight determines that a [*] ECN Node is not ready for production utilization or is operating in a substandard fashion, or at any time that Microsoft reasonably believes that a [*] ECN Node is not ready for production utilization or is operating in a substandard fashion and so notifies Limelight, Limelight may reduce its utilization of, or cease utilizing completely, that [*] ECN Node until Limelight is able to restore the [*] ECN Node to full readiness. For clarity, all communications facilities charges related to [*] ECN Nodes, including collocation charges, Internet connection charges, variable charges based on traffic and network utilization, network facilities connecting the [*] ECN Node to the Limelight network, and all other charges, shall be (if [*] ECN Node Space is obtained through co-location in Limelight content delivery network facilities) as set forth in the applicable ECN Node Co-Location Agreement or paid as set forth in Section 2(e), and if Microsoft obtains [*] ECN Node Space independently of Limelight, then Microsoft shall be independently responsible for these charges.

     4. Microsoft Responsibility in ECN Node Readiness. Microsoft acknowledges it has certain responsibilities set forth in Exhibit A-2 that are important in helping ensure each [*] ECN Node is capable of receiving an ECN Node Readiness Certificate (the “Microsoft Responsibilities”). Microsoft and Limelight shall communicate with reasonable frequency about the scope and definition of the Microsoft Responsibilities and Microsoft’s progress in discharging the Microsoft Responsibilities for each [*] ECN Node. Microsoft and Limelight shall amend in writing the definition of the Microsoft Responsibilities as is reasonably necessary (i) within [*] of the Effective Date, and/or (ii) within [*] of the issuance of a [*] ECN Node Acceptance for the First [*] ECN Node. Microsoft shall use commercially reasonable efforts to discharge the Microsoft Responsibilities. In the event that [*] prior to a scheduled [*] ECN Node delivery date Microsoft has not discharged the Microsoft Responsibilities for such [*] ECN Node after the exercise of commercially reasonable efforts, then Microsoft and Limelight shall discuss strategies and alternatives to the given [*] ECN Node, including, but not limited to, deploying such [*] ECN Node in another location.

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     (c) [*] ECN Node Support Services. Limelight shall provide Microsoft services (“Support Services”) to support and maintain [*] ECN Nodes, and the Services defined in the Limelight Content Delivery Service Agreement, all consistent with the specifications, timelines, service levels, and other requirements contained in Exhibit B-1 to this Agreement (“Microsoft Edge Computing Network Support Services”). Limelight will provide to Microsoft (i) Tier 1, Tier 2, and Tier 3 Support Services (as set forth in Exhibit B-1) for the period commencing on the Effective Date plus two months and ending [*] later, and (ii) Tier 3 Support Services for the period commencing [*] after the Effective Date plus two months and ending [*] later.

     (d) New Features for Limelight Software. Except as expressly set forth in Section 3(e), Limelight has no obligation to modify Limelight Software, including, but not limited to, providing new functionality, revised functionality, and earlier implementation of planned functionality.

     (e) Committed Amount of Services; Catch Up Payment; Maximum Service Hours. Microsoft shall have the right to use Professional Services, of the type and up to the maximum number of hours for each type of Professional Services as specified in Exhibit B-2, from the Effective Date through July 31, 2010 (the “Professional Services Fee End Date”) for the purpose of fully deploying twenty-four (24) [*] ECN Nodes resulting in total Professional Services Fees of $[*] (except as set forth below). Limelight shall report to Microsoft (i) monthly on the hours for each type of Professional Service used for such month, and (ii) quarterly on the total hours used as compare to the allocation, projection and maximum number of hours for each type of Professional Services as set forth in Exhibit B-2. At Microsoft’s election, Limelight will meet and discuss the number of hours of Professional Services used with the objective of helping ensure that all [*] ECN Nodes will be deployed without the need for any Additional Professional Services Payment, and the Parties will use good faith efforts to adjust staffing for Professional Services to meet that goal and the objectives of this Agreement. In the event that as of the Professional Service Fee End Date this Agreement has not been terminated and Limelight is not in material breach of this Agreement, then such Professional Services will be deemed fully utilized by Microsoft and all Professional Services Fees will be deemed fully earned by Limelight as of the Professional Service Fee End Date, whether or not all [*] ECN Nodes have been deployed, and Microsoft shall pay Limelight an amount equal to $[*] minus the total amount of Professional Fees accruing as of the Professional Service Fee End Date (the “Catch Up Payment”). In the event that Microsoft utilizes Professional Services such that the type and total hours at the corresponding hourly rate of Professional Services (as set forth in Exhibit B-2) totals $[*] or more, then Microsoft shall pay for any additional Professional Services in excess of $[*] at the applicable hourly rates set forth in Exhibit B-2 (the “Additional Professional Services Payment”). Microsoft will pay the Catch Up Payment and any Additional Professional Services Payment under the terms of Section 5(c)-(e), subject to Limelight’s submission of an invoice, as set forth in Section 5(d).

     (f) Additional Items. Modifications to any exhibits may be added to this Agreement from time to time with the mutual written agreement of Limelight and Microsoft and, when so added, such modifications will become part of the applicable exhibit to which it pertains. Except for Fees and Advance set forth in Section 5 (but including all other obligations in Section 5), Limelight shall be responsible at its own cost for any and all equipment and/or software necessary to adequately perform its obligations under this Agreement. Upon Microsoft’s request, Limelight will meet with Microsoft to review Limelight’s performance and any issues

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related to Limelight’s compliance with the performance standards in this Agreement (including, without limitation, the Microsoft Edge Computing Support Services, as set forth in Exhibit B-1). Limelight agrees that it will not use any Microsoft facilities and/or any Microsoft-provided equipment (including any equipment owned, leased or rented by Limelight for performing its obligations under this Agreement) to perform services for any person or entity other than Microsoft, without the prior written consent of Microsoft. In the event Microsoft provides Limelight with Microsoft equipment for Limelight’s use in the performance of its obligations under this Agreement, Limelight assumes the risk of loss, damage, theft or disappearance for all such Microsoft equipment while in Limelight’s care, custody or control. In addition, Limelight shall take no actions which affect Microsoft’s title or interest in such Microsoft equipment.

     (g) Project Reviews; Personnel. Microsoft and Limelight will meet reasonably frequently, but at least weekly (decreasing to monthly after [*] of this Agreement), to review the project objectives, scope and schedule; update or modify the schedule as needed; and to review the status of performance for meeting the schedule and other requirements set forth in this Agreement. For purposes of clarity, nothing in this section shall be construed as permitting an informal process for amending this Agreement. Amendments to this Agreement may be made only as set forth in Section 21(g). The Parties will create and send a single project report containing risks and issues to identified team members at Microsoft and Limelight. Reasonably soon after the Effective Date, but not later than [*], Limelight shall designate a project program manager who shall be responsible for coordinating this meeting and creating the report referenced in this section. Limelight may modify the designation of the project program manager from time to time. Limelight agrees that it will consider Microsoft feedback regarding any Limelight employee or Subcontractor.

     (h) Financial Information. In the event that Limelight learns that it has become or will become insolvent, then, within [*] after Limelight so learns, Limelight shall submit financial statements to Microsoft in sufficient detail to allow Microsoft to determine whether Limelight shall be capable of continuing to perform its obligations hereunder, if and to the extent such detailed financial statements are available to Limelight.

     (i) Non-Exclusivity; No Other Minimums. The Parties hereto agree that nothing contained in this Agreement shall be construed as (i) creating an exclusive relationship between the Parties or (ii) except as expressly set forth in Section 6(c), requiring Microsoft to obtain any minimum level of services from Limelight.

     (j) Additional Terms and Conditions for Professional Services. All obligations of Limelight under this Agreement to provide services of any kind, whether consulting, advising, recommending, assisting, developing software or requirements, or any other activity of any kind that requires the work of individuals (except sales activities), will be performed by Limelight by providing Professional Services. Such Professional Services are limited to the type and the maximum number of hours for each type of Professional Services as set forth in Exhibit B-2, and are billable to Microsoft as set forth in Section 2(e) and Section 5(a)(1).

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3. LICENSES OF SOFTWARE AND INTELLECTUAL PROPERTY.

     (a) Limelight Software Definition. “Limelight Software” means software that as of the Effective Date is used or required to plan, build, test, deploy, provide, maintain, support, validate, secure, operate or bill any and all of Limelight’s [*] client-installed [*] manager, and dynamic computational services, and including, but not limited to, Limelight’s [*]. Limelight software shall not include the Excluded Software, defined below. “Excluded Software” means (i) any software that Limelight does not have the [*]; (ii) software that is used to deploy, provide, maintain, support, validate, secure, operate or bill Limelight’s content delivery services for Adobe Flash Streaming, Real Networks Real Media on-demand and Streaming; Apple QuickTime or other Apple format on-demand and Streaming; Shoutcast, Icecast, and other MP3 audio on-demand and Streaming formats; and NNTP; (iii) software branded by Limelight as [*]”; and (iv) Limelight’s [*]. With respect to the [*], to the extent that Limelight can readily separate some or all of the software functionality that executes URL redirections for the purpose of dividing services between service delivery infrastructures, then the programs and related documentation (if any) that are readily separable will be included as part of the Limelight Software. In the event that Limelight cannot readily separate some or all of the software functionality that executes URL redirections for the purpose of dividing services between service delivery infrastructures, then Limelight will inform Microsoft how to build software functionality reasonably equivalent to the software functionality that was not readily separable, as set forth in the preceding sentence. A partial list of file names comprising Limelight Software is listed on Exhibit C-1 and a partial list of specifications for Limelight Software is forth in Exhibit C-3. Limelight Software also includes (i), the know-how and trade secrets expressly set forth in Exhibit C-2 (the “Know-How and Trade Secrets”) and (ii) Updates.

     (b) Limelight Software License. Limelight, under all of its Intellectual Property Rights, hereby grants to Microsoft:

     1. a non-exclusive, fully paid up, unlimited (except as set forth in Section 3(c)), worldwide, [*] and irrevocable right and license to install, copy, use, modify and create derivative works of the Limelight Software in [*];

     2. a non-exclusive, fully paid up, unlimited (except as set forth in Section 3(c)), worldwide, [*] and irrevocable right and license to install, copy, use, modify and create derivative works of the Limelight Software in [*];

     3. a non-exclusive, fully paid up, unlimited (except as set forth in Section 3(c)), worldwide, [*] and irrevocable right and license to use the Know-How and Trade Secrets, and

     4. the right to sublicense the rights set forth in this section, in whole or in part, to Microsoft Affiliates and contractors (but only for such contractors’ use in performing their obligations under their agreements with Microsoft or Microsoft Affiliates, as applicable), or as otherwise necessary to achieve the objectives set forth in this Agreement.

     (c) Limelight Software License Exception. The license granted by Limelight in Section 3(b) does not include the right to use Limelight Software [*]. Limelight acknowledges and agrees that as of the Effective Date, none of the services publicly available and offered under [*]. The Limelight Software License is subject to the limitations expressly set forth in Section

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5(a)(3) (Payment of Software License Fee) and Section 17 (d) (Termination/Survival of Limelight Software License).

     (d) Limelight Software Delivery & Acceptance. Promptly after the execution of this Agreement, but not later than [*], Limelight shall deliver the Limelight Software to Microsoft in [*] only (along with an offer to provide a complete machine-readable copy of the corresponding [*] solely for the open source software modules listed in Exhibit C-1), along with a list of all software required to make the Limelight Software fully operational that Limelight does not deliver. The date on which Limelight initially delivers the Limelight Software and list of other software to Microsoft will be the “Limelight Software Delivery Date.” Promptly after the Limelight Software Delivery Date, Microsoft shall commence deploying the Limelight Software in an internal, production test environment for the purpose of having the Limelight Software fully operational in such production test environment (the “Successful Test Deployment”). After (i) the Successful Test Deployment, and (ii) Microsoft’s issuance of the ECN Node Acceptance for the First [*] ECN Node (satisfaction of both being the “Limelight Software Acceptance”), the Limelight Software License Fee shall be due as set forth in Section 5(a)(3), and Limelight will deliver the Limelight Software to Microsoft in [*] and [*]. Microsoft may notify Limelight at any time of any potential defect it identifies in the Limelight Software (each such potential defect being a “Software Error”) by notifying Limelight in writing or by opening a ticket on Limelight’s electronic incident reporting system, providing as much detail as is reasonably possible. Limelight shall respond to Software Error notifications within a reasonable period of time. Software Errors that are not actual software defects, but that reflect the correct operation of the Limelight Software, will not be corrected. Any Software Error reported during the Term that is identified by Limelight as constituting an actual software defect will be corrected by Limelight within a reasonable period of time. If Limelight repeatedly fails to correct Software Errors that preclude either the Successful Test Deployment or the Limelight Software Acceptance, then Microsoft may, at its option: (i) accept and retain the Limelight Software with all rights and obligations as set forth in this Agreement for such Limelight Software by issuing the Limelight Software Acceptance; or (ii) terminate this Agreement for cause pursuant to Section 17, provided, however, that, if Microsoft elects to terminate this Agreement under the circumstances provided for in this section, Microsoft need not provide Limelight the cure period specified in Section 17 and Microsoft will only be responsible for those charges that have accrued as of the termination date. For purposes of clarity, Microsoft’s selection of an option (as set forth in the immediate preceding sentence) for Successful Test Deployment, shall not dictate the option, if any, Microsoft may chose for Limelight Software Acceptance.

     (e) Limelight Software Updates & Documentation. Commencing after the Effective Date, Limelight shall provide Microsoft (i) [*], and (ii) all error corrections, bug fixes, enhancements, revisions or modifications to the Limelight Software, all in [*] and [*], that Limelight makes to the Limelight Software through the Term, and (iii) all error corrections intended to mitigate software defects that directly and adversely affect the core service operation, that Limelight makes in its own deployed instance(s) of the Limelight Software, to the extent that such error corrections are separately identifiable as applicable solely to the Limelight Software, all in [*] and [*], occurring during the Term (subpart (ii) and (iii) are each a “Fix,” and collectively with the Limelight Software [*], the “Updates”). For purposes of clarity, nothing in this Agreement shall be construed as requiring

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Limelight to release Limelight Software [*]. Limelight shall have no obligation to create any error correction or update to any of the Limelight Software after the Term, whether or not Microsoft identifies a software error after that date. Microsoft understands and acknowledges that Limelight may in the future replace some or all modules of the Limelight Software within Limelight’s own operations, and that once Limelight has replaced a module of the Limelight Software with a replacement module, that Limelight will make no further error corrections to, or updates to, the replaced module. Also, in the event that Limelight deploys Limelight Software [*], then Limelight will cease supporting the first version of the Limelight Software a reasonable time after the later of the date that: (i) Limelight delivers Microsoft Limelight Software [*]; and (ii) Limelight fully deploys Limelight Software [*] throughout its own production environment. In no event shall Limelight be required under this Agreement to develop Limelight Software error correction due to a problem that is not attributable to Limelight. Limelight shall provide Microsoft with reasonable access to intermediate check-ins, final-form [*], designs, diagrams, specifications, requirements, test plans, prototypes and development history for the Limelight Software for which Limelight has the right to disclose [*], and will identify all other software used in or relied upon in the Limelight Software which is currently deployed and operated within the Limelight contend delivery network.

     (f) Microsoft Modification of Limelight Software. In the event that Microsoft modifies the Limelight Software, then Microsoft, in its sole discretion, may elect to deliver source and [*] for such modifications to Limelight under the license set forth in this section. For purposes of clarity, nothing in this section shall be construed as requiring Microsoft to deliver or license to Limelight any software, including modifications of the Limelight Software. Subject to the provisions of this Agreement, in the event that Microsoft delivers its modifications of the Limelight Software to Limelight, in either source or [*], then with respect to such delivered software (the “Microsoft Modifications”), Microsoft hereby grants Limelight a perpetual, non-exclusive, non-assignable, nontransferable, worldwide, personal, limited license to use the Microsoft Modifications solely for Limelight’s content delivery network service. In the event that Microsoft licenses Microsoft Modifications to Limelight under this section and Limelight chooses to use such Microsoft Modifications, then, subject to appropriate Limelight business and strategic evaluation, functional evaluation, review, testing and other quality assurance activities, Limelight will use commercially reasonable efforts to evaluate the Microsoft Modifications for deployment in, or in conjunction with, Limelight’s deployment of Limelight Software, provided that, such deployment of Microsoft Modifications does not interfere with, conflict with, negatively affect, or otherwise harm Limelight’s business, operations, financial performance, or industry reputation; and if necessary and if Limelight has elected to deploy the Microsoft Modifications, Limelight will use commercially reasonable efforts to enable Microsoft, at Microsoft’s expense, to deploy additional systems within Limelight’s service delivery infrastructure which can communicate directly with Microsoft Modifications, provided that such systems do not interfere with, conflict with, or otherwise harm Limelight’s business.

     (g) Microsoft Caused Software Errors. In the event that Microsoft reports to Limelight or Limelight otherwise identifies a Software Error (for example, due to degraded performance) and such Software Error is found to have been contained within or caused by Microsoft’s modification of the Limelight Software, then any Tier 3 engineering resources used to identify and resolve or otherwise correct such Software Error shall be chargeable as

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Professional Services as set forth in this Agreement. For purposes of clarity, any Tier 3 engineering resources used to identify and resolve or otherwise correct any other Software Errors, including those caused by Microsoft Modifications that Limelight introduces into the Limelight Software code base will not be chargeable as Professional Services.

4. OTHER SOFTWARE

     (a) Enhanced [*] Manager. Limelight and Microsoft may elect to [*] based on Limelight’s [*]. If the Parties so elect, then the Parties shall establish a written program and agreement, manually signed by each Party, for [*] a specification for the Enhanced [*] Manager, a schedule for [*] Enhanced [*] Manager, a list of persons assigned to perform program management, software development and testing, and including such other details as are reasonably necessary for [*]. All Intellectual Property Rights that are created, developed, written, conceived or first reduced to practice as a result of [*] Enhanced [*] Manager [*] shall be allocated as expressly set forth in the written agreement for such Enhanced [*] Manager [*].

     (b) Other Microsoft Software. If Microsoft provides software, related materials or other items (such as documentation, photographs, music, graphics, multimedia, prototypes, or demos) for Limelight’s use to perform Services, other than Microsoft Modifications (which is governed by Section 3(f)) or the Enhanced [*] Manager (which is governed by Section 4(a)), then Limelight’s use of the software or item shall be governed by the license which is contained in it or accompanies such software or item when delivered to Limelight. If no such license exists, then Microsoft grants Limelight a nonexclusive, nontransferable, non-assignable, limited license to use the software or item, as appropriate, solely for the purpose of creating and performing Services. Such license rights do not include any license, right, power or authority to subject the Microsoft software or item, in whole or in part, to any terms of an Excluded License. Microsoft or its suppliers retain all right, title, and interest in and to the software or item. “Excluded License” means any license requiring, as a condition of use, modification and/or distribution of the software subject to the license, that such software or other software combined and/or distributed with it be (a) disclosed or distributed in [*] (b) licensed for the purpose of making derivative works; or (c) redistributable at no charge.

     (c) Microsoft Products. In the event that Limelight makes proposals for enhancements to, and/or additional functionality for, Microsoft software products which are designed to improve the delivery performance, data accuracy, cost efficiency, and/or revenue productivity/yield of the Limelight content delivery network or the Microsoft edge computing network, then Microsoft shall use good faith efforts to receive and, as appropriate, consider such proposals.

5. LIMELIGHT FEES.

     (a) Fees and Rates. Microsoft shall pay Limelight the fees set forth in Section 5(a)(1-3) (collectively, the “Fees”) in accordance with the terms of this Agreement, including, but not limited to, Sections 5(c)-(e):

     1. Professional Service Fees. For each [*] ECN Node that Microsoft issues a [*] ECN Node Acceptance, Microsoft shall pay Limelight a one-time fee for Professional Services (“Professional Services Fees”) in the amount of:

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i.	[*] UNITED STATES DOLLARS (US$[*] for [*] ECN Nodes [*];
ii.	[*] UNITED STATES DOLLARS (US$[*] for [*] ECN Node number [*];
iii.	[*] UNITED STATES DOLLARS (US$[*] for [*] ECN Nodes number [*];
iv.	[*] UNITED STATES DOLLARS (US$[*] for [*] ECN Nodes number [*];
v.	[*] UNITED STATES DOLLARS (US$[*] for [*] ECN Nodes number [*];

If Microsoft issues ECN Node Acceptances for less than [*] ECN Nodes, then the provisions of Section 2(e) shall apply. The Professional Services Fees for [*] ECN Nodes number [*] and above shall be that amount mutually agreed to by Limelight and Microsoft in writing prior to commencing any Professional Services for such [*] ECN Nodes. Limelight will separately invoice Microsoft for the reasonable and actual expenses it incurs in providing the Professional Services under this agreement, including, but not limited to, travel, lodging and meals, and, provided that Limelight complies with the MVG for such expenses, such invoices will be paid as set forth in Section 5(c)-(e).

     2. Support Services Fees. For each [*] ECN Node that Microsoft issues a [*] ECN Node Acceptance, Microsoft shall pay Limelight a one-time fee for Support Services rendered during the Term (“Support Services Fees”) in the amount of [*] DOLLARS (US$[*] for each [*] ECN Node number [*]. The Support Services Fees for [*] ECN Nodes number [*] and above shall be that amount mutually agreed to by Limelight and Microsoft in writing prior to commencing any Support Services for such [*] ECN Nodes. By way of example, if, during the Term, Microsoft issues [*] ECN Node Acceptances for [*] ECN Nodes, then Limelight would have earned Support Service Fees totaling $[*]; and, on the other hand, if, during the Term, Microsoft issues [*] ECN Node Acceptances for [*] ECN Nodes, then Limelight would have earned Support Service Fees totaling $[*]. For purposes of clarity, Limelight is responsible for any expenses it incurs in providing the Support Services under this agreement, including, but not limited to, travel, lodging and meals.

     3. Software License Fee. After Microsoft issues the Limelight Software Acceptance, Microsoft shall pay Limelight a one-time fee to license the Limelight Software (the “Limelight Software License Fee”) in the amount of [*] UNITED STATES DOLLARS (US$[*] payable in two installments as follows:

i.	[*] UNITED STATES DOLLARS (US$[*] shall accrue on [*] of the [*] ECN Node Acceptance for the First [*] ECN Node; and
ii.	[*] UNITED STATES DOLLARS (US$[*] shall accrue on the date that is [*] after the date of issuance of the [*] ECN Node Acceptance for the First [*] ECN Node.

For purposes of clarity, the Limelight Software License Fee is the entire payment Microsoft will owe Limelight for Limelight Software license fees, including, Limelight Software [*], if any, or any other Update, regardless of how many Updates Limelight

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delivers and/or Microsoft accepts. For purposes of clarity, in the event this Agreement terminates or expires prior to Microsoft’s issuance of the Limelight Software Acceptance, then Microsoft will have no obligation to pay the Limelight Software License Fee and the Limelight Software License shall expire as of the date of termination or expiration, as applicable, of this Agreement.

     (b) Advance Against Service Fee. As of the Effective Date, Microsoft shall pay Limelight a refundable advance of [*] UNITED STATES DOLLARS (US$[*] (the “Advance”). Limelight shall invoice Microsoft for the Advance, and such invoice will be paid as set forth in Section 5(c)-(e). Microsoft may offset the Advance against the Professional Service Fees by offsetting $[*] against each of the two payments of $[*] due upon Microsoft’s acceptance of [*] ECN Nodes numbers [*]. In the event that by the earlier of [*] and the termination date of this Agreement, Limelight Professional Service Fees billings have not been sufficient to offset the entire amount of the Advance, then Limelight shall promptly (but not later than [*]) pay Microsoft the amount of the non-offset portion of the Advance upon written notice by Microsoft.

     (c) Payment Terms. Limelight shall invoice Microsoft for Professional Services Fees, Support Services Fees and Limelight Software License Fee as each accrues under this Agreement. Limelight shall invoice Microsoft for all other Fees incurred for Services during a month on or after the [*] of the month following the month in which the Services were provided. Upon receipt of a correct and undisputed invoice, Microsoft shall pay the invoice net [*] from the date of the invoice. Payments shall be made according to Microsoft’s then-current payment policies, which include payment via ACH electronic payment to Limelight’s financial institution under instructions supplied by Limelight in Microsoft’s ACH Electronic Payment form.

     (d) MS Invoice. Limelight shall invoice Microsoft for all amounts via the MS Invoice online tool in accordance with the then-current requirements at http://invoice.microsoft.com. All invoices shall be submitted with line-item detail identifying all aspects of the Service provided to Microsoft. Invoices shall not bear an invoice date earlier than the date on which Limelight shall be entitled to be paid under this Agreement, or if not specified, invoices may be issued monthly in arrears.

     (e) Disputed Amounts. Microsoft may dispute any invoice by providing written notice to Limelight within [*] of receiving the invoice (each a “Disputed Amount”). All Disputed Amounts that Microsoft agrees in writing to pay, or that are required to be paid pursuant to a final court order or arbitration award (along with any other amounts legally required, e.g., by statute or under this Agreement), shall be paid on the payment terms in Section 5(c)-(d). Payment of an invoice without asserting a dispute is not a waiver of any claim or right. Failure to dispute an invoiced amount within the [*] period shall not be deemed a waiver of any claim unknown to Microsoft at the time.

6. LIMELIGHT CONTENT DELIVERY SERVICE AGREEMENT AMENDMENTS. The Parties amend the Limelight Content Delivery Service Agreement, as more fully set forth in this section.

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     (a) Service Fee. All pricing is as set forth in the Limelight Content Delivery Service Agreement.

     (b) Contract Pricing Adjustment. Limelight and Microsoft agree that they will meet to discuss adjusting the prices recited in the Limelight Content Delivery Service Agreement [*] (and such other additional times as the Parties agree) to reflect any change in market prices for CDN services of the amount and type contained herein. The Parties acknowledge that any changes in pricing will have an inverse effect on the balance of the Traffic Commitment; that is, an increase in pricing will result in a decrease in the balance of the Traffic Commitment, and a decrease in pricing will result in an increase in the balance of the Traffic Commitment. Such adjustment to pricing and the balance of the Traffic Commitment shall be made via a written amendment to the Limelight Content Delivery Service Agreement (for adjustments to pricing) and this agreement (for adjustments to the Traffic Commitment) and shall be effective as of [*], unless such written amendment is agreed [*] of that year, in which case such change shall be effective as of the first day of the calendar quarter in which such written amendment is actually reached. If Limelight and Microsoft are not able to agree as to the terms of an amendment to adjust the prices recited in the Limelight Content Delivery Service Agreement and the balance of the Traffic Commitment, then the prices contained in the Limelight Content Delivery Service Agreement and the balance of the Traffic Commitment will remain in effect until such time as the Parties are able to reach an agreement. If Limelight and Microsoft agree that no change in the prices recited in the Limelight Content Delivery Service Agreement is warranted, then no amendment to this agreement need be executed.

     (c) Traffic Commitment. During the time period commencing on [*] and ending [*] from the Effective Date, and subject to terms, conditions and limitations set forth in this Agreement, Microsoft shall meet the Traffic Commitment, defined below.

     1. Definition. “Traffic Commitment” means total usage of CDN Services, where Services are as defined in and used under the Limelight Content Delivery Service Agreement for all Microsoft properties and/or online services in all markets worldwide representing the sum of the billable traffic rate calculated for each month (except for Excluded Service Traffic, defined below) and equal to [*] Mbps-months over the time period starting [*] (the “Traffic Commitment Start Date”), and ending [*] from the Effective Date (the “Traffic Commitment End Date”), subject to any adjustments as set forth in this Agreement. “Excluded Service Traffic” means (i) the traffic in Mbps for [*] for any Service, as defined under the Limelight Content Delivery Service Agreement (the “[*] Traffic”) plus the traffic for [*] Interactive News, LLC for any Service, as defined under the Limelight Content Delivery Service Agreement (the “[*] Traffic”) up to a maximum of [*] Mbps, and (ii) the traffic for any acquisition by Microsoft of an existing Limelight customer up to a maximum of the average traffic over the last six (6) months prior to such acquisition for those specific services such customer was using immediately prior to such acquisition, provided that Limelight promptly notifies Microsoft in writing that such acquisition was an existing Limelight customer. For example, if in a given month the [*] Traffic equals [*] Mbps for small object/file caching and the [*] Traffic equals [*] Mbps for small object/file caching, then the amount of Excluded Service Traffic equals [*] Mbps-months of Excluded Traffic for that month. For further example, if, in a given month the [*] Traffic equals [*] Mbps for small object/file caching and the [*] Traffic equals [*] for small object/file caching, then the amount of Excluded Service

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Traffic equals the Actual [*] Traffic of [*] the Actual [*] Traffic of [*] Mbps-months of Excluded Traffic for that month. For clarity as to how to calculate Mbps-months for Services under this Agreement, if Limelight bills Microsoft for [*] Mbps for Services (in all cases, excluding Excluded Service Traffic) in [*], then that month will represent [*] Mbps-months of performance against the Traffic Commitment; if Limelight then bills Microsoft for [*] Mbps for Services in [*] then that month will represent [*] Mbps-months of performance against the Traffic Commitment and [*] will represent [*] of performance against the [*]; and if Limelight then bills Microsoft [*] Mbps for Services in [*], then that month will represent [*] Mbps-months of performance against the Traffic Commitment and the [*] will represent [*] Mbps-months in total performance against the Traffic Commitment.

     2. Adjustments to Traffic Commitment.

     i. Reduction. In the event that this Agreement terminates early such that the Term is less than [*], then the Traffic Commitment shall be reduced pro rata based on the actual time period of the Term of this Agreement as compared to [*] (for example, if the Term is [*], then the Traffic Commitment shall be reduced by [*], or [*]). In the event that Limelight fails to meet the service level agreement for any Service under the Limelight Content Delivery Service Agreement in any calendar month for a particular Microsoft property, then the Traffic Commitment shall be reduced by an amount equal to (i) the traffic for such Microsoft property in the month immediately preceding the calendar month Limelight failed to meet such service level agreement, multiplied by (ii) three (3).

     ii. GB Pricing Conversion. For purposes of satisfying the Traffic Commitment (which, of course, is measured in Mbps), the amount of Mbps that applies to the Traffic Commitment for all traffic which Microsoft pays under a per Gigabyte (GB) billing model, but not including storage services paid for under a per Gigabyte (GB) billing model, shall be determined using the following formula: [*] for traffic under the [*] divided by the corresponding then current standard [*]” is the volume of traffic to be applied to the [*] for that month. Storage services paid for under a per Gigabyte (GB) billing model do not count towards the Traffic Commitment.

     3. Reporting. Each month after the Traffic Commitment Start Date, by the [*] of the month, Limelight shall report (the “Traffic Commitment Report”) to Microsoft (i) the amount of Traffic Commitment Microsoft attained for the month, (ii) the total amount of the Traffic Commitment Microsoft has attained, and (iii) the amount of the Traffic Commitment remaining. If Microsoft disputes any aspect of the Traffic Commitment Report, then Microsoft shall notify Limelight of such dispute, and the Parties shall in good faith work to mutually agree on the correct figures for the Traffic Commitment Report.

     4. Failure to Attain. If, by the Traffic Commitment End Date, Microsoft has not met the Traffic Commitment, then, subject to all terms, conditions and limitations in

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this Agreement, Microsoft shall pay Limelight an amount equal to (i) that amount of the Traffic Commitment not attained as measured in Mbps multiplied by (ii) the weighted average price per Mbps (that is, total invoiced amount in US dollars, or if in another currency, converted into US dollars, divided by the total traffic in Mbps) using the actual traffic volume and invoiced amounts for traffic applicable to the Traffic Commitment [*] to the Traffic Commitment End Date (the “Traffic Commitment Payment”). Microsoft will pay the Traffic Commitment Payment under the terms of Section 5(c)-(e), subject to Limelight’s submission of an invoice, as set forth in Section 5(d).

     5. Technical Support Director. To assist Microsoft with meeting its obligations under this section, Limelight shall provide a Senior Technical Support Director, or (at Limelight’s discretion) a more senior person (the “Limelight Technical Support Director”), within [*] of the Effective Date, to assist Microsoft, at Microsoft’s discretion, with facilitating the on-boarding of Services, as defined under the Limelight Content Delivery Service Agreement, to Microsoft properties and assist Microsoft with interacting with Limelight. Each month the Limelight Technical Support Director shall send a report to Microsoft and the Limelight Senior Vice President of Business Development (or such other person(s) as Limelight shall deem appropriate) outlining in reasonable detail the significant aspects of the Parties’ relationship, including, but not limited to, new properties added, properties removed, traffic usage and patterns, SLA concerns, and root case analysis for any problems that arose from the previous month’s service. At Microsoft’s discretion, the Limelight Technical Support Director may reside in an office on the Microsoft campus facility (but, for purposes of clarity, Microsoft is under no obligation to provide the Limelight Technical Support Director an office or other facilities), and if so, then Limelight and the Limelight Technical Support Director shall comply with all obligations related to using such Microsoft office or other facilities, as set forth in this Agreement, the MVG or any other Microsoft policy made available to Limelight.

     6. Payment for Services under the Limelight Content Delivery Service Agreement. All payment for Services (as defined under the Limelight Content Delivery Service Agreement) shall be as set forth in the Limelight Content Delivery Service Agreement.

7. PATENT LICENSE

     (a) By Microsoft.

     1. Microsoft hereby grants to Limelight a personal, nonexclusive, nontransferable, nonsublicensable license under the Licensed Patents in the jurisdictions in which any of the Licensed Patents has issued to make and use the inventions claimed in the Licensed Patents, as limited by the exclusion set forth in Section 7(a)(2) below. “Licensed Patents” means the following patents: [*]. All rights not expressly granted in this section are reserved. No additional rights whatsoever (including, without limitation, any implied licenses) are granted by implication, estoppel or otherwise. Without limiting the generality of the foregoing, the license in this section does not include, and Microsoft does not grant, any right under any patent or intellectual property other than the Licensed Patents. Further, Microsoft reserves any and all rights to, and shall not have any

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obligation to, apply for, register, prosecute, perfect, maintain, enforce or take any other action with respect to any Microsoft intellectual property rights, including, but not limited to, the Licensed Patents. Microsoft may terminate the patent license in this section by giving Limelight written notice of termination in the event that: (a) the Agreement is terminated due to Limelight’s breach as set forth in Section 17(b) or 17(c); (b) Limelight or any of its affiliates commences, directs or controls any legal action seeking to render any of the Licensed Patents or any claim under any of the Licensed Patents invalid or unenforceable; (c) Limelight or any of its affiliates brings any proceeding of any kind against Microsoft or any of its affiliates for infringement of any patent relating to any functionality described in the Licensed Patents on account of any making, use, sale, offering, importing, disposition or promotion of any Microsoft product, technology or service; or (d) this Agreement expires and after such expiration there is a Limelight Change of Control involving a competitor of Microsoft, or Limelight sells a material portion of its assets relating to the subject matter of this Agreement to a competitor of Microsoft.

     2. Patent License Exclusion. The patent license granted by Microsoft in Section 7(a)(1) does not include the right to make or use the inventions claimed in the License Patents for the sale, license or other distribution of [*] including, but not limited to, [*] excluding [*] such as [*].

     (b) By Limelight.

     1. Limelight hereby grants to Microsoft a personal, nonexclusive, nontransferable, nonsublicensable license under the Licensed Pending Patents in the jurisdictions in which any of the Licensed Pending Patents has issued to make and use the inventions claimed in the Licensed Pending Patents, as limited by the exclusion set forth in Section 7(b)(2). “Licensed Pending Patents” means the patents that issue under any of the following patent applications, including continuations: [*]. All rights not expressly granted in this section are reserved. No additional rights whatsoever (including, without limitation, any implied licenses) are granted by implication, estoppel or otherwise. Without limiting the generality of the foregoing, the license in this section does not include, and Limelight does not grant, any right under any patent or intellectual property other than the Licensed Pending Patents. Further, Limelight reserves any and all rights to, and shall not have any obligation to, apply for, register, prosecute, perfect, maintain, enforce or take any other action with respect to any Limelight intellectual property rights, including, but not limited to, the Licensed Pending Patents. Limelight may terminate the patent license in this section by giving Microsoft written notice of termination in the event that: (a) the Agreement is terminated due to Microsoft’s breach as set forth in Section 17(b); (b) Microsoft or any of its affiliates commences, directs or controls any legal action seeking to render any of the Licensed Pending Patents or any claim under any of the Licensed Pending Patents invalid or unenforceable; or (c) Microsoft or any of its affiliates brings any proceeding of any kind against Limelight or any of its affiliates for infringement of any patent relating to any functionality described in the Licensed Pending Patents on account of any making, use, sale, offering, importing, disposition or promotion of any Limelight product, technology or service.

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     2. Patent License Exclusion. The patent license granted by Limelight in Section 7(b)(1) does not include the right to make or use the inventions claimed in the License Pending Patents to offer for sale [*]. Limelight acknowledges and agrees that as of the Effective Date, none of the services publicly available and offered under [*].

8. PEERING.

     (a) Exchange of Traffic. Microsoft and Limelight may exchange TCP/IP data traffic over their respective networks, i.e., Limelight would route its traffic through the [*] ECN Node, and Microsoft would route its traffic (except for traffic under the Limelight Content Delivery Service Agreement) through the Limelight content delivery network. If the Parties so elect to exchange data traffic, then the Parties will set forth in writing the interconnection points for such data traffic exchange (the “Interconnection Points”), and each Party shall provide, at its own expense, connections from its network to the Interconnection Point. Neither Party shall monitor, filter or otherwise restrict the contents of the other Party’s data or traffic as it passes through the Interconnection Points except (i) pursuant to an appropriate confidentiality agreement as necessary for network service or network security, including without limitation to respond to spamming or denial of service attacks, so long as a Party is in compliance with applicable law; (ii) pursuant to the Parties’ respective Acceptable Use Policies; or (iii) in compliance with applicable law or an applicable court order or subpoena. Either Party may monitor control traffic or TCP/IP header and protocol information necessary solely for the operation, problem resolutions and engineering of the Party’s network. The Parties may share this information with each other for such purposes. In no event shall the monitoring Party disclose such information to third parties, except (i) pursuant to an appropriate confidentiality agreement as necessary for network service or network security, including without limitation to respond to spamming or denial of service attacks; or (ii) in compliance with applicable law or an applicable court order or subpoena. Neither Party shall provide to third parties any samples or statistical information derived from the data traffic that passes through the Interconnection Points except (i) pursuant to an appropriate confidentiality agreement as necessary for network service or network security, including without limitation to respond to spamming or denial of service attacks; or (ii) in compliance with applicable law or an applicable court order or subpoena, provided that either Party may collect statistical information derived from the data traffic solely for the purposes of operation, problem resolution and engineering of that Party’s network.

     (b) Technical and Operational Matters. If Microsoft and Limelight elect to exchange traffic as set forth in Section 8(a), then the Parties shall work together to establish mutually acceptable performance objectives and operational procedures to enable each Party to provide a high quality service over its network and the Interconnection Points in a cost effective manner.

     (c) Pricing. If Microsoft and Limelight elect to exchange traffic as set forth in Section 8(a), then the Parties shall establish in writing the charge for Peer Route Utilization, defined below (provided that, the maximum charge shall be mutually agreed to at the time the exchange of traffic is developed and as modified by the Parties from time to time, using the Burstable Billing calculation method set forth in the Limelight Content Delivery Service Agreement. “Peer Route Utilization” means the amount of traffic delivered for Microsoft on the Limelight content delivery network using Limelight’s settlement-free routes (except for traffic

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under the Limelight Content Delivery Service Agreement), and similarly, the amount of traffic delivered for Limelight on the [*] ECN Node using Microsoft’s settlement-free routes, provided that (i) the Mbps delivered by the [*] ECN Node will be calculated by measuring the Mbps delivered at each [*] ECN Node location using the Burstable Billing method (as set forth in the Limelight Content Delivery Service Agreement), and then summing the measurements of each location to arrive at a [*] ECN Node total Mbps delivered, (ii) the Mbps delivered on peer routes will be similarly measured at each Limelight content delivery network and [*] ECN Node location, and (iii) the measurement will occur in aggregate across all Microsoft properties. If Microsoft pays Limelight under this section, then such payment shall be paid as set forth in Section 5(c)-(e), subject to Limelight’s submission of an invoice, as set forth in Section 5(d). If Limelight pays Microsoft under this section, then Microsoft shall issue Limelight an invoice for such amount and Limelight shall pay Microsoft the invoiced amount within [*] or, at Microsoft’s discretion, Microsoft may offset any amounts Limelight owes Microsoft under this section against any amounts Microsoft owes to Limelight.

     (d) Peering Reports. Limelight shall provide Microsoft (i) a monthly report detailed for each Microsoft property displaying traffic, co-lo, network usage, rack, power, and peering over the Limelight Network, and (ii) a monthly report for Limelight traffic, co-lo, network usage, rack, power, and peering over the [*] ECN Node network. Limelight will reconcile these two reports and provide a document showing the Peer Route Utilization for that month provided for both the [*] ECN Nodes and the Limelight Network.

9. SUBCONTRACTING OF WORK. Limelight shall not subcontract all or any portion of the Services to third parties (each, a “Subcontractor”) without the express prior written consent of Microsoft, which consent shall not be unreasonably withheld. In the event Microsoft approves the use of a Subcontractor, Limelight agrees to do so in compliance with the MVG and the following conditions:

     (a) Limelight guarantees its Subcontractor’s fulfillment of the applicable obligations imposed on Limelight by this Agreement.

     (b) Limelight shall indemnify Microsoft for all damages and/or costs of any kind, to the extent set forth in Section 14 herein, incurred by Microsoft or any third party and caused by Subcontractor’s fulfillment of the applicable obligations imposed on Limelight by this Agreement.

     (c) Limelight agrees to make all payments to the Subcontractor for Services performed for which Subcontractor was hired. If Limelight fails to pay a Subcontractor for Services performed and there is no existing bona fide dispute between Limelight and the Subcontractor related to such unpaid amount, then after Microsoft provides [*] advance written notice to Limelight, Microsoft shall have the right, but not the obligation, to pay such Subcontractor for such Services. Microsoft shall then have the right to offset any amounts due and owing to Limelight with the amounts paid to such Subcontractor. Limelight shall indemnify Microsoft for all damages and/or costs of any kind, without limitation, incurred by Microsoft caused by a failure of Limelight to pay a Subcontractor for Services performed. Limelight agrees that subcontractor billing shall not include any mark up of fees charged Limelight by subcontractor.

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10. CONFIDENTIALITY.

     (a) Scope. The Parties acknowledge and agree that the terms of the Microsoft Corporation Non-Disclosure Agreement dated August 10th 2004 (the “NDA”) will be deemed incorporated herein, that their obligations of confidentiality shall be governed by the NDA, and further, that the existence of this Agreement, the terms and conditions of this Agreement, and all such related information are hereby specifically designated as Confidential Information under the NDA.

     (b) All aspects of the [*] ECN Nodes, the existence of the [*] ECN Nodes, and all such related information are hereby specifically designated as Confidential Information of Microsoft under the NDA. Microsoft and Limelight shall collaborate to ensure that sufficient controls are in place to ensure that each Party, as it performs under this Agreement, complies with its separate nondisclosure obligations.

     (c) The Know-How and Trade Secrets that Limelight discloses to Microsoft in the performance of this Agreement are specifically designated as Confidential Information of Limelight under the NDA, and Microsoft shall not use the Know-How and Trade Secrets except as set forth in Section 3.

     (d) Notwithstanding the confidential nature of this Agreement, Microsoft and Limelight agree to publicize the general purposes of this Agreement as set forth in Section 21(i).

11. PROPRIETARY RIGHTS; TECHNOLOGY COOPERATION.

     (a) This section applies to all aspects of the [*] ECN Nodes, except for the Limelight Software. Microsoft’s rights to the Limelight Software are set forth in Section 3. Except for the Intellectual Property Rights subject to the license from Limelight to Microsoft in this Agreement, as between Microsoft and Limelight, Microsoft owns all right, title and interest in each [*] ECN Node, including all Intellectual Property Rights embodied in or associated with any [*] ECN Node. Except as expressly stated in this Agreement, the Parties will have no rights of any kind in or to any of each other’s Intellectual Property Rights. There are no implied licenses under this Agreement, and any rights not expressly granted under this Agreement are reserved by the respective Party.

     (b) Except for Know-How and Trade Secrets, neither Party is prohibited or enjoined at any time from utilizing any skills or knowledge of a general nature created by it during the course of providing the Services, including, without limitation, information publicly known or available or that could reasonably be through other means than through exposure to the work of the other Party.

     (c) Nothing in this Agreement will be construed as restricting Microsoft’s ability to acquire, license, develop, manufacture or distribute for itself, or have others acquire, license, develop, manufacture or distribute for Microsoft, similar technology performing the same or similar functions as the technology contemplated by this Agreement, or to market and distribute such similar technology in addition to or, subject to the terms and conditions of this Agreement, in lieu of the technology contemplated by this Agreement.

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     (d) Technology Cooperation Agreement: During the Term of this Agreement, Limelight and Microsoft will: i) work together where possible [*] work together to improve the effectiveness of their CDN services, including, but not limited to, performance, measurement, and functionality; and iii) publicize the relationship established by this Agreement as set forth in Section 21(i).

12. PRIVACY AND DATA PROTECTION.

     (a) For the purposes of this section, “Personal Information” means any information (i) that identifies or can be used to identify, contact, or locate the person to whom such information pertains, or (ii) from which identification or contact information of an individual person can be derived. Personal Information includes, but is not limited to: name, address, phone number, fax number, email address, social security number or other government-issued identifier, and credit card information. Additionally, to the extent any other information (such as, but not necessarily limited to, a personal profile, unique identifier, biometric information, and/or IP address) is associated or combined with Personal Information, then such information also will be considered Personal Information.

     (b) Any Personal Information collected or accessed by Limelight in performing the Services shall be limited to that which is strictly necessary to perform such Service or to fulfill any legal requirements. If the Service involves the collection of personal information directly from individuals, such as through a webpage, Limelight shall provide a clear and conspicuous notice regarding the uses of the personal information. Such notice shall comply with all relevant guidelines contained in the MVG or as otherwise provided by Microsoft.

     (c) Limelight shall use Personal Information only as necessary to perform Services in accordance with this Agreement and not for any other purpose whatsoever. Limelight shall maintain Personal Information in strict confidence in accordance with the provisions of the NDA. Limelight shall not share any Personal Information that is collected or possessed by Limelight with any third parties for any reason except as necessary to carry out the Services, and only under terms and conditions substantially similar to those contained in this section. If Limelight is served with a court order compelling disclosure of any Personal Information or with notice of proceedings for such an order, Limelight shall oppose the order, notify Microsoft of such order or notice, and provide Microsoft the opportunity to intervene before Limelight files any response to the order or notice.

     (d) Limelight shall take reasonable steps to protect Personal Information in Limelight’s possession from unauthorized use, access, disclosure, alteration or destruction. Security measures shall include access controls, encryption or other means, where appropriate. Limelight must immediately notify Microsoft of any known security breach that may result in the unauthorized use, access, disclosure, alteration or destruction of Personal Information. Limelight agrees to conduct an audit on at least an annual basis to evaluate the security of Personal Information in Limelight’s possession and to verify that the terms of this Agreement with respect to Personal Information are being followed. The results of such audit shall be made available to Microsoft on request.

     (e) Upon request from Microsoft, Limelight shall provide Microsoft with any or all Personal Information in Limelight’s possession. Upon termination or expiration of this

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Agreement, Limelight shall within [*] thereafter, at Microsoft’s sole discretion, either (i) provide Microsoft with all documents and materials (including any and all copies) containing Personal Information, together with all other materials and property of Microsoft, which are in its possession or under its control, or (ii) destroy all such specified documents and materials (including any and all copies in any and all formats) and provide Microsoft with a certificate of destruction signed by an officer of Limelight.

13. WARRANTIES AND REPRESENTATIONS; LIABILITY LIMITATION.

     (a) By Limelight. Limelight represents and warrants to Microsoft as follows:

     1. Limelight is duly incorporated, organized and validly existing and in good standing under the laws of the state of Delaware, has all requisite rights, powers, authority, licenses and permits and has undertaken all actions and has fulfilled all conditions to enter into, to perform under and to comply with its obligations under this Agreement including, but not limited to, to grant any rights and licenses as set forth herein;

     2. Limelight’s representative whose signature is affixed to this Agreement has full capacity and authority to bind it to the terms hereof;

     3. Limelight is not presently under, nor will it enter into in the future, any agreement, commitment, understanding or other obligation, whether written or oral, which is inconsistent or in conflict with this Agreement or would in any way or to any extent prevent, limit or otherwise impair its performance of any of its obligations hereunder or in connection herewith;

     4. Except for the litigation between Akamai Technologies, Inc. and the Massachusetts Institute of Technology and Limelight pending in US District Court in Massachusetts, and (to the extent applicable) the letter from Level 3 Communications, LLC to Limelight dated February 9, 2007, there is presently no suit, action, proceeding or other claim pending or threatened, against it, or, to the best of its knowledge, any third party, nor does any fact exist which may be the basis of any such action, suit, proceeding or other claim, with respect to this Agreement or which could have a material adverse effect on Limelight’s capacity to perform under this Agreement;

     5. In the performance of this Agreement, Limelight shall comply with all applicable laws, regulations, rules, orders and other requirements of governmental authorities having jurisdiction over the Parties;

     6. Limelight and its Subcontractors shall at all times, while on Microsoft property or while performing the Services, comply with all applicable, local, state, federal, and foreign laws and the terms of the MVG;

     7. The Services shall either be originally created by Limelight or Limelight will obtain all necessary rights to the Services to transfer ownership to Microsoft as required under this Agreement;

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     8. The Services, Limelight Software, and the [*] ECN Node, including all portions performed by any Subcontractor, will strictly comply with the terms and conditions of this Agreement; and

     9. The Services, Limelight Software, the [*] ECN Node, and the use thereof by Microsoft, Microsoft’s subsidiaries, affiliate companies, joint ventures, third-party agents, and permitted sublicensees will not infringe or violate any Intellectual Property Rights or other proprietary right of any third party;

     10. Limelight has not and will not take any actions that (i) create, or purport to create, any obligation on behalf of Microsoft, or (ii) grant, or purport to grant, any rights or immunities to any third party under Microsoft’s Intellectual Property Rights. By way of example but not limitation of the foregoing, Limelight shall not incorporate any Publicly Available Software in whole or in part into any part of the Services, Limelight Software or any [*] ECN Node, or use Publicly Available Software in whole or in part in the development of any part of the Services in a manner that may subject the Services, Limelight Software or any [*] ECN Node, in whole or in part, to all or part of the license obligations of any Publicly Available Software. Microsoft acknowledges that Limelight has disclosed that certain software systems that it uses in the operation of its content delivery infrastructure are based on Publicly Available Software as set forth in Exhibit C-1.

Except as otherwise provided in this Agreement, Limelight expressly disclaims, all other representation, warranties or conditions, whether express, implied, statutory or otherwise, including, without limitation, the implied warranties of merchantability, title, and fitness for a particular purpose. For purposes of clarity, Limelight Software is licensed “as is” and Limelight makes no warranty, express or implied, including the implied warranty of fitness for a particular purpose, for any Limelight Software. Limelight does not warrant uninterrupted or error-free operation of any Limelight Software.

     (b) By Microsoft. Microsoft represents and warrants to Limelight that:

     1. Microsoft is duly incorporated, organized and validly existing and in good standing under the laws of the state of Washington, has all requisite rights, powers, authority, licenses and permits and has undertaken all actions and has fulfilled all conditions to enter into, to perform under and to comply with its obligations under this Agreement including, but not limited to, to grant any rights and licenses as set forth herein;

     2. Microsoft’s representative whose signature is affixed to this Agreement has full capacity and authority to bind it to the terms hereof;

     3. Microsoft is not presently under, nor will it enter into in the future, any agreement, commitment, understanding or other obligation, whether written or oral, which is inconsistent or in conflict with this Agreement or would in any way or to any extent prevent, limit or otherwise impair its performance of any of its obligations hereunder or in connection herewith; and

     4. there is presently no suit, action, proceeding or other claim pending or threatened, against it, or, to the best of its knowledge, any third party, nor does any fact

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exist which may be the basis of any such action, suit, proceeding or other claim, with respect to this Agreement or which could have a material adverse effect on Microsoft’s capacity to perform under this Agreement.

Except as otherwise provided in this Agreement, Microsoft expressly disclaims all other representations, warranties or conditions, whether express, implied, statutory or otherwise, including, without limitation, the implied warranties of merchantability, title, and fitness for a particular purpose. For purposes of clarity, any Microsoft Modifications provided are “as is,” “with all faults,” and without warranty guarantees or conditions of any kind.

     (c) Consequential Damages. EXCEPT FOR OBLIGATIONS UNDER SECTION 14 OR A BREACH OF SECTION 10 IN NO EVENT WILL EITHER PARTY BE LIABLE OR RESPONSIBLE TO THE OTHER FOR ANY SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT, EXEMPLARY, OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOST REVENUE OR LOST PROFITS, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER ARISING UNDER THEORY OF CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE.

14. GENERAL INDEMNIFICATION.

     (a) By Limelight.

          (1) Limelight agrees to defend, hold harmless, and indemnify Microsoft and its subsidiaries, affiliates, directors, officers, employees, and agents (“Microsoft Indemnified Parties”), from and against all claims, damages, losses, suits, actions, demands, proceedings, expenses, and liabilities of any kind, (including reasonable attorneys’ fees incurred and/or those necessary to successfully establish the right to indemnification) threatened, asserted or filed (collectively, “Microsoft Claims”) against any Microsoft Indemnified Party, to the extent that such Microsoft Claims arise out of or relate to (i) bodily injury or death to any person arising out of or related to the Services, the Limelight Software or the [*] ECN Node, (ii) loss, disappearance, or damage to property arising out of or related to the Services, the Limelight Software or the [*] ECN Node, (iii) taking the claimant’s allegations to be true, would result in a breach by Limelight of any covenant, warranty or representation made by Limelight in this Agreement, and/or (iv) infringement, violation or misappropriation of any Intellectual Property Right or other proprietary right of any third party by, or arising out of or related to, the Services, the Limelight Software, or the [*] ECN Node.

          (2) If any action is brought against any Microsoft Indemnified Party in which indemnity is sought from Limelight, Microsoft shall (i) provide Limelight reasonably prompt notice of any such Microsoft Claim; (ii), except for Patent Claims, defined below, permit Limelight, through counsel mutually acceptable to Microsoft and Limelight, to answer and defend such Microsoft Claim; and (iii) provide Limelight information and reasonable assistance at Limelight’s expense to help Limelight defend such Microsoft Claim.

          (3) Microsoft shall have the right to employ separate counsel and participate in the defense of any Microsoft Claim at its own expense. Limelight shall

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reimburse Microsoft for any payments made or losses suffered based upon the judgment of any court of competent jurisdiction or pursuant to a bona fide compromise or settlement of Microsoft Claims. Limelight shall not settle any Microsoft Claim on Microsoft’s behalf without first obtaining Microsoft’s written permission.

          (4) Patent Indemnity. In the event a Microsoft Indemnified Party seeks indemnification for Microsoft Claims caused by the alleged infringement of patent rights of any third party ( “Patent Claims”), then the responsibility for the Patent Claim shall be as follows: (i) [*] shall be solely responsible for the monetary amount of Patent Claims from US$[*] to US$[*]; (ii) Microsoft and Limelight shall each be responsible for [*] of the monetary amount of Patent Claims from US$[*] to US$[*], and (iii) Microsoft shall be solely responsible for the monetary amount of Patent Claims over US$[*]. Microsoft shall be responsible for selecting counsel for defending any Patent Claims. Limelight shall have the right to employ separate counsel and participate in the defense of any Patent Claims at its own expense. [*].

     (b) By Microsoft.

          (1) Microsoft agrees to defend, hold harmless, and indemnify Limelight and its subsidiaries, affiliates, directors, officers, employees, and agents (“Limelight Indemnified Parties”), from and against all claims, damages, losses, suits, actions, demands, proceedings, expenses, and liabilities of any kind, (including reasonable attorneys’ fees incurred and/or those necessary to successfully establish the right to indemnification) threatened, asserted or filed (collectively, “Limelight Claims”) against any Limelight Indemnified Party, to the extent that such Limelight Claims, taking the allegations contained therein to be true, would result in a breach by Microsoft of any covenant, warranty or representation made by Microsoft in this Agreement.

          (2) If any action is brought against any Limelight Indemnified Party in which indemnity is sought from Microsoft, Limelight shall (i) provide Microsoft reasonably prompt notice of any such Limelight Claim; (ii) permit Microsoft, through counsel mutually acceptable to Microsoft and Limelight, to answer and defend such Limelight Claim; and (iii) provide Microsoft information and reasonable assistance at Microsoft’s expense to help Microsoft defend such Claim.

          (3) Limelight shall have the right to employ separate counsel and participate in the defense of any Limelight Claim at its own expense. Microsoft shall reimburse Limelight for any payments made or losses suffered based upon the judgment of any court of competent jurisdiction or pursuant to a bona fide compromise or settlement of Limelight Claims. Microsoft shall not settle any Limelight Claim on Limelight’s behalf without first obtaining Limelight’s written permission.

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     (c) Should the Services, the Limelight Software or the [*] ECN Node (or any portion thereof) be held to constitute an infringement, Limelight shall notify Microsoft and immediately, at Limelight’s expense: (i) procure for Microsoft the right to continued use of the Services, the Limelight Software or the [*] ECN Node (or any portion thereof as applicable) or (ii) replace or modify the Services, the Limelight Software or the [*] ECN Node (or any portion thereof as applicable) such that it is non-infringing, provided that the replacement or modification meets the requirements of this Agreement to Microsoft’s satisfaction.

     (d) The indemnification set forth in this Section 14 applies to the specific scope set forth in this Agreement. The Parties have agreed to [*]. For purposes of clarity, no Party shall receive indemnification for the same loss under both this Agreement and the [*].

15. INSURANCE. Limelight shall keep in full force and effect during the term of this Agreement: (i) comprehensive general liability insurance in an amount not less than $2 million per occurrence for bodily injury and property damage; and (ii) workers’ compensation insurance in an amount not less than that required by applicable law. Limelight shall ensure that its contractors and subcontractors obtain and maintain the same types and amount of coverages as required of Limelight herein. On Microsoft request, Limelight will deliver to Microsoft, certificates of insurance which evidence the minimum levels of insurance set forth in this section.

16. TAXES. Microsoft is not liable for any taxes that Limelight is legally obligated to pay and which are incurred or arise in connection with the sale of Services, the Limelight Software license or any other payment to Limelight under this Agreement. All taxes (including but not limited to net income or gross receipts taxes, franchise taxes, and property taxes) shall be Limelight’s financial responsibility. Microsoft may provide Limelight with a valid exemption certificate, and Limelight shall not collect taxes covered by the certificate. Limelight shall indemnify, defend and hold Microsoft harmless from any taxes (including sales or use taxes paid by Microsoft) or claims, causes of action, costs (including without limitation, reasonable attorneys’ fees) and any other liabilities of any nature whatsoever related to taxes. Notwithstanding the foregoing, Microsoft shall pay Limelight any sales or use taxes owed by Microsoft solely as a result of entering into and performing this Agreement and which are required to be collected from Microsoft by Limelight under applicable law. If taxes are required to be withheld on any amount to be paid by Microsoft to Limelight, Microsoft shall deduct them from the amount owed and pay them to the appropriate taxing authority. At Limelight’s written request and expense, Microsoft shall use reasonable efforts to assist Limelight in obtaining tax certificates or other documentation evidencing such payment, but the responsibility for documentation remains with Limelight. This section shall govern the treatment of all taxes arising in connection with this Agreement notwithstanding any other section of this Agreement.

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17. TERM OF AGREEMENT; DEFAULT.

     (a) Duration. Subject to Section 17(b)-(c) hereof, the period of time during which this Agreement shall be in effect (the “Term”) commences on the Effective Date and shall continue for a period of [*] thereafter. This Agreement shall be renewable by mutual agreement of Microsoft and Limelight.

     (b) Termination for Cause. Either Party may terminate this Agreement if:

     1. the other Party breaches any material term or condition of this Agreement and fails to cure such breach within [*] after receipt of written notice of the same;

     2. the other Party becomes the subject of a voluntary petition in bankruptcy or any voluntary proceeding relating to insolvency, receivership, liquidation, or composition for the benefit of creditors, if such petition or proceeding is not dismissed within [*] of filing; or

     3. the other Party becomes the subject of an involuntary petition in bankruptcy or any involuntary proceeding relating to insolvency, receivership, liquidation, or composition for the benefit of creditors, if such petition or proceeding is not dismissed within [*] of filing.

     (c) Microsoft Termination. Microsoft may terminate this Agreement:

     1. If there is a [*] involving a [*], or Limelight [*] relating to the subject matter of this Agreement to a [*], provided that Microsoft gives Limelight notice of such termination within [*] after Limelight gives Microsoft written notice of such [*]. In the event that there is a [*] involving a [*], or Limelight [*] relating to the subject matter of this Agreement to a [*] and Microsoft does not elect to terminate this Agreement as permitted by this section, then this Agreement in its entirety shall bind any applicable successor to the same extent as it binds Limelight (including, but not limited to, being subject to Microsoft’s termination right as set forth in this Section 17(c)(1));

     2. If Limelight breaches its obligations under the Microsoft Edge Computing Network Support Services, and (i) fails to cure such breach within [*] after receipt of written notice of the same, or, (ii) if curing such breach cannot be accomplished within [*] after receipt of written notice of the same and Limelight is using reasonable diligence to cure such breach, Limelight fails to cure such breach within the later of (A) the date Limelight fails to use reasonable diligence to cure such breach, or (B) [*] after receipt of written notice of same.

     (d) Effect of Termination and Survival. In the event this Agreement terminates prior to completing the Term, then Limelight and Microsoft ensure that each [*] ECN Node operates independent of all Limelight facilities, except for those dependencies agreed to in writing. Notwithstanding termination of this Agreement, Microsoft shall pay to Limelight all Services Fees earned prior to termination that are not Disputed Amounts and subject to offset as set forth in this Agreement, and each Party shall return any Confidential Information or property of the other Party within [*] from the date of such termination. In addition, Limelight shall return all data derived from Services performed under this Agreement to Microsoft within

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[*] from the date of such termination. Sections 1, 3 (provided Microsoft has submitted a Limelight Software Acceptance and paid the Limelight Software Fee), 4 (a), 5 (solely with respect to Fees accruing as of the date of termination or expiration), 9, 10, 11, 12, 13, 14, 15 (for [*]), 16, 17, 18 (for [*]), 19, 20, and 21 will survive any termination or expiration of this Agreement. Section 7 shall survive expiration of this Agreement but not termination of this Agreement. For purposes of clarity, the survival of all other agreements between Limelight and Microsoft shall be in accordance with the respective terms of those agreements, including but not limited to, the Limelight Content Delivery Service Agreement and any co-location agreements formed using the Form Co-Location Agreement.

     (e) Transition of Services. Upon the expiration or termination of this Agreement and for up to six (6) months following the effective date of such expiration or termination (the “Transition Period”), Limelight will provide to Microsoft assistance as reasonably requested by Microsoft to facilitate the orderly transfer of the Services to a third party which will provide services similar to those Services provided by Limelight hereunder. During the Transition Period Limelight will be compensated based on mutually agreeable rates for these transition services not to exceed the pricing described in this Agreement for comparable services or, if the transition services are not comparable to services described in this Agreement, as mutually agreed by the Parties.

18. RECORDS AND AUDIT. During the term of this Agreement and for [*] thereafter, Limelight agrees to keep all usual and proper records and books of account and all usual and proper entries relating to its costs and expenses, and the quality and performance reports in providing the Services and meeting its other obligations under this Agreement. Also, during the above referenced period, Microsoft shall have the right to cause an audit and/or inspection to be made of the applicable Limelight records and facilities in order to verify statements issued by Limelight (and Subcontractor, if applicable) related to compliance with the terms of this Agreement. Any such audit shall be conducted by Microsoft corporate internal audit or a certified public accountant selected by Microsoft. Except as specified herein, Microsoft shall be responsible for all costs and attorney fees related to such audits. Limelight agrees to provide Microsoft’s designated audit or inspection team access to the relevant Limelight records and facilities. If an audit reveals that Limelight has misstated any amounts or reports by five percent (5%) or more for any audited period of time, Limelight agrees, in addition to re-computing and making appropriate adjustments to Microsoft, to pay Microsoft all reasonable costs and expenses incurred by Microsoft in conducting such audit, including, but not limited to, any amounts paid to any auditor or attorney.

19. MICROSOFT TRADEMARKS. Limelight shall not use the Microsoft name or other Microsoft trademarks in any manner, except as expressly permitted under this Agreement.

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20. NOTICES. All notices, authorizations, and requests in connection with this Agreement shall be deemed given: (i) on the day they are deposited in the U.S. mails, postage prepaid, certified or registered, return receipt requested; (ii) on the day they are sent by air express courier, charges prepaid; or (iii) on the day of transmittal if sent by facsimile; and addressed as follows:

To Limelight:          Attention:          Fax:	Limelight Networks, Inc. 2220 W. 14th Street Tempe, AZ 85281 Michael Gordon, Chief Strategy Officer (602) 850-5264
Copy to:          Attention:          Fax:	Limelight Networks, Inc. 2220 W. 14th Street Tempe, AZ 85281 General Counsel (602) 850-5001
To Microsoft:          Attention:          Fax:	Microsoft Corporation One Microsoft Way Redmond, WA 98052-6399 Vice President, Global Foundation Services (425) 936-7329
Copy to:          Attention:          Fax:	Microsoft Corporation One Microsoft Way Redmond, WA 98052-6399 Deputy General Counsel, Legal & Corporate Affairs, Platforms and Services Division (425) 706-7329

Either Party may change the above information by giving written notice to the other Party pursuant to this section.

21. OTHER PROVISIONS.

     (a) RELATIONSHIP OF PARTIES. LIMELIGHT AND MICROSOFT ARE INDEPENDENT CONTRACTORS AND THIS AGREEMENT WILL NOT ESTABLISH ANY RELATIONSHIP OF PARTNERSHIP, JOINT VENTURE, EMPLOYMENT, FRANCHISE OR AGENCY BETWEEN LIMELIGHT AND MICROSOFT. NEITHER LIMELIGHT NOR MICROSOFT WILL HAVE THE POWER TO BIND THE OTHER OR INCUR OBLIGATIONS ON THE OTHER’S BEHALF WITHOUT THE OTHER’S PRIOR WRITTEN CONSENT.

     (b) Governing Law. This Agreement shall be construed and controlled by the laws of the State of Washington, and the Parties consent to exclusive jurisdiction and venue in the

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federal courts sitting in the Western District of Washington, unless no federal subject matter jurisdiction exists, in which case the Parties consent to exclusive jurisdiction and venue in the State courts of King County, Washington. The Parties waive all defenses of lack of personal jurisdiction and forum non-conveniens. Process may be served on either Party in the manner authorized by applicable law or court rule.

     (c) Severability; Waiver. If any provision of this Agreement is held by a tribunal of competent jurisdiction to be contrary to the law, then the remaining provisions of this Agreement will remain in full force and effect, except that if such court finds any of the provisions of Sections 3, 4, 11, or of the NDA, to be unenforceable, either Party may elect to terminate the Agreement. The waiver of any breach or default of this Agreement will not constitute a waiver of any subsequent breach or default, and will not act to amend or negate the rights of the waiving Party.

     (d) Assignment. Upon the written notice to Limelight, Microsoft may assign this Agreement in whole to any wholly owned subsidiary or an affiliate in which it holds at least fifty percent (50%) ownership interest, or as part of a corporate reorganization, consolidation, merger, or sale of substantially all of its assets. Microsoft may not otherwise assign its rights or delegate its duties under this Agreement either in whole or in part without the prior written consent of Limelight, and any attempted assignment or delegation without such consent will be void. Except to a successor in interest to substantially all of Limelight’s assets (and subject to Section 7 and Section 17(c)(1)), Limelight shall not sell, assign, transfer, pledge or encumber any of its rights or delegate any of its duties or obligations under this Agreement (by actual assignment or by operation of law, including without limitation through a merger, acquisition, consolidation, exchange of shares, or sale or other disposition of assets, including disposition on dissolution), without the prior written consent of Microsoft. This Agreement will bind and inure to the benefit of each Party’s permitted successors and permitted assigns.

     (f) Precedence. To the extent that any provision contained in any exhibit is inconsistent or conflicts with this Agreement (exclusive of the exhibit), the provisions of this Agreement (exclusive of the exhibit) shall control over the exhibit. To the extent that any provision contained in the Limelight Content Delivery Service Agreement is inconsistent or conflicts with this Agreement, the provisions of this Agreement shall control over the Limelight Content Delivery Service Agreement.

     (g) Amendment. This Agreement may be amended only in a written agreement signed by all Parties, except that Microsoft reserves the right to unilaterally modify the MVG as it deems necessary from time to time and Limelight agrees to comply with all such modifications.

     (h) No Solicitation. From and after execution of this Agreement through the end of the Term, neither Limelight or persons within the Global Foundation Services group of Microsoft will solicit the employees of the other without the consent of the other, except for any persons hired by Limelight related to a [*] ECN Node, and except persons hired as the result of indirect solicitations (e.g., general newspaper advertisements, employment agency referrals and internet postings).

     (i) Press Releases/Publicity. Except as permitted under the Limelight Content Delivery Service Agreement, Limelight shall not issue press releases or publicity in any form

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that relates to this Agreement and Limelight shall not use the name “Microsoft” or “Microsoft Corporation” or any Microsoft trademarks. The foregoing notwithstanding, Microsoft consents to permit Limelight to issue the press release set forth in Exhibit G.

     (j) Entire Agreement. The Limelight Content Delivery Service Agreement and the NDA each exists as a separate agreement between the Parties and except for the Limelight Content Delivery Service Agreement and the NDA, this Agreement contains the entire agreement between the Parties with respect to the subject matter hereof and, supersedes all oral understandings, representations, prior discussions and preliminary agreements. Any representations, warranties, promise or conditions not expressly contained in this Agreement shall not be binding upon the Parties. This Agreement may be executed electronically and in two or more counterparts, each of which will be deemed an original, but all of which together shall constitute one and the same instrument. Once signed by both Parties, any reproduction of this Agreement made by reliable means (e.g., photocopy, facsimile) is considered an original.

[Remainder of Page Intentionally Left Blank]

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EX-31.01

EXHIBIT 31.01

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Jeffrey W. Lunsford, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Limelight Networks, Inc. (the “Registrant”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.	The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

(a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(c)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: November 14, 2007	By:	/s/ Jeffrey W. Lunsford
		Jeffrey W. Lunsford
		President, Chief Executive Officer and Chairman
		(Principal Executive Officer)

EX-31.02

EXHIBIT 31.02

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Matthew Hale, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Limelight Networks, Inc. (the “Registrant”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.	The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

(a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(c)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: November 14, 2007	By:	/s/ Matthew Hale
		Matthew Hale
		Chief Financial Officer
		(Principal Financial Officer)

EX-32.01

EXHIBIT 32.01

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
Pursuant to
18 U.S.C. Section 1350,
As Adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

     I, Jeffrey W. Lunsford, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the quarterly report of Limelight Networks, Inc. on Form 10-Q for the quarterly period ended September 30, 2007, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such quarterly report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Limelight Networks, Inc.

Date: November 14, 2007	By:	/s/ Jeffrey W. Lunsford
		Jeffrey W. Lunsford
		President, Chief Executive Officer and Chairman
		(Principal Executive Officer)

A signed original of this written statement required by Section 906 has been provided to Limelight Networks, Inc. and will be retained by, Limelight Networks Inc. and furnished to the Securities and Exchange Commission or its staff upon request. This certification “accompanies” the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

EX-32.02

EXHIBIT 32.02

CERTIFICATION OF CHIEF FINANCIAL OFFICER
Pursuant to
18 U.S.C. Section 1350,
As Adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

     I, Matthew Hale, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the quarterly report of Limelight Networks, Inc. on Form 10-Q for the quarterly period ended September 30, 2007, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such quarterly report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Limelight Networks, Inc.

Date: November 14, 2007	By:	/s/ Matthew Hale
		Matthew Hale
		Chief Financial Officer
		(Principal Financial Officer)

A signed original of this written statement required by Section 906 has been provided to Limelight Networks, Inc. and will be retained by, Limelight Networks Inc. and furnished to the Securities and Exchange Commission or its staff upon request. This certification “accompanies” the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.